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Howard Bruck, CIO, Hudson Valley Bank

By Howard Bruck

Not since the availability of the ATM has the banking industry experienced such momentous change.

We are obliged to create products and services valuable to our customers doing their banking business on the internet and on mobile devices, all while maintaining responsibility for the highest levels of compliance and information security in environments we don’t always control.

This new world of the empowered customer has created a continual “when you want it, it will be there” customer mentality as the new reality of how they expect to interact with their financial institutions. 

According to the Federal Reserve, 20 percent of financial institution customers are already using mobile banking, and another 13-20 percent said they will be by the end of 2012. In addition, 60 percent of new customers said that being able to use mobile banking influenced their decision to switch while 11 percent of users are already using their phone’s camera to remotely deposit checks.

Offering banking services that move information, advice and money in a faster, more personalized way requires a whole new interface focused on how customers leverage their social and mobile banking experiences. And as market penetration of Internet-enabled smartphones continues to grow, the utilization of mobile banking and mobile payment technologies also increases.

And if banks fail to reinvent their services to reflect these societal and behavioral changes, they risk seeing their relationships taken over by competitors who do understand and are working to harness this new paradigm to focus on the individual customer more effectively.

Increasingly, it’s the cloud that allows banks to transform how their customers research and buy financial services and products, and manage their personal finances in this era of anytime/anywhere access.

As banks and customers continue to move more towards online transactions and away from paper, we see not a challenge, but an opportunity to become more efficient. We see a tremendous amount of value created through the transaction itself to analyze a customer’s financial situation in a much more meaningful way. With analytic insight, we can more closely examine things like fraud detection and fraud prevention that was impossible in a paper-based world.

Furthermore, as more and more consumers choose to engage with their banks while mobile, banks will need to develop smartphone apps and mobile-centric web sites. Mobile engagement requires a robust infrastructure that cloud technologies can provide.  

In community banking, technology has been the proverbial double-edged sword. One effective edge is the ability to sell valuable products and services tailored for the individual customer. The dangerous edge is the complex and expensive burden on the banks, many of which are ill-equipped to administer the IT necessary to support these necessary advancements.

Strategic partnerships can also enable banks to tap the necessary IT expertise and capabilities while keeping their focus on building their core business, providing innovative services to the customers.

But cloud technologies will enable the sword to be swung safely – to enable banks to return to the simplicity of the past, but also serve and thrive in the future.

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