ACI Acquires Online Resources

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.

Serving Small Businesses in a Digital World

Serving Small Businesses in a Digital World
The small business online banking space is fraught with confusion. Banks are still struggling to understand if their customers should be placed onto consumer online solutions, dedicated small business solutions, or even corporate cash management offerings. Today, the majority of small business online banking users are running on consumer solutions. By definition, this means that small businesses’ needs are not being met. That’s just the tip of the iceberg. Last week I published a new report that is all about figuring out how to serve small businesses in a digital world. This is no easy task given the unique state and requirements of this segment. It’s also amazing to me how many start-ups have popped up in this space over the last few years. Most are battling it out on their own, going after small businesses directly. A handful are using financial institutions as their distribution channel. It makes a lot of sense for banks to be the go to source for small business financial services. Figuring out what to offer via digital channels is just one of the challenges. There are far bigger issues for banks to tackle before even going down the digital route. Here are a few examples:
  • What exactly is a small business and how do we segment our small business customers?
  • Where does small business sit in the banking organization? Who is responsible for it? Should it be retail banking, corporate banking, something else?
  • What should be done with small businesses who are being treated as consumers (from a product and servicing perspective)?
  • What should we be asking small business customers about when we survey them and speak to them? How do we ascertain their needs?
The report goes through these issues and more, and of course dives into all kinds of trends related to online, mobile, and tablet for small business. Banks have a lot of work to do – there is an eager small business audience that awaits them and a slew of start-ups attempting to eat their lunch. If you would like to check out the full report please click here.

Bank Websites Under Attack!

Bank Websites Under Attack!
A rash of denial of service attacks hit major US banks this week. These are scary incidents that wreak havoc for banks and their customers. For now at least, these attacks appear to be limited to online sites, and are therefore interrupting the online banking activities of the US public. Online banking is a mainstream channel – one that cannot be interrupted. Furthermore, online disruptions shake consumer confidence and can damage a bank’s reputation – financial institutions are trusted entities that are supposed to be safeguarding assets. If they can’t keep the front door locked, what does this mean for the deposits stored on the inside? What can financial institutions do and what does this mean for customers?
  • Reassure and communicate regularly with the public. This was a serious issue when Chase had a major web site outage last year. Tweet, get onto Facebook, reply directly to customers. Don’t just listen, watch, or provide generic replies with basic info. Address customers, point them to channels that do work, direct them to nearby branches, have customer service reps call them. This is easier said than done as call centers are overloaded. PNC, the latest bank to come under attack has but a handful of tweets today – all very generic.
  • pnc

  • Be prepared for round two. Right now these attacks appear to be concentrating on bank web sites. Could a completely different type of attack (e.g. a data breach) take place in the next round of cyberwarfare? Banks definitely have to be on the lookout for this. It wouldn’t surprise me to see hands try to enter the cookie jar in an attempt to steal customer information and/or assets. This isn’t happening right now, but banks have to be prepared for what could happen next.

No matter how you look at this, these attacks are terrible. We live in a world where consumers have come to rely on digital transactions (and they should). Attacks like these shake consumer confidence, and eat up precious bank IT dollars that are already quite scarce. Please feel free to chime in with your comments.

Finovate Fall 2012 Recap

Finovate Fall 2012 Recap
I spent part of last week at Finovate Fall in New York (Celent is a proud Finovate partner). I always love the Finovate events – they provide me with a front row seat to examine the latest and greatest in banking technology. I’m primarily interested in companies showcasing emerging technology, and understanding how these technologies and solutions can be harnessed by financial institutions. I’m also really interested in firms that are coming way out of left field – in other words, demonstrating novel approaches to solve consumer challenges. Here are my favourite 7 minute demos (in no particular order): Shopkeep POS. An iPad based POS system complete with inventory management, mobile payments support, and reporting/analytics tools. LearnVest. An online tool for creating and managing a financial plan. Offers a fee-based service to connect you with a financial planner with relatively reasonable pricing. The Currency Cloud. Provide a cross-border payments and forex solution via an API. The API can be used by firms looking to provide cross border payments services. Innotribe Startup finalist TransferWise is an example of a firm that is utilizing this API. Personal Capital. I’ve written about how mass market PFM simply doesn’t work. Personal Capital is basically a wealth management PFM with a super slick UI (online, mobile, tablet). Dashlane. I like shopping online, but despise the experience of shopping using my mobile phone. Dashlane presented an elegant solution to streamline the experience. I’m not a great fan of data being stored locally on the device (encrypted). Most innovative Company:

C.K. Mack. An online investment tool that allows users to invest in real estate income properties. I really love that this is different, but I actually dislike it from an investment angle (per my tweet):


Most Overrated Demo:

MoneyDesktop. This PFM player caters to smaller institutions via a range of partners. To be fair, I really like the MoneyDesktop solution and user experience. I especially like that they have synchronized their solution across online, tablet, and mobile. What I didn’t like was the “bubble budgets” that everyone at the show was raving about:


I got a lot of flack from others about this comment, but hey, to each his own. There is so much more to PFM and what should be encompassed in next gen PFM and online banking. MoneyDesktop has some of that going on, but the demo focused on these bubbles complete with dueling iPads – highly entertaining, but not what I would call innovative or game changing. If you want to learn more about next generation PFM and online banking, come out to my BAI Retail Delivery session on this topic.

Thanks to Jim, Eric, and team for another great Finovate event.

Are Bank Facebook Apps the Future of Digital Banking?

Are Bank Facebook Apps the Future of Digital Banking?
Should banks have a Facebook presence? What should they actually offer to customers via Facebook? Should it be informational or dare I say it, transactional? A couple of interesting announcements and feelers have surfaced lately:

A handful of banks have already gone wild on Facebook , a notable example is ICICI.


Is Facebook going to be a viable access point for consumer transactional needs? In my opinion, banks that are enabling or attempting to enable transactions via a Facebook app are barking up the wrong tree. I’ve seen nothing to suggest that customers want this or would even use this. In fact, I’ve seen evidence of the contrary. Security concerns are without a doubt the number one issue. Furthermore, most US and Canadian banks have to jump through multiple compliance and legal hoops simply to post basic info on Facebook. My quick take – banks have so much room to improve across digital channels. Time and money are better spent improving online, mobile, and tablet experiences. Even if banks do go the route of offering Facebook transactional banking apps, they are likely to suffer the same fate as iGoogle. The web is boundless, and I don’t see Facebook as the primary “portal” for transactional banking. Facebook is still primarily about interacting with friends and family. Brands clearly have some sort of home on Facebook, but hey, we all know what the value of a “like” is really worth on Facebook (or do you?). Please chime in. Are Facebook banking apps the future of digital banking?

iGoogle is Dead. Are Online and Tablet Banking Dashboards Next?

iGoogle is Dead. Are Online and Tablet Banking Dashboards Next?
Google has announced that it’s going to deep six iGoogle, its dashboard portal to the web. Google is shutting it down because it claims that iGoogle, “had become less relevant in the age of the mobile Internet.” There are likely numerous reasons for this shutdown – Google’s “spring cleaning effort,” politics, centralization of web apps in Chrome, etc. I’ve personally always liked iGoogle and the concept behind iGoogle (although I have to admit I don’t use it much). In fact, the launch of portals like My Yahoo and iGoogle supported my thinking and research on the creation of online banking dashboards. This dashboard concept is something I have been writing about for years now, and banks and software vendors have been somewhat slow to catch on. This has however started to change, especially as tablets enter the picture – the perfect use case for a rich and interactive dashboard. Does the death of iGoogle mean that banks should abandon all plans for an online banking dashboard? Should software vendors be fearful that their investment in dashboard creation has been in vain? Absolutely not. In my opinion, iGoogle was axed because it becomes secondary to the Google experience. The web is boundless. In other words, when users go to Google they can launch into literally anything, based on their search. iGoogle attempted to box in the web. Online banking has boundaries, it’s limited to select functionality and activities. It works to have key areas grouped onto a rich dashboard – these groups are the home of widgets that can be informational, transactional, managerial, service related etc. There is a case to be made for bringing as much of that functionality to the forefront of the online banking experience – it improves user efficiency and experience, it can showcase other bank products. I can go on and on here. Unlike iGoogle, we have just touched the tip of the iceberg when it comes to online banking dashboards. The tablet will influence much of this experience (you can read about this concept here). This type of environment is starting to take on a prominent position, as banks catch up to the design of an offering that Google launched in 2005!

The “P2P” Payments Battle is Raging

The “P2P” Payments Battle is Raging
There are so many choices when it comes to P2P services offered by banks. Yesterday, clearXchange announced that it has finally gone live for payments being sent between Wells Fargo and Bank of America. This isn’t the first big move in this space in 2012 – Fiserv announced in late February that it is combining ZashPay and Popmoney. There’s a battle taking place, and it’s not going to be pretty, especially as clearXchange adds more banks into its mix. What does this all mean? There are several important questions to be answered regarding consumer payment solutions offered by banks:
  1. Can banks dominate the P2P payments landscape? Will customers go to banks or alternative payments providers?
  2. Is there really a difference to the customer between a “P2P” payment or a bill payment (a payment is a payment)?
  3. How do mobile and tablet devices factor into the picture?

There are going to be some significant changes over the next few years to the consumer payment options offered by financial institutions. I’m going to address these questions and more in an upcoming report – stay tuned! In the meantime, please weigh in with your comments and questions.

Top Trends in Corporate Online Banking

Top Trends in Corporate Online Banking
There is a lot going on in the cash management space, and numerous banks are steadily working on plans for up to date portals, solutions, and experiences. I published a new report last week, Top Trends in Corporate Online Banking. The report examines and analyzes the top trends in online cash management, and provides recommendations for financial institutions. Some of the trends are in full swing; some are nascent; others are expected to impact the space within the next three to five years. I encourage you to take a look at the report, and explore some of the trends. Mobile banking, social media, portal development, fraud prevention, the role of the tablet, and much more are covered in this report. I also recommend that you read this report in conjunction with, Corporate Mobile Banking: Revolutionizing Cash Management. I look forward to hearing your thoughts, and please feel free to weigh in here with online cash management trends and observations that are top of mind.

The Battle For Transaction Rewards

The Battle For Transaction Rewards
Last week Zil Bareisis posted a great blog entry regarding American Express’ Tweet Your Way to Savings Program. It’s a mighty interesting concept and provides quick cash back rewards to cardholders. It raises a few relevant questions for me:
  1. Are social rewards a passing fad? While this Amex/Twitter hookup received a fair bit of attention is it going to stick? It reminds me of a SPG promo announced about a year ago that offered 250 Starwood points for every Foursquare checkin during a hotel stay. Being a regular traveller, I tried this a few times and received some bonus points. I’ve since totally forgotten about it, and I am a points junkie! I don’t have any hard stats but I’d wager that usage of this promo has dropped off. Will the Amex/Twitter offers follow the same fate? There are hard dollars and a larger number of merchants involved here (see list of Twitter offers here) so it’s a tad different.
  2. Do social rewards increase brand loyalty? Everyone likes a good deal these days but how much loyalty is this actually creating? Would you, for example, switch to McDonald’s from Burger King in order to cash in? Would this create additional loyalty towards Burger King?
  3. Will social rewards drive folks to regularly transact using Amex cards (over another payments vehicle)? There is a battle brewing between merchant rewards online banking solutions and American Express. As Zil noted, there are quite a number of vendors in this space. Cardlytics in particular has been successful at penetrating the large bank market and has also formed partnerships to deploy via Intuit and Fiserv. The Amex/Twitter program is a direct attack against online banking merchant rewards. It’s but a blow in what is going to be a drawn out battle to own the transaction.

There are lots of questions for the moment and not a lot of answers given the immaturity of this space. I welcome your thoughts and comments.

A New Player in Small Business Online Banking. What The Intuit/Bottomline Deal Really Means

A New Player in Small Business Online Banking. What The Intuit/Bottomline Deal Really Means
On March 5th, Bottomline Technologies and Intuit announced an interesting deal. There are two components to the deal:
  • Bottomline acquires Intuit Financial Services commercial banking business for $20 million
  • The two firms have formed a partnership and will work together “through cross promotions, referrals and joint sales efforts to deliver innovative solutions for financial institutions of all sizes.”

Several Celent clients have contacted us to gain a better understanding of this deal and what it means for the market. I interpret this in a very straightforward manner:

  • Bottomline has lacked a small business offering and now they have one. This now allows them to attack an additional segment of the business market. It also allows them to move downstream to work with smaller financial institutions and their small business clients
  • Intuit is a small business powerhouse, and although they sold off their “commercial banking” business I have no doubt they will continue to tackle the small business market. What’s interesting here is that although the assets they sold have been labelled “commercial” and have some commercial capabilities, they are in fact being used by plenty of small businesses. Celent has reviewed Intuit’s solution as a small business solution, based on the size and nature of their current bank customers. It will be interesting to see how Intuit’s consumer online banking solution will evolve in order to serve micro and small businesses. I see Intuit paying extra attention to the small business market moving forward, so even though they sold off some assets this is still a player to watch.