Archives for January 2013

ACI Acquires Online Resources

This morning, ACI announced that it is going to acquire Online Resources. It’s a bold move on the part of ACI, especially after their recent acquisition of S1. ACI is clearly working on growing market share, and adding to it’s vast treasure trove of fintech assets. My initial feelings regarding the acquisition are mixed. What works:
  • ACI picks up a bill payment solution, a critical component of a digital banking arsenal. Fiserv (Checkfree) and FIS are the dominant players here and it will be interesting to see how they will use their newly acquired bill pay asset. In other words, can they tightly couple bill pay to their existing online and mobile banking solutions and attempt to oust the dominant competitors?
  • ACI now has consumer online assets  that complement their S1 acquisition. Examples include PFM (MoneyHQ), and online account opening.
  • ORCC works primarily with smaller institutions. This speaks well to ACI’s direction over the last little while, particularly after acquiring S1 and their community bank and credit union clients.
What doesn’t work: ACI is in online banking overload. Celent believes that additional product consolidation will occur in the medium to long term because it’s onerous and cost-prohibitive for a vendor to support and maintain this many solutions:
  • Business online banking / cash management overload. Prior to acquiring S1, the only solution ACI had was Enterprise Banker. With the S1 acquisition they added Business Online Banking for Community Banks and Credit Unions, Business Online Banking for Regional, National, and International Banks, and WebFederal for Credit Unions. With the ORCC acquisition they add Business Banking and Quotien Small Business Banking. If my math is correct that adds up to 6 online banking solutions for businesses. That’s no small portfolio to manage! ACI has already made some decisions regarding the S1 portfolio. For the midsize to large bank market, ACI has announced that both Business Online Banking and Enterprise Banker are strategic components of its long-term vision. They have positioned S1’s larger bank solution (now known as ACI Universal Online Banker) as the global product of choice and the ACI solution (Enterprise Banker) as a US-centric hosted solution.
  • Consumer online banking overload. ACI did not have it’s own dedicated consumer solution, but with the S1 acquisition they added Online Banking for Community Banks and Credit Unions, Online Banking for Regional, National, and International Banks, and WebFederal for Credit Unions. Now they are adding ORCC’s Advantage (ASP) and Architect solutions (on premise or hosted).  A total of 5 consumer online banking solutions.
There’s a lot more to talk about here as ACI has acquired all kinds of complementary assets from ORCC including lending solutions, and an array of payments solutions. If you would like to learn more about this acquisition please comment here and/or contact us.

3.12.13: Celent Asia Webinar: Mobile Payments in South Korea

Celent analyst KyongSun Kong This event is free to attend. Celent clients and the media will have access to the webinar’s PowerPoint presentation after the event. Please click here for more information.

3.7.13: Celent Banking Webinar: Debunking Mobile Payments Myths

Zilvinas Bareisis, Senior Analyst, Celent’s Banking Group This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$250. If you are unsure of your client status, please contact Steve Nawrocki at +1.617.262.3128 or Please click here for more information.

3.13.13: Celent Banking Webinar: Top Trends in Corporate Banking 2013

Robert Mancini, Senior Analyst, Celent’s Banking Group This event is free to attend for Celent clients, flex-plan clients, and the media. Non-clients can attend for a fee of US$250. If you are unsure of your client status, please contact Steve Nawrocki at +1.617.262.3128 or Please click here for more information.

Celent Innovation and Insight (I&I) Day Contest – Prizes!!!

Celent is challenging all to come up with the best definition of innovation in six words or less. We will be evaluating these stories as definitions and selecting a winner at Celent Innovation and Insight (I&I) Day in Boston on February 27th. There will be prizes! We encourage you to come up with your own definition and submit your entries to us. You can leave comments on this blog, send an email to Erica Ferguson at using the subject line “Innovation Is” along with your contact information, or join our LinkedIn group created especially for this challenge. We have received numerous submissions so far! You can check out your competition here. I can’t wait to read your thoughts on innovation and see you at Celent’s I&I Day in Boston. I have put much thought into this challenge and came up with several definitions myself. My favorite definition for innovation is only three words. In essence, innovation must meet two important criteria. First, it must include some element of difference or change of the current process. Second, and equally important, it must be appealing. Hence, my entry: Different and Cool Some important guidelines to your entry: 1. (Legitimate) hyphenated words count as one word. 2. You may use a maximum of six words. You may use fewer, but under no circumstances should you use less than one. 3. Creative use of spaces within made-up words may be allowed at the discretion of the judges. 4. The use of pictures is not permitted (after all, a picture is worth a thousand words). 5. Some settling of contents may occur during shipping and handling.

Bank IT Spending and Trends: What Does 2013 Look Like?

The new year brings lots of questions, planning and decision making. IT spending is tied directly to these elements, and as in past years, we have been receiving a truckload of IT spending questions. After a rocky few years folks are curious as to if the figures are on the uptick in 2013. The short answer is yes, but growth rates vary by region (4.0% growth in North America, 5.9% in Asia Pacific, and a flat 0.4% in Europe. The long answer, well, you will have to read the reports! Here is a quick snippet from, IT Spending in Banking: A Global Perspective (published earlier this week):
Total bank IT spending across North America, Europe, and Asia-Pacific will grow to US$179.2 billion in 2013, an increase of approximately 3.4% over 2012. This slight upward shift is an encouraging indicator of future growth; however, regional nuances cannot be ignored.
We have published a series of six reports this month that are relevant to all organizations: Happy reading!

ING Direct Canada – TV Commercial Ignites Social Outcry

ING Direct Canada recently launched a new marketing campaign in order to promote RSPs (Retirement Savings Plan). The campaign includes a TV commercial that depicts someone suffering from anxiety and depression during RSP season. The commercial has resulted in a rash of negative comments and complaints (see ING’s Facebook page below) alleging that the commercial is inappropriate as it pokes fun at mental illness. I noticed only a handful of online users that have no problem with the advertisement, with one Facebook user saying, “Are you serious? I’m sorry, but people get offended *way* too easily, nowadays. And this is coming from someone who has dealt with a mental illness for more than half their life.”

ING Direct Canada is a very social media savvy institution. Their CEO is a frequent Tweeter and they regularly leverage social channels for marketing and promotions. Given the public outcry, they are now faced with a social media crisis and it will be interesting to see how they deal with it. Their social media skills are about to be put to the test. ING Direct announced earlier today that the TV spot will be pulled.

How do you think banks should deal with social outcry? Yes, this is about to become yesterday’s news but it still needs to be dealt with. Financial institutions can learn a lot from this situation, as banks are regularly bashed in social channels. It’s important to know how to listen to and engage with the public and also send out the appropriate messaging. Please weigh in with your thoughts and opinions.

Innovation: Hotpants vs. The Knockout Mouse

It seems a good time to remind you about our innovation competition, with just over a month to go to our annual Insight & Innovation Day in Boston (more details here). As food for thought, I’d encourage you to listen to this podcast/videocast that I came across this week. Tim Harford describes himself at as the Financial Times “Undercover Economist” and has a successful radio programme in the UK (“More or Less”) where he debunks the (misused) stats used in the media. If you’re a numbers nerd like me, you’ll enjoy it and you can subscribe on iTunes or on the BBC. He’s now started another show (or on iTunes) called Pop-Up Economics. The episode I’m referring to is called “Hotpants vs. The Knockout Mouse”. It’s not about banking, but a fascinating tale nevertheless. I don’t want to spoil the fun (and the reason for the blog  title), but the essence of the story is this. Team GB’s success at the Olympics at track cycling – they won 70% of all the Gold medals plus a silver and a bronze – was in part due to a man called Matt Parker. Matt has a job called Head of Marginal Improvements. He looks for those tiny incremental changes that make the difference between winning and losing. In short, he is innovating in all but name, with other teams now copying what he implemented. Tim then went on to talk about the scientist Mario Capecchi. For those of you unaware of Mario, his life story sounds like an improbable Hollywood blockbuster, but is probably the reason the person Mario is. Mario is convinced that incremental changes will only create only create incremental improvements, and that we ought to strive for the achieving the impossible. He was told something was impossible – and he eventually went on to win a Nobel Prize for not only doing that impossible task, but exceeding it to. The moral for me then is that innovation isn’t one thing, but tackling the problem from both ends. My entry: Innovation is about thinking both big and small.

The Power of Headlines

We are all familiar with the power of a good headline – it grabs our attention and compels us to read the rest of the story. In the world of printed newspapers, front-page headlines are there to sell papers. And it seems that ability to write a witty headline is a pre-requisite to getting a job at any of the UK’s tabloid newspapers. Headlines also have the power to mis-lead. Just a few days ago, a news story caught my eye, which implied that 42% of the US POS terminals were infected by malware. With a healthy dose of disbelief, I clicked on the link and sure enough, it became clear from the article itself that 42% of all known instances of a single malware type were detected on the US terminals. The story and the headline’s implication couldn’t be further apart. As someone who keeps an eye on the developments in mobile payments, naturally, I was intrigued by some other recent headlines announcing that “the UK banks were to launch mobile P2P network next year.” Did I miss something? No, there was indeed a new announcement by the UK Payments Council, but it was talking about the same initiative announced nearly a year ago on 21st Feb 2012. And it became clear shortly thereafter that the service would likely be launched in 2014. As far as I can tell, the main piece of news this time is the list of 8 banks who have now committed to launching the service. Again, given that it was expected to be an industry-wide initiative from the start, it is no surprise to see all the major UK banks signing up to this, including Barclays, which has its own P2P service, PingIt. For our non-UK readers who may have missed the story last year, The UK Payments Council has commissioned VocaLink to build a central database that will allow bank customers to link their mobile phone number to their bank account. Having done so, they will be able to send a payment from their mobile phone by simply entering someone else’s mobile phone number and would not need to know their banking details. The actual payment would run over Faster Payments, a system that’s run by VocaLink and settles payments in nearly real-time. Is P2P really that important in the UK? Despite some early successes of PingIt, I think the jury is still out. Obviously, it simplifies making a payment to another person (or potentially, business) which is a good thing. However, in the UK it is already quite common to tell someone your bank account details for them to make a one-off payment. As I pointed out in my blog commenting on the original announcement, the ever-popular “splitting a restaurant bill” example is over-used – most people in the UK would settle the bill by asking the waiter to split the total onto multiple cards right there at the restaurant. And the popularity of Direct Debit drastically reduces the need to proactively pay regular bills. Paying to a small business/ merchant/ tradesman appears the most promising scenario, but there this payment method is going to compete against the new mobile POS solutions, which enable those same tradesmen accept cards, and more realistically, cheque and cash payments, the ingrained practices of today. Having said all this, it’s a very welcome initiative and it could be just a start. As the service grows, I would expect it will allow use of other proxies in addition to the mobile phone number (e.g. email, Facebook account, etc.) and will enable them to be linked to multiple bank accounts. And once the infrastructure is built, other services (e.g. merchant payments) can be developed, which would help the UK banks maintain their leadership in payments. I am looking forward to the real news announcing the launch of the actual service in 2014.