You can bank on it

Casting an eye over the scale of progress in electronic banking over the past 20 years, it would be tempting to assume that the relentless march of technology might now pause for breath. If anything, the pace of change is increasing, putting more pressure on banks to seek competitive advantage from technological innovation.

Of course, this period of change has also brought new challenges, none more acute than the inability of wheezing legacy systems to be able to cope with new technologies that enable data to be accessed, processed and updated in real-time.

At the same time, the very strengths of modern electronic banking in terms of speed, accessibility and usability have also been an Achilles heel, with fraud and data integrity breaches reaching new levels.
The financial services arm of BT Global Services recently completed a white paper entitled "Innovation of Retail Banking". The paper argues that the changing behaviour of customers increasingly influenced by the presence of broadband and the home computer is a critical consideration for the financial services sector.

It says: "Banks that fail to innovate and compete effectively across all channels may risk losing market share to a new generation of tech-savvy competitors. In this environment, technological innovation is recognised as a key differentiator among banks today."

In the paper, BT highlights four of the likely technological innovations in financial services. Firstly, e-money will finally join the mainstream as digital wallets become commonplace and mass market devices, such as mobile phones, offer alternative payment systems that become de facto e-money. This will require infrastructure investments in trading platforms that support these multiple currencies and payment methods.

The second probable innovation is the development of portable devices that can translate languages in near real time, giving customer service agents the capability to support users in additional markets, and in turn driving further centralisation of support centres.

Third is the advent of biometric scanning, another technology long discussed but finally ready to go mass market and help banks combat fraud and reduce administration overheads. Again, advanced global networks and centralised data processing services will be critical to effective implementation of this technology.

Finally, new software applications running across consolidated infrastructures will enable banks to monitor transactions globally and in real time, enabling them to meet the needs of regulators for operational transparency and protection of personal data, while cutting the costs of compliance audit processes.

Innovation drives business growth but it also demands resource and skills. As infrastructure demands become global, real time and multi channel, organisations will have to depend on trusted partners with relevant experience of the latest technology to deliver the requisite platforms.

The white paper notes: "BT's experience in this sector, in part through its dedicated financial services network, the Radianz Shared Market Infrastructure that provides high performance security and availability for financial services applications, has given it a strong understanding of the technology needs of banks over the next 20 years. This knowledge has also influenced the development of the 21st Century Network."

For consumers, the future of banking is rich in new applications, increased convenience, advanced security features, one stop shop services and multi-channel support and access. While banks will be keen to benefit from the appeal of new technology, those that fail to adequately provide the infrastructure for this evolution are as likely to fall prey to more nimble competitors as they are to benefit from the wealth of new opportunities.

A PDF of the "Innovation of Retail Banking" white paper can be accessed here