Tag Archives: banking

Tech-Geek

If you are going to be a SaaS provider expect zero tolerance of downtime

Looking back on the past few months it’s become incredibly apparent how mission critical the Internet and websites have become. Looking at this article on All Things D (WSJ)
If you are going to offer SaaS it means >99.95% uptime or you are going to lose customers. And there is no patience now. Especially if you are a core provider. It’s as much of an infrastructure as the mainframes of old.

Years ago we all relied in data processing core providers like Unisys IBM and NCR. They are still out these and probably laughing at us upstarts like Amazon and Intuit Financial Services. My company Intuit provides outsourced digital banking for well over a thousand financial institutions. Back in the day people expected slow and steady innovation or they went “in-house” to make it happen often to the awful reality that it was only worse that way. IBM is actually becoming a huge player in this space leveraging what it knew then with a huge service operation. The fact is we have to be perfect now and offer the innovation but absolutely excellent!

When we go down its not us that suffers but the bank you use to do financial transactions. In this article they talk about services like Netflix and how end users miss it. Gone are the days of end user tolerance. They expect it to be there, available and fast. And it’s not just in a web browser it’s Apps on phones, tablets, embedded payment systems and many other backbone services.

Amazon has some of the most powerful server technology available and still they struggle. They strive or uptime but much has to do with the software running on it. As a former Amazon architect now working for us said – the software has to be able to accommodate for hardware failures to automatically switch and sync and adjust on the fly. It’s not always the case in SaaS since they think of you as a black box. We are fighting to make it work in our own data center. And we are in a huge transition to amazing new technology. But the bank’s end users don’t know that or care- to them when online banking is down its a huge failure expecting perfection.

Gone are the days of adjust on the fly, tolerant end users and only understanding savvy people surfing these sites. Will they be tolerant though of slower innovation? It’s the new chasm. No they won’t and so the small guy will have to continue to rely on the Amazon and SalesForce and Intuit’s of the business world.

Tech-Geek

Banks branches going the way of checks – shift to Electronic banking

Digital banking, mobile banking, online banking – call it what you will but the shift is finally happening. Banks are investing less in traditional infrastructure and more in the virtual bank

A Forbes Article quote:
Over the last year BofA has shut down 163 branches across the country. That’s the greatest number of closings for any U.S. bank. It’s opened just six in the same period for a net of 157 branches closed, according to data from SNL Financial.” In fact they are cutting an additional 16,000 people as part of this operational efficiency.

The fact is if it is going to exist at all branch banking will continue to change. Intuit engagement studies show that Americans walk into branches at most 2 times a month if at all yet use mobile and online as much as 30 times a month. I spend a lot of time with bankers and credit union execs who all know in their heart this is coming but still struggle to shift their investment patterns. Even in technology investment they still find it uncomfortable that they spend more on Internet banking than core processing when most of what core processing does today just isn’t that big a deal. Check volumes turned the corner over ten years ago and have been decreasing ever since. Why invest in proof of deposit, item processing or big iron to simply do accounting – that should all be in the cloud, payment networks or mobile transactions.

So think about it – shouldn’t the branch really be a place with “genius” bars – the platform bankers with investment and lending advice at most but tellers – really? Do you really need big iron counting checks and processing deposits? Help customers along to digital banking.

Tech-Geek Technology

The Core Processing vs Internet Banking Spend Question in #banking #onlinebanking #intuit

Over coffee this morning I was reading about all of challenges we are having in the economy, job growth and the engine that drives it: all selling things. I work at Intuit, and we sell Online Banking services to Banks and Credit Unions. One of the biggest challenges we face in our business, online banking, is the relative spend on our services to “core processing.” This usually refers to the traditional data processing vendors like Fiserv, FIS, Jack Henry, etc. These vendors come from the original core businesses of accounting for our money. They are usually the biggest spend at a financial institution next to personnel (and all the power they hold securing our moeny) and perhaps the physical infrastructure – branches and buildings (that house the safe, the records, the money).
So why so much on these systems – well these were really important huge pieces of hardware from the original big technology companies like Diebold, IBM, NCR, Unisys, etc. They provided the safe, the buildings, the mainframe with core data processing that was often so expensive it was time shared with other FI’s in an outsourced manner. It handled the most important functions efficiently and often still does. When we were kids, we brought our passbook into the same branch every time we made a deposit. We cashed our checks there and in fact many of our checks made it to the same place after floating through the system. These core processors eventually automated much of this and linked it all with advanced networks that allowed for branch networking so that we could walk into any branch and conduct our business with the person behind the counter knowing who and what we were. These tellers and platform salespeople relied on these systems and it led to even more automation – around their functions.
All this was so monolithic, even when separate systems cropped up for automating teller, ATM, call center, check processing, and other important tasks; they still were often tightly integrated with the core data processing vendors. Then came the internet. As we all know – this changed everything. Distributed technology linked by advanced virtual private networks created a balance of power if you will, companies could distributed processing away from monolithic mainframes, they could make choices on what vendors made the best products for the task and the core data processing vendors lost power. So they took their capital and started to acquire.
All along Internet banking chugged along, growing slowly and adding functionality as the technology progressed. But we in online banking didn’t yet have the public’s trust and we didn’t always have access to data, we focused on the former and improved the end user experience and partnered to get access to the data. Online banking vendors began integrating more and more functions into one place all in service to making the end user – the consumer’s life easier. Processing power shifted to the cloud and connectivity lead by industry giants like Cisco facilitated more and more capabilities into these systems until they began to automate the one thing decades of core processing could never do, the teller functions. We then began to take on more of the core processing, handling payments and financial analysis. Automating the functions that a teller or customer service representative could never do on the fly and pretty much all that they did do traditionally.
So that leads to the original topic of my morning coffee consideration: Spend. We are now becoming one of the most expensive items for any bank to consider when creating budgets and considering operational efficiency. While I don’t like eliminating jobs – let’s face it – the automation of America in service to a better way of life and more personal wealth has been about doing just that. These people will shift to other positions of service and in fact many work for us. But the consumer today would prefer to do just what you are doing – get their information from the internet, from their computer, phone, tablet, and eventually – any device that is connected to the cloud, the network. If we are effectively eliminating two of the most expensive functions that banks traditionally spend our money on – the bricks and mortar infrastructure and the teller/customer support line – why wouldn’t our systems cost the most to operate. Imagine – we are duplicating a person, we are that magic robot we all see in science fiction. We are the building that holds the safe that holds your money in a secure and controlled environment. And with the connectivity that manages the flow of this data, these functions, all in the cloud – we are the most important investment a bank can make today.

Tech-Geek

#AFP2011 – I have no direct insight after all. Some news on #cashmanagement #onlinebanking

I did technically go to AFP this year but didn’t attend sessions. Instead I got a little exhibit hall time and connected with customers and associates.

I will say that it was well attended and the crowd was interactive. As far as cash management banking software vendors. The verdict is still out on what will happen with FundTech and BankServ combination. And the ACI – S1 combination will be tumultuous – especially for the folks at S1. Fiserv continues to invest in Corillian commercial services but they aren’t all there, the Fiserv Ecorp Product survives and BankLink chugs on. But no breakthrough there. FIS same old ADP Brokat mash up.

We have our BFS, the iteration of Magnet that is in its third gen with still superior functionality but still not part of our unified platform. Look for that in 2013, with cross platform small business solutions in 2012. We did have strong interest in our new Business Mobile Banking and the market segmentation that allows for packages and unique user experiences for small business has helped our banks gain fee income and retain customers. We will leverage the Intuit small business franchise heavily in 2012 – that will be market changing.

Tech-Geek

#Intuit Financial Services will be at #AFP2011 with #digital #banking – sold to and provided by #banks and #credit_unions

Intuit’s online business banking and small business solutions, Business Banking and Business Financial Solutions (BFS), had great interest at the client conference and we continue to explore new avenues for our financial institution client’s business customers. From integration of new payment methods and merchant services like mobile payments to enhanced reporting tools within the administrative platform. We will be showcasing these solutions at the annual AFP Conference in Boston, MA this week.  I’ll be at our booth #2804 where we will be showcasing:

  • Business Mobile Banking – Empower your business customers to execute critical cash management tasks on the go.
  • Business Financial Solutions – Serve simple to sophisticated businesses on a single platform with financial tools that evolve as a business grows.
  • Online Payroll – Deliver the online payroll solution preferred by more than 1 million businesses within your branded Business Banking site.