AFP Conference Highlights and Review

I spent most of last week at the AFP conference in San Francisco. Although attendance seemed to be rather dismal (I am still waiting to hear some actual figures), it was a great conference for me with very productive meetings. Most of my meetings were centered around online corporate banking and payments – hot topics these days. It did give me great satisfaction to learn that the estimates we came up with for IT spending earlier this year are on the money. IT spending on wholesale/corporate banking is skyrocketing (see the report, IT Spending in Banking: A North American Perspective) and some of the figures shared with me are staggering. I will actually be hosting a webinar on Bank IT spending on Oct 29th for those of you who are interested. Aside from IT spending growth, I noted several trends:
  • Next generation online cash management solutions are here. Bank of America, Citi, and some of the software vendors showed off some great online cash management solutions. For more info see my recent blog post, Peeking Out From Under The Hood – Next Generation Online Cash Management.
  • Online cash management will continue to evolve. Analytics, social media (primarily closed groups for corporate clients), interactive online training/education, desktop and online widgets, and MUCH more will start to peek out in 2010. I will cover some of these trends in the next iteration of our IT Spending report (due out in January 2010) as well as a future cash management report.
  • Payment hubs are transitioning from concept to reality. There has been lots of talk about payment hubs over the years, with few compelling live examples. Solutions that clean up the mess of back-end systems coupled with clean, simple and intuitive front ends are on the horizon.

Any other trends worthy of noting? Please feel free to chime in, your comments are welcome.

The Online Corporate Cash Management Market is on Fire!

Consumer online banking gets a lot of attention in the industry. It’s important to remember however that online banking reaches far beyond the consumer space. Businesses of all sizes bank online and they require more sophisticated solutions. We recently evaluated the vendors who provide online corporate cash management solutions. The report, The Next Generation of Online Corporate Cash Management Solutions is of particular importance for 2 reasons:
  • Online corporate cash management is taking center stage this year in the wholesale banking space.It is receiving increased attention as banks look to upgrade or augment their aging platforms to woo additional business. Growing corporate relationships is a major theme as banks aim to offset the lackluster growth on the retail side and focus on higher margin businesses that contribute to noninterest income. In fact, spending growth on online corporate cash management solutions by far exceeds IT spending growth of the overall banking industry.
  • Celent believes that a great opportunity exists for one or more vendors to stand out from the pack by demonstrating a differentiated Web 2.0 user experience. This has already started as a handful of the vendors we evaluated showed off differentiated experiences using Web 2.0 elements. Dashboards, interactive reporting, and improved user interfaces are starting to pop up as the vendors recognize the need for change and improvement.
If you want to find out how the vendors stack up using our ABCD methodology, please read my new report, The Next Generation of Online Corporate Cash Management Solutions. Celent can also customize this report for your financial institution to provide further information, and help you choose the vendor that is the best fit for your requirements. Please send me an email if you would like more information.

NACHA Payments – Trends and Thoughts Related to Online Banking

I got back late last night from the NACHA Payments conference in Orlando. It was a good event, although not surprisingly, it was apparent that attendance was down. Sessions seemed to be well attended, although exhibit hall traffic was light (and much smaller this year to boot). I spent most of my time at the conference in meetings with our clients – a mix of banks and software vendors. Most of my meetings centered around online banking and payments, particularly for small businesses and large corporates. A few noticeable trends emerged:
  • Web 2.0 is finally arriving to the business online banking space. Almost all the vendors I met with either talked about or showed me fresh GUIs with better navigation and layout. This is long overdue. A couple of the vendors have been working on this for a little while, and their advances made it into my upcoming online cash management vendor evaluation report (the report is complete. It’s now time for it to be edited and for the vendors to review their profiles prior to publication). Bank of America had an interesting but basic presentation on next generation Web 2.0 cash management solutions. I was quoted in the presentation, and it’s nice to see a bank thinking about the next generation of solutions.
  • Dashboards are a key component of next generation online banking solutions. This was definitely the buzzword. I discussed this at length in my report, Web 2.0: A Quantum Leap for Wholesale Banking .
  • Banks still don’t get the importance of PFM for small business. I seemed to be the one asking the questions about this. I would have liked to see greater emphasis on PFM, particularly with the Web 2.0 demos and discussions.
I also gave a presentation together with Bremer Bank and Fiserv called, Courting a New Kind of Customer: Serving Small Business Online. The session was well attended and there were a few good questions at the end.

Banks need to jump onto the PFM bandwagon

Wesabe announced today that they will start to sell their PFM offering (dubbed Springboard) to banks and credit unions. Wesabe is not the first vendor to start selling directly to banks. Earlier this year, Geezeo made a similar announcement. These are win-win moves for both the banks and the software companies: – Bank PFM tools cannot compete with the rich solutions offered by non-bank providers. They need to update their offerings in order to remain competitive and keep clients attracted to their sites. For more info see my post on PFM Meets Social Networking. – The non-bank PFM providers have been struggling to make money. Their products are offered free of charge to consumers and their online business models are questionable. Direct sales to banks will provide a much needed revenue stream. Expect to see more of this trend as we move forward. It will be interesting to see how this software will affect PFM usage growth at the banks.


PFM Meets Social Networking?

There was an interesting article this morning in American Banker called, “E-Banking, Meet Social Networking.” After reading the article I came up with 2 conclusions: – Banks need to improve their personal financial management offerings (PFM). The article talks about how Geezeo is offering a white label version of its PFM software to banks. While many banks have PFM tools that they make available to their customers, they pale in comparison to those offered by non-banks in this space (e.g., Wesabe, Geezeo). I would like to see a few banks come up with more competitive offerings (either on their own, or using a 3rd party). Customers really value these tools and they are being demanded, particularly in tough economic times when folks carefully track their spending. – Social networking can be an interesting component of PFM but is not an absolute requirement. This is a nice to have feature, but not one that will keep customers coming back, particularly in the short term. Basic community features would be nice, or at least some spending stats from the overall user base. However, I see customers gravitating more towards the functional component of PFM as opposed to the social networking aspect. In fact, some banks may be scared off if they have to deploy PFM and social networking features in one swift motion. Banks will want to have the option of choosing the features they want to turn on or off.

Blogs – Banks get it too!

Blogs are a great way to interact with the community at large. Banks are slowly but surely making use of blogs to communicate with their customers and the public. The early adopters like Wells Fargo actually have several blogs, including a new one called the Wells Fargo -Wachovia Blog. The Wells Fargo-Wachovia blog has a simple goal – to let customers ask questions and inform them about what’s going on. M&A for the masses! Bank blogs can take on many flavors. Everyone from large banks to little credit unions are taking part. Here are some additional examples: Verity CU BlogCelent recommends that banks explore the use of blogs and consider the various ways they can interact with the public. Those who have yet to do so should get a blog off the ground. Banks need to work on building and cementing relationships, particularly in these difficult times. A blog is a great way to interact with customers in a participatory manner and is yet another way to let them know how much you appreciate their business! I invite you to check out our series of reports on Web 2.0: Web 2.0 and Retail Banking: Less Hype Equals Opportunity Web 2.0: A Quantum Leap for Wholesale Banking