Preparing for Tough Combat

New competition and security risks pose challenges for banks. But Executive Summit attendees learned how to fight these battles.

Bankers have their work cut out for them in terms of their ability to respond to changing customer expectations, emerging markets and new technology-enabled competitors, TowerGroup's Jim Eckenrode told attendees at last month's Bank Systems & Technology Executive Summit.

Instead of relying on traditional customers, who are "higher cost, ... spoiled and demanding" and require "tailored delivery channels," Eckenrode argued, banks should seek "opportunities for new markets that will provide growth."

Identifying these new customers and understanding what and how to market to them will take a new kind of insight, and Wachovia is one institution that has made a significant investment in the tools that will enable this. "We're focusing time and resources to be a leader in innovation," Steve Clement, the bank's SVP and director, information technology strategic initiatives office, told participants at the Summit, which took place at the Royal Palms Resort in Phoenix. The goal, he added, is to give Wachovia an edge in understanding "what will be the next big thing in the banking industry."

Much of Wachovia's effort has focused on "customer-insight-focused innovation," said Dan Thorpe, SVP and group leader, statistics and modeling. "Customer insight starts with how you classify customers." Today, Thorpe continued, "The holy grail is household value, lifetime value. [But] it's hard -- management needs to be committed" to the concept.

Mergers and acquisitions also continue to be a key growth strategy for banks, according to Sateesh Prabakaran, managing director/chief architect at Bank of New York Mellon, who gave a progress report on the recently merged institution's integration activities. "In this merger, technology is part of the business dialogue, shaping the business going forward," he said.

Increasingly, security is both a hurdle and an aid to growth, Summit speakers noted. Mark LaPenta, CTO/COO of MetLife Bank, a direct bank that focuses on lead generation and wealth transfer through agent distribution, summed it up by noting, "[Security] is a business opportunity, not an expense."

A highlight of this year's Executive Summit was the Awards Dinner and Ceremony recognizing BS&T's 2007 Most Innovative CIOs in Banking. The honorees were Joseph McCartin, National City Corp.; Brenda Rideout, ING DIRECT; Wayne Mekjian, Wells Fargo; James Phillips, Arizona Federal Credit Union (AZFCU); Scott Flemming, Wachovia; and Michael Lindsey, BancorpSouth.

Sponsors of this year's Executive Summit were Adobe Systems, CGI, Exstream Software, Harland Financial Solutions, Metavante, RSA, SAS, StreamServe Inc. and Versabanq Innovations Inc.

Bank Systems & Technology's 2008 Executive Summit will take place Oct. 19-22, 2008, at the Royal Palms Resort and Spa in Phoenix. Program and registration information will be available online at www.banktech.com/summit2008

Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio