No More Missing Laptops, Consortium Vows

IT managers will be able to better track their equipment while other executives can monitor the flow of key documents and cash, when everything from laptops to bits of paper have radio tags attached.

The Financial Services Technology Consortium (FSTC, New York) hopes to have laid the groundwork for that futuristic scenario by year end. FSTC begins work this month to create standards around how banks will tag items and have them communicate back to base using radio signals.

Much as individuals now may embed a microchip in their pets to readily locate them should they get lost, the Radio Frequency Identification (RFID) project will allow banks to hold onto what matters and to track the time spent on business processes.

For instance, banks regularly transfer bags of cash or documents to their branches or other banks, notes John Fricke, FSTC chief of staff. "With bag tracking you know where they're at, the amount of time bags are left sitting around in a van," he says.

The other big application will be tracking of IT assets, he says. "Today, it takes several people several months to do. Doing it with RFID it will take less than a day and, obviously, reduce expense.

"One institution [that Fricke wasn't at liberty to name] has already put tracking devices on all their laptops," he says, adding that there are probably close to 10,000 laptops. Whenever anybody walks out the door with a laptop, the security guard is alerted. They're given a photo of the individual that should have that laptop so if someone else is carrying it they can stop them."

It's when it comes to items moving between banks, however, that shared technical standards matter. FSTC aims to ensure that Bank B's system can read the tags on a mail bag sent by Bank A or on any of the documents within the bag that warrant being individually tracked, such as loan origination agreements. In other legally contractual situations, such as, for example, the sale of loans into the secondary market, one might want to tag the sale documents.

Radio tags are tiny enough, Fricke notes, that "you can place a tag on a piece of paper."

Banks have a checkered history of competing pan-industry standards. One example that comes to mind is Integrion, the coalition established in 1996 that was to have been the online banking forum for the industry's then roughly 10,000, now 8,500 banks.

Asked why then he is confident this venture will succeed Fricke says banks themselves sought and value radio tagging. Nine major banks, almost equally from within and without FSTC, asked the consortium to work on radio tagging. Fricke also pointed to successful FSTC standard-setting, such as for check imaging: "Over 75 percent of the checks in this country now use the standard we put together.

"Four of the top five banks in the U.S. asked for our help in establishing this, [RFID]" Fricke continues. "They see the difficulty of getting it up and running but also the value. If each did it independently, it's not going to be nearly of the same value. We're reaching out to the industry and asking them to help. No matter if you're a small community bank or a Citi, we want everyone to participate."