The inaugural “Model Bank” report from Celent, a Boston-based financial research and consulting firm, recognises 18 bank technology initiatives as “Model Bank Components.”
Key findings of the report include:
Banks will increasingly build SOA-based middle layers to reduce application redundancy, assure data integrity, facilitate data sharing, and lower overall maintenance costs. SOA will become the method for Tier 1 and Tier 2 banks to incrementally modernise core systems. Few banks of this size, and among larger banks, even fewer-are willing to do a rip and replace. The name of the game will be owning the middle tier of technology.
A growing number of banks are undertaking the first steps of core renewal, which is simply service-enabling the core in order to reduce the cost of maintaining front end applications that need to access information in the back end systems. Celent anticipates a rise in the launch of new types of products that combine features of loans and deposit products or loans and securities to be launched.
Banks are paying increased attention to providing a slew of payment types and options. The ideal state of payment processing is an integrated payment gateway supported by a smart decisioning engine. The most successful recipe for an effective payments operation includes a payment strategy that considers all of the financial institution’s payment types, channels, markets and geographies served, and customer types.
During 2007 banks continued their quest to further improve automation in all lines of loan origination and loan processing. Banks are linking their loan origination systems to document management solutions and core banking applications to offer a more complete and integrated offering to borrowers looking for quick and responsive decisioning and loan processing. This improved responsiveness leads to improved client relations.
Banks now have access to an unprecedented amount of data about their customers. As products begin to cross lines of business, bankers need to understand the dynamics of the entire set of relationships and market accordingly. As distribution channels multiply and increasingly become self-service, banks are challenged to optimize customer experience across channels.
Financial institutions are embracing enhanced self-service and full service customer service options including online training, self-service tools, knowledge bases, chat, and email/telephone support. Banks should be taking a multichannel approach to their service and support initiatives. It is essential for the customer to receive a consistent level of support regardless of the channel they use for communication.
IT security represents a fundamental pillar in today’s banking environment-banks are expected to manage risk and protect both internal and external environments from potential breaches and harm. Bank security teams must be proactive in their approach to monitoring attacks. While being reactive is certainly necessary and may foil an attack, the constant evolution of attackers and their methods needs to be closely monitored. Protection against constantly evolving forms of bank robbery and account fraud are a must.