In the past, the relationship between technology firms and banks was strictly based on traditional business models.
How times have changed.
Today, tech providers talk about becoming a bank's "preferred" or "trusted" partner. Instead of informing banks what technology could do for them, we have crossed the line and can now advise financial institutions on decisions they should make when it comes to new systems and devices. It is a powerful transformation.
This new relationship paradigm is all well and good as far as it goes, but let's not put this noble sounding spin on what is otherwise pure capitalism at work. We need to sell stuff to the bankers if our firms are to survive and prosper. How do we do that? By ingratiating ourselves to the buyers at the financial firms we choose to call upon or to those terribly insightful bankers who choose to call us first.
And this relationship is still far from perfect for both parties. For example, technology firms still have to go through requests for proposal and tender offers. Don't get me wrong, these procedures still have a place-but it's somewhere back in the legacy infrastructures of the 1990s. Speed to market is the watchword today.
For this reason, we still view bankers as being in the driver's seat in our evolving business relationship. After all, while we have the products and services, they actually have the money. For us, the game remains to somehow exchange their money for our products.
Lately, however, I get the feeling that bankers now believe we have the power in the relationship. They now see us as having the chips and MIPS, the gigabytes and terabytes of storage, the techno-geek all-knowing consultants, and the ultimate wisdom of knowing what the competing bankers are doing because we sold stuff to them already.
In addition, I imagine the bankers are concerned about making the wrong bet when it comes to technologies such as the Internet. Should they dot.com or not.com? If they choose wrong, they worry about job security. Even if they choose right, they wonder if they paid too much.
Unfortunately for bankers, we don't always know the right answer. And how about this flash: we don't always have the best product to solve their problem. Our competitors' products could be a much better value than ours-why else would their stock price be so high?
So how can this relationship be improved? How about if bankers and tech firms take yet another step forward and actually try to become friends and work together? Let's declare the parochial nature of our own respective agendas to be just that. The tech firms need to sell you something. If it means becoming a trusted advisor to do so, then so be it. The bankers make up preferred vendor lists in order to uncomplicate their lives by having fewer installed vendors to deal with. Each motive is inherently selfish and that is as it should be. Call me a Republican if you will, but just make sure you call me.
There are already movements taking place to promote closer working relationships between vendors and bankers. The Bankers Association for Finance and Trade (BAFT) is taking a major bold step in this direction. The group has recently launched an important worldwide Technology and E-Commerce (TEC) Committee. This band of wholesale bankers, technology firms and service providers is off to a quick start, as evidenced by the standing room only crowd at its very first meeting held at the September SIBOS Conference in San Francisco. Its mission is to help craft a worldwide view of e-commerce relative to wholesale trading.
Another example of evolving industry cooperation is taking place at BITS (the technology arm of the Financial Services Roundtable). Last year, the group launched a security lab; its purpose is to test and qualify the security issues and products that can best serve the needs of bankers.
As suppliers, we should continue to show banks what is possible with new applied technology. In turn, the banks can supply us with the grounding we so desperately need. After all, just because something can be done does not mean it should be done.
Dennis Roman is director, worldwide banking and financial markets for Cupertino, Calif.-based Hewlett-Packard. He can be reached at [email protected] hp.com.
This guest column, a regular feature in Bank Systems+Technology, allows industry executives and experts to discuss a key bank technology topic. If you would like to contribute, please send requests by e-mail to Steven Marlin, BS+T executive editor, at [email protected]