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News & Commentary

12:28 PM
Art Gillis
Art Gillis

Technology in Banking Wins Big for Doing Nothing Wrong

Many doomsday scenarios have never happened, thanks to stable technology.

After three years of a wide range of banking defaults, and still counting, it seems only fair to look for any form of bright spots in the industry. I'm looking at the tech turf because that's all I know about banking. Bank IT is almost like a Seinfeld Show episode. On a relative basis, bank technology has been a super success in recent years by being about nothing, nothing wrong that is. In my opinion, bank tech organizations, both internal and from the vendor community, delivered their routine excellence as well as new product capabilities, compliance support, added security, expanded business intelligence, on-time responsiveness, and stability.

Here are some of the headlines conjured up by my current events-influenced imagination that could have competed with the size of the mishaps experienced in the reality show of banking.

1. Too big to fail has also infected the IT capacities of the top four banks when daily processing jammed the posting of billions of transactions to 236 million customer accounts for several days. Like Y2K, no one anticipated "too big to process" until it became a reality.

2. While bank customer accounts were safeguarded with dual password authentication, firewalls, DOB checks, spam filters, phish detectors, mother's maiden name checks, amount of last deposit, last four of SSN, and last four of credit card numbers, a low-tech 18-wheeler belonging to a courier, and loaded with disks from a major bank processing center, on its way to an unnamed backup facility, was hijacked and loaded onto a C-17 Globemaster III at Newark Airport commanded by a uniquely dressed colonel heading for Libya. "I trade you no identity theft for billions of U.S. citizens, you abandon threats of a no-fly zone over my land - zenga zenga."

3. Three of the top four bank CIOs have been fired for fraud, conspiracy, personal gain, incompetence, absent oversight, dereliction of duty, and mismanagement. Fortunately, their unplanned three year CIO term was up anyway and successors stepped right in to fill the void.

4. The Department of Defense, FBI and CIA have been added to the list of bank regulatory agencies to monitor IT processors and bank IT departments for potential money laundering activities related to terror threats.

5. Foreclosure processing has been outsourced to major BPO centers in Bangalore, Dublin, Shanghai and Manila, however, overnight turnaround of cleaned-up cases has become a major bargaining chip as newly organized labor unions seek a higher $5.50 per hour wage rate for their members who have been glued to their TVs watching a new reality show called "Keeping Up with the Americans."

6. Unable to negotiate more than a $17 million bonus, the last man standing started a de novo of his own, and after enjoying the role of back-stage CIO when he was at B1, he resumed his love of IT and acquired the #1 IT company on Fintech 100. Uncertain as to which company was #1, he did what was generally accepted banking practice at the time and acquired #1 and #2. Overnight, 57% of the U.S. FI population lost their power to negotiate price cuts from their primary core vendors. Now that's a banker that even Bill Gates can't call a dinosaur.

7. With the widespread use of mobile banking and the added threat of breaches in the use of online banking, in a most unusual display of prevention rather than recovery, the regulatory agencies stepped in with new emergency laws: a) All banks would restrict their online access hours to the past-and-safe offline banking hours of 9-3, M-F. b) Mobile devices would be registered, controlled and issued only by a new consumer protective agency that outsourced the entire security operation to Starbucks. Anticipating an onslaught of branch activity, the regulators recruited the Charlie Meen Institute of Teller Training to provide sensitivity training in the handling of a new consumer rage. Apple was recruited to provide cots and unsold original iPhones (vintage 2007) with recorded messages from Dr. Phil for the lined-up bank customers at branches.

This ridiculous scenario is what might have happened if the technology business acted anything like the banking business. Be good to your tech people. They've done a lot of good and nothing bad.

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