The death of bank products has been greatly under-exaggerated

Source: Moven

Since 2005 I’ve been predicting the decline of branch banking. For almost ten years I fought bankers who decried my assessment that branches would cease to be the most important channel in banking, to be replaced by far more efficient mechanisms for revenue generation and relationship. Today the discussion is increasingly resorting to a sort of desperate plea — 'but branches aren't going to die completely, are they?' No one is saying branches will grow.

The UK, the US, Spain, and a host of other countries are seeing the lowest number of bank branches in decades. For the UK you’d have to go back 60 years to find lower numbers of bank branches than we have today, and 2014 saw the use of bank branches fall 6% in a single year — the biggest reduction ever. 

2015: The year fintech really took off

I have been tremendously excited to see how the FinTech sector as a whole has moved up to a whole new level this year. And what particularly excites me is the way two particular groups have seemed to really recognise the role of fintechs in underpinning economic growth.

By Anders La Cour, CEO of Saxo Payments

Untangling the blockchain: A real game changer

The hype around blockchain is growing rapidly. The question is whether such hype is justified – will blockchain technology revolutionise the financial world?

This question has been on my mind ahead of this week's European Payments Council (EPC) General Assembly Meeting, at which I shall be presenting on the topic.

Hybrid architecture for ATM networks: It’s music to a CIO's ears!

Asked who he listens to, Eric Clapton once replied, 'JJ Cale', and in later years these maestro musicians teamed to transform numerous well-known songs in a way few would have thought possible (check out their medley of 'After Midnight' and 'They Call me the Breeze'). Even now, I can tell it's JJ Cale playing a tune on the radio after just a couple of picks — he was that good.

I wish this were true with ATMs. If every financial transaction had an audio track, I could tell within just a few 'notes' whether it’s routing my personal information via a NonStop system. The folks at HPE tell me that in America the chances of my ATM transaction not passing through at least one NonStop is really slim. But being able to identify the systems involved would satisfy any uneasy feelings I might have about who else might be 'listening in' on my transaction.

Capital markets: Buying habits signal a shift towards the cloud

62% of technology projects in capital markets over the last year have cost less than $500,000, with 45% having a Capex of less than $250,000 according to our latest research.

This came as somewhat of a surprise. 

My conversations with fintech companies serving capital markets have been consistent – times are getting better. Institutions are spending again and, although pressures are there, confidence is returning. Regulatory demands, technical upgrades and changing customer requirements were supposed to be pushing firms to spend. So, in a market widely known for major, wholesale technology change, this level of spend marks a real shift. 

Core banking system mistakes, masterstrokes and predictions

• My previous blog, looking at the evolution of the core banking systems sector over my 20+ years, seemed to be well received and prompted quite a few memories and opinions among my peers. So I decided to do a second ‘Farewell to Cedar/IBS’ piece as I weigh up my next steps in the sector.

These are my ‘Top Five’ mistakes and masterstrokes and ‘Top Ten’ predictions. Let me know if you agree, any other worthy contenders? It would be good to get a debate going!

By Martin Whybrow, founder of IBS Intelligence

The core banking systems market: then and now

• As I prepare to leave IBS, the company I set up 24 years ago, it seems a fitting moment to take stock of how far the core banking systems market has come in that time.

By Martin Whybrow, founder of IBS Intelligence

Agile banking needs a new core

If you had the chance to design a bank from scratch using only one system, what would it look like?

When we started to run our banking services, we had a look at the banking value chain. Banks produce services directly for clients 'at the front'. Less visible and much more important: 'in the back', banks provide complex technical infrastructure for processing, accounting and regulatory tasks. At the front, there’s plenty of new competition. Fintech start-ups usually pick cherries from the front-end banking businesses. But they still rely on crucial processes from the old banking infrastructure.

This article originally appeared on JAXenter.com

To branch or not to branch... is that the right question?

• The quest to justify banking's oldest distribution channel continues despite the wonders of self-service automated kiosks and the growing adoption of mobile banking. 
• 
  
• The arguments for and against branch banking are well publicised these days, and yet we continue to debate the subject year after year.

Video banking: the best of both worlds

OK, so video banking is not the latest trend, and a number of banks around the world have been offering it for some time now (the Polish market has been particularly prolific – think Idea Bank, Alior Bank, ING and Raiffeisen). 

It is a very important channel – as it offers actual human contact in the increasingly faceless mobile banking world and thus shouldn’t be neglected.

It combines the best of both worlds – modern technologies and human interaction.

Dear banks, social media doesn’t have to be scary

Dear Banks,

How's it going? If you're reading this, you must be on social media, or you're at least checking the internet. That's great.

I've been meaning to write this letter for a long time. The first thing you should know is that I think you're really important. Sure, I might like to joke about banker's hours and bailouts, but the truth is, the alchemical process that turns pay cheques into cash has always inspired me. And I'm not alone.

Banking and financial services technology world, unite!

IBS Intelligence has launched a new global platform – IBS Chat – dedicated to increasing conversation and knowledge sharing within the financial services industry as a whole.

IBS Chat aims to bring industry participants together to exchange views and ideas, ask and answer questions on all matters relating to banking and financial services technology.

Sustainability-focused banking: a compelling case?

There is profit and positive impact in sustainability-focused banking and there is proof, states Global Alliance for Banking on Values (GABV) as it publishes a new report based on a decade of data.

‘Why isn’t all banking done this way?’ the organisation now asks the policy makers, regulators and banking institutions worldwide.

Do we need the digital-only bank?

Post-crisis a lot of people don’t trust banks. You can’t really blame them, it’s just the way things are now. That mistrust hasn’t stopped people using their banks, of course – where else would they keep their money? Apart from stuffing it into the mattress there isn’t much choice.

Never fear, those of you clamouring for a different way to do banking (raise your hands – anyone?), as a wave of digital-only banks have arrived to save the day.

From $120m to $20m in less than ten years: how not to do business

Source: getty images

So, as FIS is busy with the takeover of fellow US vendor Sungard, the latter is shedding business that is not likely to be of any use to the new owners. Thus, the core banking software unit – known as Ambit Core Banking – has been sold to rival banking technology provider, Silverlake Axis.

Nothing unusual, one might say, businesses are bought and sold all the time. True, but how many large international fintech firms have managed to lose $100 million of business value in less than ten years?

Banking technology in Asia: the place to be

Everyone who is anyone in the banking software space wants to do business in Asia, and for a good reason: the region is as buoyant as ever.

The established markets are getting even more sophisticated in their technology consumption (if you are in Singapore, why not try out an NFC-enabled wristband to pay for your commute, travel, shopping and eating out?).

(Survey) Blockin' all over the world: Is Blockchain all it's cracked up to be?

Blockchain focused start-ups are springing up like mushrooms after the rain, and the big banks all seem to be investing in this space. But is this just a ‘fashion craze’ (loom bands, anyone?) and the big guys just want to show that they are technologically advanced and forward-looking, whilst the new guys want to cash in quick before the world moves on to the next big thing?

The 'Pay' model is strong but the banks are still in play

The big guns – Apple, Samsung and Google – are dominating the mobile payments news cycle now that their respective ‘Pay’ platforms threaten to disintermediate the world’s banks. 

They won’t have it all their own way, though; banks are responding with their own platforms. But is it too little, too late?

EuroFinance 2015 in Copenhagen: Witness the treasury fitness

Denmark and Copenhagen are two European locations that have polled as the happiest and healthiest in the world. What better place, the organisers of EuroFinance must have thought, to host a conference on ensuring that the treasury industry remains happy, healthy and fit for purpose? Health and exercise parables were abundant in Copenhagen, where delegates were encouraged to give their company strategy a check-up.

Brain drain a pain as Infosys stops hiring SAP executives

With the news of 16 SAP executives moving to Infosys, the issue of sudden staff departures has come under the spotlight. The fear of a brain drain to businesses and even countries is the stuff of nightmares. All that lost talent, investment and time.

Treasury & capital markets: utility in vogue again

Amidst all of the hype and activity around retail-oriented digital banking, it is sometimes easy for industry watchers to ignore the treasury and capital markets (TCM) sector. It can appear that the main focus for innovation is elsewhere. The suppliers seldom change, though they reduce in number through M&A, and many of the business pressures look little different from one year to the next.

FIS purchase of Sungard – is big always beautiful?

FIS has made its biggest acquisition to date, splashing out $9.1 billion on fellow US vendor Sungard. But with both companies already having large, complex structures and numerous product portfolios (due to their earlier M&A activities), is there a danger of creating a convoluted, near impassable maze?

Is it time to debate the Digital Only business model?

For many bank executives today, there are very real concerns about the impact on their business models by so called digital disruptors. The question is how long will that disruption last, and is being digital enough of a differentiator to create large corporate casualties?

If you are like me, then you must be getting tired of seeing messages about 'Unicorns' and how Uber owns no taxis, and AirBnB has no hotels blah, blah, blah. 

How important is a modern core banking system, really?

With an ever-increasing stream of digital-only banks springing up around the world, IBS Intelligence ponders how vital is it for these tech-savvy banks to have genuinely modern core systems?

Hats off to RBS

Hats off to RBS (not a phrase you will hear too often). However, given the latest in a sequence of high-profile computer outages the previous week, it was brave to put Kevin Hanley, director of design, services (whatever that means), in front of a roomful of analysts and press at SAP’s Financial Services Forum in London.

Times of change

The pace of change in the financial services sector seems unprecedented. Traditional business models are being dismantled at a rate that, for inflexible incumbents, must be alarming. It is not solely that enabling technology is hurtling forwards, it is also to do with the bigger picture of low margins, heightened customer expectations and increased competition.

Life after Deutsche Bank split?

Deutsche Bank is pondering the future of its retail operations and this might have significant implications for its IT landscape. A number of proposals are currently under discussion, which would see Deutsche Bank selling off its subsidiary, Postbank, and possibly its own branded retail banking business. According to Reuters, Deutsche Bank’s management favours the sale of Postbank but would prefer to keep its own retail banking unit.

Passing on the experience

By this time of year, everyone’s inbox is full to the brim with invitations to attend industry events. Old conferences come round once more, perhaps with a different brand or twist, while new ones pop up. In parallel, you could probably ‘attend’ an industry webcast every day of the week. Where the presentations are sales pitches or high-level repetition of industry issues, with no real answers, that’s when everyone turns to their personal devices and checks their emails – it is a fraught business holding an audience’s attention nowadays.

Blockchain to replace Swift?

It is interesting to compare the agendas of current annual events with those of one year earlier. For instance, in April 2014, Swift’s London Business Forum had no mention of bitcoin or blockchain. Roll forward one year and it was standing room only for its ‘What is the Future of Money?’ session with speakers from an array of companies that probably no one had heard of twelve months earlier (in part because some of them weren’t around then): Coinstructors, NXT 2 Pay, Innovate Finance, COLU and Epiphyte.

Payments: what is going on behind the scenes?

The payments space has been the most frustrating to report on over the years. There is a collective groan in IBS Towers when the big payments conferences come around again. It feels like the same old people talking about the same old things. There will be lots of focus on the high-level issues, including that ‘FedEx’ comparison once more (we can see our parcels at any point in their journeys, why can’t we do the same with payments, particularly as these are electronic so should be easier to track than physical goods?). But when was the last time you heard a detailed case study at one of the events from a bank that has actually addressed and solved the issues?

‘Old school’ rules?

Macquarie Bank ©Mal Booth, Flickr

It would seem that for all the chatter about component-based core system replacement and gradual renovation, plenty of banks are still going the ‘rip and replace’ route.

Take Macquarie Bank, for example. In 2012, one of its senior managers called core system overhauls ‘old school’ and that the best model was to supplement existing platforms with layers on top for services such as apps.

In 2013, however, the bank went ‘old school’ and signed for a new core system, SAP for Banking. It has recently reported reaching a milestone in this five-year, AU$250 million project.

Is this the worst fraud detection system ever?

Is this the worst fraud detection system ever?

Does Barclaycard have the worst fraud detection system ever?

That’s certainly what an acquaintance of mine thinks after having his card cloned in December.

Banking software market: more M&A to come

Broadridge HQ

As 2014 was drawing to a close, a handful of takeovers in the banking software space were announced but went under the radar. SS&C bought rival DST Global Solutions for $95 million, bringing rival investment management systems under one umbrella, whilst loss-making 3i Infotech shed its investment management software business in the UK to an Italian outfit, Objectway.