Ademola Adewale,
Executive Director, Operations & Technology,
Keystone Bank Limited

By Ademola Adewale

The next phase of banking sector reforms and consolidations in Africa’s most populous nation will be driven, not by the industry regulator or by industry or market forces but, by technology, technology and technology.

Computing technology has become a key business driver for Keystone Bank as we embark on a comprehensive overhaul of our systems, processes and human resource assets and capabilities.

Like financial services institutions all over the world, Nigerian banks are increasingly realizing the transformative powers that technology can inject into their products/service delivery offerings and by extension, their reputations and expanding balance sheets.

Technology has become a must-have tool. Previously perceived as a good-to-have box of machines used to automate back-end operational processes, computing technology has now permeated all the facets of banking operations from the back office IT and computational functions, to the banking halls, right through to the fingers of customers at the ATM or Point-Of-Sales (PoS) terminals.

Beyond their roles as financial intermediaries and corporate entities helping to drive and support government’s nation-wide economic growth and development agenda through their investment, trade financing and deposit mobilization activities, Nigerian banks are also beginning to see tangible benefits in-house as they experience increased efficiencies and a revamp of their corporate cultures. This is the silent experience of technology utilization at Keystone Bank, a mid-sized Nigerian financial institution licensed in August 2011.

At Keystone Bank, a new dawn beckons. Thanks to our investments in the latest, best-in-class server technology, end-to-end implementation and excellent partnership and support from IBM, old ways of “functioning” have given way to new IT systems, a fresh and innovative service delivery culture, and a customer-centric operational attitude.

Our vision of setting the pace in financial services delivery predicated on robust technology platform has become a reality.

Based on the implementation of the IBM Power Systems and other top rated banking solutions, Keystone Bank has been positioned as one of the leading banks in the use of technology for delivery of excellent services and innovative solutions in the industry.

As a technology driven bank, the IBM Power Systems Enterprise Servers have improved the up-time of the Bank’s Automated Teller Machines, PoS machine, and the speed of e-banking transactions; we are, thus, well positioned to deliver excellent services in support of the Central Bank of Nigeria, Cash-less policy.

We are now in the era of Big Data. Industry statistics estimate that banks in emerging markets spend between 7-10 percent of their operating income on managing data.

Big Data imposes a fresh set of challenges for banks – the integrity and security of customers transactional information and data, data mining and analytics, business growth and exponential growth of data volumes, just to list a few. Our extant working relationship with IBM has proven to be timely tonic for the Bank.

Keystone Bank’s IBM Power Systems have enhanced the bank’s computing capabilities. Our back-end operational processes have significantly improved to higher efficiency levels hitherto unseen in the history of the bank and our ability to service internal and external stakeholders of the bank has been strengthened.

Keystone Bank’s history reflects an enduring tradition of embracing change. As the Bank’s management team prepares for its next phase of business transformation and growth, technology will no doubt enable it deploy Smarter Banking concepts and principles.

Technorati Tags: africa, banking, Big Data, IBM Smarter Planet, innovation, Keystone Bank, smarter banking, smarter commerce, transactions

Miles Nosler, Student, Texas State University

By Miles Nosler

Over the last few years, whenever I saw an IBM Smarter Planet commercial on television I wondered what was behind things like Smarter Transportation? Smarter Cities? Smarter Commerce?

Since then I’ve come to understand what the Smarter Planet concept is about – tackling Big issues with smarter, interconnected technologies to improve the way we live and work. But, it didn’t truly sink in until I started crunching some Big Data with an IBM mainframe. Let me explain. 

If someone told me I would take the top spot among 4,600 very smart students competing in IBM’s Master the Mainframe contest, I wouldn’t have believed it. But that’s exactly what I did, and now I have in-demand technical skills on my resume that are landing me job interviews. 

Miles Nosler with IBM ‘Master the Mainframe’ Award.

I first heard about the contest in 2011 at Texas State University where I’ve been taking evening classes to complete my Computer Science degree while working full time as a software engineer.

The contest rules specified that no previous mainframe experience was necessary, so I signed up and actually did better than I anticipated, earning an honorable mention in the competition. I was immediately hooked on the raw computing power of the mainframe and its ability to crunch massive amounts of Big Data.

The contest is open to high school and college students across North America (and in dozens of countries worldwide) and is run in three parts with each designed to get progressively harder.

The first part introduces students to the mainframe and gets them comfortable accessing it remotely. The second introduces advanced commands and system setup techniques, and the third part has students applying these skills to solve a real world business problem.

When IBM announced the 2012 contest, I jumped at the chance to compete so I could add more mainframe experience to my resume. I worked hard to be one of the first 2,500 students to get a 100 percent score on part one, and advance to the second part where I was one of the first 60 contestants to get a perfect score. 

The third and final part was the toughest and most exciting. I had to apply my new skills in a real world scenario where a bank migrates Big Data to a new mainframe while keeping its doors and Web site open to customers.

What impressed me most on the final part was the mainframe’s ability to effortlessly crunch this data and get it where it needed to be inside the business. That way, the bank could offer more personalized products and services based on what customers were telling them. Aha! Smarter Banking!

It had taken me weeks to solve this challenge, and I earned the top spot among all of the competing students to get it 100 percent right.

As the first place winner, I won cool prizes including a tablet computer and an all-expense paid trip to IBM Poughkeepsie where they make mainframes.

I posted my freshly-minted resume on IBM’s System z job board and immediately caught the attention of two potential employers looking for candidates with mainframe and Big Data skills. I’ve had two successful interviews so far and expect job offers will soon follow.

The experience I gained competing in IBM’s Master the Mainframe contest provided me with marketable IT skills in a hot job market. I can even tell an employer what Smarter Banking means.

I encourage all high school and college students to participate in next year’s contest. No experience necessary. Check out the official Facebook page for updates.

Technorati Tags: Big Data, IBM Master the Mainframe, IBM Smarter Financing, IBM Smarter Planet, innovation, Texas State University, Watson

Charaka Kithulegoda, CIO, ING DIRECT

By Charaka Kithulegoda

It’s estimated that there are more smartphones on the planet than humans. By 2016, more than 10 billion smartphones will be in use around the global. And Canadians are leading that growth, with more than half of Canadian smartphone users banking from their mobile device – and that number grows even higher when looking at those between 18 – 34 years of age.

Our customers expect to be able to connect with their friends and family, browse and shop and of course, bank from their mobile devices. As the mobile marketplace continues to grow and expand, mobile banking is not just a convenient option for our clients, but a must have. So how do we provide our customers with easy access to their money at any time, wherever they are?

Working with IBM, ING DIRECT Canada has developed a long-term, secure strategy around our mobile architecture supporting multiple devices. This has allowed us to fast-track the delivery of mobile banking applications for all mobile devices. For example, our iPad application, developed with IBM, has a dashboard view that users can customize based on their frequently-transacted activities.

But we not only embraced mobile banking, we took it a step further and embraced social banking – providing our customers the ability to bank and transact from wherever they are and this includes social applications like Facebook and Twitter.

Our Facebook application, for instance, makes banking easy and secure. Customers can go from chatting with friends to checking out their accounts with the click of a key. Our customers were already logged onto Facebook, interacting with friends and family. Why make our clients log out, just to log back into our mobile site? Instead, we made it easy for our customers to bank where they already are.

Social banking has also helped us encourage our customer to save, through a program called Small Sacrifices. In a recent survey, we found that 52 percent of Canadians said that if they were able to better visualize what foregoing their daily, weekly and monthly spending on non-essential purchases looked like, they would save them over the short and long term, they would change their spending habits.

With client preferences at the heart of our business, we helped our customers visualize how cutting out everyday indulgences, — i.e. Small Sacrifices — could lead to big savings over the long term. It’s simple, but very effective. First, users choose what small sacrifice they can make, like passing on a daily coffee purchase. Then users decide which goal to redirect the money to, like their retirement fund or savings account. Once the user specifies how much money they spend on their average, Small Sacrifices creates a chart illustrating how much could be amassed in five- and 25 years by saving that amount weekly. The next time a user is tempted to spend on their non-essential purchase, they can choose to instead redirect that money to a savings or retirement account with one simple click.

At ING DIRECT, we understand that mobile technology is here to stay. It’s changing how we live our lives by helping make everyday tasks easier and more convenient.

Clients are telling us what they want and how they want to use our products and services. We have embraced this rapid evolution by providing open and engaging solutions that offer immediacy and simplicity through a highly contextual experience.　

Technorati Tags: IBM Smarter Planet, mobile applications, mobile banking, mobile computing, smarter banking, social banking, social business, social media

Alejandro Valenzuela, CEO, Grupo Financiero Banorte

By Alejandro Valenzuela

Not many companies can say they’ve been in business for more than a century. As the CEO for Grupo Financiero Banorte, better known as Banorte – Ixe, one of Mexico’s largest banks, I’m proud to say we’ve been serving our customers since 1899. You can imagine how many changes Banorte–Ixe has gone through the course of 114 years—where the exchange of monies once came in the form or bartering and loans were handwritten on paper, banking is now marked by national currencies and automatic tracking through intricate technology systems. Today’s banking industry looks and operates in a very different way to how we began.

Every transformation we’ve underwent as a company has been in response to the changing needs of our customers. We started as a very small local bank in Monterrey, and here we are, 2013, as the third financial institution in México. We find our business undergoing yet another shift, but again, with the same focus in mind: our customers.

Over the next 10 years, Banorte–Ixe will partner with IBM to create the best experience our clients will have witnessed over the past century. Through the utilization of Big Data, analytics, cloud, social business technologies and marketing automation capabilities, we are confident that this new era for our institution will transform and improve customer attraction, satisfaction and retention.

In fact, Banorte–Ixe is the only national bank that is still controlled and operated by Mexicans. There’s a reason for that—no one knows and understands our customers better than we do.

That’s why as we dive deeper into a world marked by digital interactions, Banorte – Ixe, as a company must provide those same experiences to our customers. Whether a customer is visiting a local branch, using the neighborhood ATM or signing onto our online banking tool, we want their experience to be a personalized one.

In the banking environment, every single transaction we make with a customer is a piece of information. Banking is unique in the sense that our industry already has an enormous amount of unstructured and structured data at hand—and in Banorte–Ixe’s case, more than a century worth of data. In light of this, we plan to capitalize on all this information to make sure we’re offering our customers personalized and superior services they not only expect, but that they clearly deserve.

While Banorte–Ixe is focused on creating the best possible experience for our customers, we also want to improve our own internal operations, how we function as a company, and how our more than 25,000 employees interact with our customers. This partnership with IBM will support our institution to improve organization-wide efficiencies, and help us advance our strategic goals to increase profits.

This partnership goes beyond technological innovation; it implies a significant change in our way of thinking and a profound processes transformation. We want to become one of the best banks in the world, in terms of personalized services.

At Banorte–Ixe, we will continue to invest in talent, infrastructure and in technological tools necessary to attract, retain and serve our customers by offering value enhancing financial services. With our customers at the center of every decision we made, we continue to keep them at the core, as they are the ones that truly decide with which institution they will choose to undertake their financial services. We want to strike to be their best option.

Technorati Tags: Analytics, Big Data, cloud computing, Financial Services, IBM Smarter Planet, innovation, mobile, smarter banking, smarter business

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.

Click here to view the embedded video.

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.

Technorati Tags: banking, cloud, cloud_computing, IBM Smarter Planet, mobile banking, smarter banking, Smarter Cloud

Suresh K L, Chief Information Officer, Fidelity Bank

By Suresh K L

Like many other countries in Africa, Ghana’s banking sector is in the midst of its most transformative phase.

The sector has expanded substantially over the last ten years, characterized by branch expansion and increased capitalization as financial institutions move to meet growing demand for consumer banking services across the country.

This is due to the continued economic growth, foreign investment, increasing diversification and a number of large investments in both the private and public sectors in Ghana and across Africa.

New technologies are helping to drive a wave of innovation across the African financial services sector as banks create new and accessible banking channels and take banking services to previously unbanked parts of society.

Banks can now reach customers in remote villages by providing them with a menu of services available on their mobile handsets. In more urban settings, customers can now enjoy new services such as mortgage financing and branchless banking as a result of the growing use of technology. This level of access to financial services was unprecedented just ten years ago.

Introducing new product lines such as mobile banking and mortgage products is pushing banks like ours to become more nimble and technology dependant in order to meet our clients needs more effectively.

Fidelity Bank in Ghana - the Head Office in Accra's Central Business District (credit: Fidelity Bank)

Our new data centre, which is housed in the Bank’s headquarters in the Ghanaian capital of Accra, has been designed with innovative advancements in energy-efficient data center management, business continuity and resiliency, as well as security and disaster recovery services.

We could have simply deployed more servers to handle the increased demand we knew would come from the market. Instead, we invested in an end-to-end solution, housed in a state-of-the-art data centre to build a new secure home for our Big Data needs.

We are confident that this new data centre will enable us to meet the continued growth in the Ghanaian banking sector and also put us in a position to better manage our risk, both critical factors as we push forward our agenda to list on the Ghanaian Stock Exchange.

Technorati Tags: africa, data centre, Financial Services, IBM smarter banking, IBM Smarter Planet, resiliency

Tony Mwai, Country General Manager, IBM East Africa

By Tony Mwai

Ten years ago, if workers in Kenya wanted to send money to relatives across the country, they had two options – either pay a courier to take their wages back to their village or travel themselves, often spending a hefty portion of the wages on bus fare and then losing a day’s pay.

Today, in a just under a second, over 14 million Kenyans can send and receive money to each other in whichever part of the country they are, all thanks to mobile money transfer solutions.

Over the last five years, more than $16 billion has moved between phones in this country, indicating the untapped demand for access to reliable and affordable financial services in the palm of Kenyans. 

With similar stories being replicated across the continent, it is not far-fetched to say that over the last five years, mobile financial solutions have allowed Africa to leapfrog its developmental hurdles to become one of the most advanced adopters of mobile money solutions globally.

Mobile banking has taken off in many African countries, but especially where it can take a significant amount of time and money to get to the nearest bank branch office. Furthermore, the cost of traditional banking in Africa is high for many citizens and banking regulations are strict. For example, many banks require proof of regular income before an account can be opened – preventing many people from obtaining and maintaining bank accounts.

The high growth and penetration rates of mobile telephony inAfricaare transforming cell phones into “mini” banks. Mobile banking is becoming an increasingly affordable and cost effective means of bringing large portions of the population, heretofore excluded, into the financial services market.

According to the World Bank, the vast majority of African families – close to 80 percent – do not have formal bank accounts. Mobile phones, however, are almost everywhere. By some estimates mobile penetration in South Africa alone is at about 90 percent.

In developing countries with a low banking and high mobile phone penetration, mobile wallets can bring basic payment services to those under, as well as un-served, in banking. Mobile banking provides a powerful way to deliver services to citizens who have a cell phone but no bank account – breaking down geographical constraints and offering consumer advantages such as immediacy, security and efficiency.

Often starting with money transfers, mobile banking services become more sophisticated over time to include paying for bills and goods, pre-paid debit cards, ATM withdrawals and salary disbursements.

As mobile banking continues to rise in popularity, financial institutions will have to focus on making the consumer transition from mobile, to branch, to call center, as seamless as possible, which can be a difficult proposition. And with so much competition and no universally-accepted delivery model, how can banks compete for the individual consumer?

For starters, mobile banking technologies that provide a strong return to financial institutions enable businesses to address the security concerns of consumers. New business models are also emerging that address consumer needs, while delivering banking services through mobile money platforms.

Furthermore, partnerships between banks, financial institutions, microfinance institutions and the mobile industry are emerging to support a single integrated framework to cut costs in order to provide consumers with the convenience of banking from home, the farm or other remote areas.

An effective mobile wallet solution can help banks grow and generate new sources of revenue, help merchants reduce payment processing costs and fraud risk, and make the payment process safer, faster and more convenient for consumers.

Customer account information stored directly and securely in the cloud, instead of shared over the phone and passed into the POS terminal, can enhance the level of security as well as reduce the risk of fraud. The cloud-based approach gives consumers peace of mind that their information is private and their transactions are safe. In addition, retailers don’t need to contend with the cost and complexity of maintaining PCI compliance for cloud-based mobile wallet transactions.

As banks are recognizing the potential of reaching millions of prospective new customers, the popularity of mobile banking in Africa could have implications beyond linking the non-banking public to financial networks.

Not only is mobile banking filling the gap in the financial services market, it is enabling a growing number of people to access financial services for the first time, enlivening the entrepreneurial spirit to drive economic growth throughout the continent.

Technorati Tags: africa, IBM, mobile banking, mobile financial services, mobile money, smarter banking, smarter computing, Smarter Planet

By Ron van Kemenade, CIO ING Bank Netherlands

Who said banking was boring?

Let me explain first … before you conclude that banking is indeed boring. Banking is typically regarded as a low involvement product, a boring product. Based on some interesting research, however, we discovered that people actually have a lot of emotions and feelings when banking.

We recently asked and observed retail and business customers about our products and service – what they liked and disliked. It was part of a joint project with our Marketing team to study customer human emotions such as anger, boredom and surprise to see what affect if any they had on the ING brand.

Here’s what we found.

With routine banking, our research shows that customers feel bored and safe and have minimal emotional reaction. With complex banking products, more extreme emotions such as fear, hope and nervousness play a role. With complex banking products, customers feel emotions and feelings about fear and hope.

It may not come as a surprise to most that emotions play a significant role, but from a banker’s perspective, it was a great insight. The research clearly showed that we needed to pay more attention to the customer experience. In a very short time we had a banking crisis, and now we are dealing with the Euro crisis. So it’s understandable that customers today are insecure about their financial future.

Within ING, we had always focused IT on creating more efficiency and effectiveness. When dealing with other people’s money, we can’t afford any mistakes in our processes. Dealing or developing products was mostly about solving a problem from a technical standpoint.

The past few years have taught us that efficiency in customer interactions is not enough. To become the preferred bank for customers, we have to build a relationship of trust by delivering excellent products at a fair price and mitigating negative emotions surrounding personal finance. We’re now building a culture where we solve problems from a customer’s perspective vs. just from a technical standpoint.

I’m very enthusiastic about the possibilities that current technology will give us in the coming years, and this will only improve. CMOs and CIOs together must forge a shared agenda to drive marketing innovation, blending the art of marketing with the science of technology. As a CIO today, for instance, it’s important to consider how technology affects all departments in addition to managing traditional IT management responsibilities. Success for ING is not only doing things in a more efficient and effective way. It’s also taking into account the emotions when dealing with our bank and putting technology to work in creating great customer experiences.

On Tuesday, September 4^th at 1 p.m. ET/7 p.m. CET, Ron van Kemenade, CIO ING Bank Netherlands and Yuchun Lee , vice president and general manager for IBM’s Enterprise Marketing Management Group will participate in a twitter chat about how Smarter Commerce plays a role at ING, what it takes to market to the digital customer, and the why it’s so important for the CMO and CIO to forge a solid relationship. To join the conversation follow the hashtag #GetRealChat or follow  @INGnl_Ron and Yuchun Lee and  @IBMSmrtCommerce.

Technorati Tags: banking, IBM, ING, marketing, Netherlands

Coming from IBM Research, I think of innovation in two dimensions.  First, there is the continuous innovation that goes into IBM’s products and services.  This innovation provides important advances to current technology as well as helps IBM introduce breakthrough products.  The benefits of this approach are clear in IBM’s next-generation computing platform PureSystems.

But we also look for more exploratory challenges that help us advance science by leaps and bounds.  We call them grand challenges.  Meeting them requires a very different set of practices and capabilities – and presents some interesting problems.

And that was the topic today as the Information Technology and Innovation Foundation in Washington, DC hosted a forum with the White House’s Office of Science and Technology Policy, IBM and Qualcomm to discuss how we can meet the next Grand Challenges.

So, what makes a grand challenge?  It must be difficult, inspiring and risky.  These are scientific game-changers by nature – with broad implications for industry and society alike.  Some call them ‘moon shots.’

And as the Apollo program of the 1960′s proved, grand challenges often demand new, cross-discipline thinking and rich models of collaboration among various institutions.

Creating a computer that could compete against human chess champions was a grand challenge. Since the late 1960’s popular wisdom suggested it would be impossible for a computer to ever beat a human grand chess master.   The Deep Blue computer’s winning match against Gary Kasparov in 1997 was a landmark in showing that we understood computing technology enough to take on the task – one we thought was restricted to human intelligence.

The late 1990’s saw a grand challenge of another kind.  In 1997, the Japanese government announced plans to build the world’s most powerful supercomputer – the ‘Earth Simulator.’ In 1999, IBM announced plans to build a new class of high performance computing system that would be even more powerful. BlueGene would go on to, among many other things, crack the complex problem of protein folding.The project represented a deep collaboration between IBM, the Department of Energy and the agency’s National Nuclear Security Administration – in a shared mission to apply the new technology at extreme scales in a highly energy-efficient manner.  And in 2004, it would become the world’s most powerful supercomputer.

Our newest grand challenge is of course the IBM Watson computer.  In the mid-2000′s it had become increasingly clear that deep search and deep analytics were becoming a challenge for commercial computers. Watson was developed to tackle question/answer problems on the largest of scales – and it famously showcased that capability in its Jeopardy! victory.

We continue to pursue this challenge today, extending Watson’s capabilities to industry, medicine and science.  This requires deep collaboration with domain experts like Citi and the Memorial Sloan-Kettering Cancer Center.

These models of collaboration are quickly becoming the standard for tackling today’s grand challenges.  This is why we work closely with our partners as well as encourage our own researchers to work across disciplines.  These are the things that produce the big breakthroughs – and are the blueprint for addressing the grand challenges of tomorrow.

IBM created a culture that embraces the idea of tackling the most difficult challenges. It’s been a priority for us no matter the business environment, so when necessary, we made the tough choices that allowed us to continue investing in the future.

By working together, with both private and public entities to drive research and innovation, we will continue to tackle the world’s largest problems, transforming society and making the world work better.

Technorati Tags: IBM, Information Technology and Innovation Foundation, Qualcomm, White House Office of Science and Technology Policy

I think we can all agree that internet banking has proved itself to be a BIG thing! And yet, banks seem to be way off the pace in terms of quality of service and functionality provided to corporate and business customers online. In fact, I would say that internet banking for business is in a ten year time warp. It feels similar to where retail banks were back in 2000 – when they were still trying to understand what customers would do online and figure out if they could make money from that new-fangled ‘inter-web’.

It’s strange, really. These are the business accounts that are worth hundreds of millions – you would think banks would be lavishing money on them. However, business and corporate banking has remained a largely person to person relationship business. Internet banking has been a hygiene factor rather than a differentiator. This is especially as, by and large, it is small business people or junior finance clerks who most regularly use online services.
But I think this is all about to change – and for a few good reasons (and this list is not exhaustive):

Banks are waking up to the fact they can save money:

• The cost of a person to person service is growing. As relationship managers have to care for larger and larger portfolios of customers, banks will have to beef up their online offerings to compensate

• Collaborative working tools will give banks the ability to work more efficiently with clients – which will save banks money and save customers time. For example, web-chat built in to internet banking will allow banks to share information with customers in real time – answering questions in one touch.

It is becoming apparent that internet banking can differentiate service and  deepen relationships:

• Banks will be able to provide new functionality as a value add – particularly for top end users. By adding quality reporting functionality to online services and making it accessible via mobile / tablet devices, banks can deepen relationships with CFOs

• By offering broader ranges of functionality and more user friendly processes, banks will be able to help their business clients to save time and cut costs – particularly important in the current environment

Customer expectations have grown:

• Online customer experience leaders like Apple and Amazon – as well as retail internet banks – have raised the bar. Customers are already becoming frustrated that they cannot do the things they expect to be standard.

I recently co-authored a white paper on the future of internet banking for businesses – spanning both the corporate and SME markets.  As part of that process, I spent time reviewing all the major business internet banks and talking to users – both small business owners and corporate users. This conclusively confirmed that users want a better service.

Users want banks to get the basics right – which many do not do today. Users want their internet bank to provide a decent user interface – with simple to follow processes, a convenient log in process and proper multi-signature functionality. SME customers want access to a greater range of functionality. Corporate customers want more configurability – and to be able to fulfil their foreign exchange and money market transactions for themselves. However to truly differentiate themselves, I think banks need to look to the future – to the services that customers don’t even know that they need yet – or that banks are too scared to offer (online corporate lending anyone?). As all the banks bring their online services up to the standard of retail banks, that is where I think the true differentiation will lie.

So internet banking for business is in a ten year time warp – but it is starting to fast forward. There are clear areas for immediate improvement (banks need to get the basics right) – but differentiation will be achieved through innovation. Banks need to move now, before they get left behind by their competitors and their customers.

Alex is a retail banking and internet / mobile / social media professional with over 10 years experience.

Alex joined Lloyds TSB in 2000. During his time at Lloyds, Alex worked in both product teams and distribution. In his first permanent role, he managed a customer service call centre team of 100 people. He went on to work in Lean Sigma for Personal Lending and strategy for General Insurance. He also held roles in Telephony and Branch Network Operations.

Over the last few years, Alex specialised in internet and mobile banking. He started as a change programme manager and then moved into product management. In his last role at Lloyds, Alex was the product owner for Loans and Mortgages across the Lloyds TSB, Halifax and Bank of Scotland internet banks – the largest internet bank in Europe.

Since joining IBM, Alex has held implementation roles with UK online banking clients. He has also consulted on Retail, Corporate and Business internet & mobile banking and social media with European and Asian financial services clients.

Technorati Tags: alex bray, banking, banks, mobile, retail