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Top 5 Financial Services Technology Trends – March 2014

Trying to stay ahead of the curve when it comes to IT issues is a challenging task. Emerging technology forces in the financial services industry are already impacting business. The convergence of these forces does present challenges; however, it also provides a window of opportunity for financial institutions to elevate business performance and gain a competitive advantage. Perficient provides a monthly perspective on some of the most talked about IT issues and emerging trends to help industry professionals identify and rationalize their IT investments.

Digital Innovation Through Acquisition

Banking leaders are focused on exploring new technology and business models needed to evolve. The pace at which digital and mobile is directly impacting how consumers engage with brands making the delivery of banking services, digitally, both a challenge and an opportunity. There have been several key non-bank mobile and fintech acquisitions the past few months and we suspect that this will continue as a trend in the industry as others seek to grow their market share.     

Cloud Banking

Garter has forecasted that, by 2016, poor return on equity will drive more than 60% of banks worldwide to process the majority of their transactions in the cloud. The explosion of digital banking and the complexities it has introduced for banks is forcing many to look for ways to simplify their IT environments. Banks also continue to operate in silos and struggle with building a comprehensive view of the customer needed to engage and personalize the banking experience. While there’s no “one-size-fits-all” solution, cloud computing can help banks overcome data challenges, get a 360 degree view of the customer and gain a competitive advantage. 

‘Connected Banking’ 

The use of APIs and integration to diversify and advance product offerings is the future of financial services. Innovators at some of the well-established financial institutions are extending access to banking services for developers and partners in today’s digital economy to deliver new products and services in the marketplace, personalize experiences, add new mobile services and protect people’s privacy through authentication.


Compliance a Top Tech Investment

Regulatory change continues to be an unavoidable expense and a top priority this year for financial institutions. Many banks like JP Morgan will make significant investments to improve controls, systems and processes for AML, KYC and client onboarding which will derisk the company and boost operational efficiency. When it comes to technology investments to address regulatory compliance, it’s critical to choose a solution that can quickly adapt to changing requirements.

Social Listening & Analytics

Social networks have become the place where consumers engage with brands, make purchasing decisions, ask for help, and publicly share both positive and negative experiences with products and services. Although a lot of financial institutions are on social media and have adopted strategies and policies for social media, not all are leveraging the unstructured data to help gain a complete view of their ‘socially engaged’ customers. Although banks and credit unions face a number of unique regulatory, legal, privacy, security and compliance issues, they are no excuse for financial marketers to shy away from social channels.

Anyone for zero commission trades?

That is what Robinhood is promising. Will this turn traditional online stockbroking on it’s head? Time will tell, but it’s worth a look. TechCruch has this covered in a recent article. Some fun facts from the article and personal experience are:

  • Anyone for Zero Commission Trades?It doesn’t actually cost a brokerage much money to place a trade. Yet customers are charged anywhere from $7 to $30 dollars per trade depending where in the world you are. CommSec in Australia offers trades at AUD $19.99 compared with Bell Direct at AUD $10. Scottrade in the US offers $7 trades. Interestingly Loyal3 also offers free trades, but is more restrictive to consumer brands.
  • Robinhood started out as an iPhone app for tracking stocks, but has since transformed into broker-dealer. Potentially making it the worlds first zero-commission stock broker.
  • Zero-commission trading could bring a new generation of young investors into the stock market.
  • Potential for charging for API access. so other app developers can leverage the platform.

Robinhood has an interesting promotional video. And if you think the actor looks familiar, you’re right he is the star of another startup we have mentioned before. I wonder what the connection between the two firms is, if any?



Posted in News

Perficient Acquires ForwardThink Group – Expands FS Practice

Today we announced the acquisition of ForwardThink Group, a consulting firm specializing in financial services industry services and solutions.

ForwardThink Group brings meaningful expertise in compliance and risk management, business intelligence and master data management, and business process management across the banking, wealth management, asset management, capital markets and insurance sub-verticals. They have a solid client roster that includes some of the top financial institutions in the world, and have a strong presence in New York, a major hub for financial services organizations.

We believe there is substantial opportunity in the financial services industry. With the addition of ForwardThink Group Perficient expands its financial services industry vertical and enhances the team’s expertise in delivering information technology services and solutions to our financial services clients. This is especially relevant during a time when the financial services industry is highly regulated and becoming increasingly complex. Firms are challenged with navigating government regulations, managing rising customer expectations, integrating emerging technologies to modernize current platforms, and driving operational efficiencies. In combining the two firms, Perficient is better positioned to help clients address these industry challenges.

It’s an exciting time at Perficient. We remain committed to our financial services clients and team. Our practice is strong and continues to grow each and every day. We will continue to improve our offerings and integrate ForwardThink Group’s expertise and client work seamlessly. And I’m proud to say we’re on our way to establishing Perficient as one of the premier financial services consulting firms in North America.

You can learn more about Perficient’s acquisition of ForwardThink Group in our news release here.

Please join me in welcoming the ForwardThink Group team to Perficient.


Posted in News

Bankers Get a Compliance Wake-up Call with Data Breach

10-key pad showing wearWhile most of the mass media news about Target’s card data breach has focused on the direct effects on consumers, the forensics of the breach are starting to trickle out through specialists like Brian Krebs, and they’re really fascinating. At the highest level, it appears the attackers seem to have been able to enter the network via a third-party vendors’ network and establish a command-and-control server inside Target’s network. Further speculation is that the c-and-c server was installed using an administrative user account for monitoring software that may have had an installation-default password set. Surely Target didn’t set out to neglect the PCI Control Objectives for network monitoring and security, but the gaps revealed are large enough for millions of records to fall through.

Are we insulated from this kind of attack in the financial services sector? Absolutely not. Our networks once consisted of devices under our physical control, such as branch terminals and ATMs. Today the edges of our networks reach into the very pockets of our customers through browsers and mobile apps. We interact not only with processors, but other third party networks and vendors.

As the available attack surface expands, our networks become a more lucrative target. The PCI Control Objectives provide the framework for protecting our data and our customers records, but both operations and information security have to be actively involved daily in understanding that there’s a difference between merely being compliant, and actually securing our networks. Armchair quarterbacking only goes so far, and in our industry we’d be well served to quickly take stock of how to fortify our compliance efforts against increasingly sophisticated attackers.

Where are networks truly isolated and do we truly know where data is coming from and going to? Are we taking physical security for granted? Where might there be opportunity for social engineering? Are all MD5 hashes for application updates being validated each time? Are we white-listing those things that should be active in our servers?

If the reports are true, the Target breach has cost U.S. banks more than $172 million in re-issued cards. Whether we’re ready to acknowledge it or not, financial services’ networks are closer than ever to retailer’s, and we owe it to ourselves to think that a compliance certification means we’re doing all we can to secure ourselves. The data breach is a chance for banks and retailers to work together. Whether it’s the card industry migrating to EMV chip-and-PIN cards, tokenization, or better systems monitoring, both parties have a vested interest in consumer fraud protection.

IBM Connect Features TD Ameritrade’s Social Business

There’s been a lot of buzz on Twitter this week around IBM Connect. The Perficient IBMers and Portals, Web Content and Social team are in attendance at IBM Connect and actively blogging about some of the sessions highlights at the show. One of the biggest stories out of the financial services and banking industry there has been the TD Ameritrade and IBM presentation on how they became a social business despite industry regulations and compliance issues. TD Ameritrade used IBM Connections as their social business platform. Read the full post here.  TD Ameritrade

We saw several examples of social enterprise technology in the banking and financial services industry from State Street implementing NewsGator and  Suncorp Bank deploying Yammer in 2013.  We knew social business platforms were getting a lot of attention in the technology world, but I think the financial services industry has lagged with adoption as many organizations fear the perceived risks and challenges to get beyond compliance.

Why Become a Social Business?

In a report from July 2013, Forrester reported that 60% of IT decision-makers consider collaboration a high or critical priority. I’m sure many Banking CIOs have it on their radar and are building use cases for the benefits of implementing a platform to: provide a more integrated and networked workforce, focus on customer value, and competitive advantage through social business.

Social Business

Where To Start with Social Business?

With the recent final guidelines issued by the FFIEC on risk management and the use of social media for financial institutions managing expectations and associated risks is important and there’s a lot to consider. So where do you start?

Most larger banks already have social media policies in place, but as social media use becomes pervasive  in financial services not only to communicate with customers, but internally to collaborate with other lines of business, organizations need to be prepared to manage these processes and workflows through the use of technology.

  • Assess the capabilities and impact of social business and collaboration with a business strategy with systems of engagement.
  • Bring Risk and Compliance groups to the table and leverage monitoring tools for compliance.
  • Alight social business technology with core banking activities.
  • Maximize value with integrated tools across functions (i.e. marketing and social, document collaboration, compliance).
  • Educate the workforce and adopt social business as a company-wide initiative for maximum business impact.

To learn more about best practices for becoming a social business in financial services, read the full post about TD Ameritrade from our expert Mark Polly in our Portals, Content and Social practice.

Coin: The Credit Card that Eliminates all Others

Brian O’Donnell, Senior Technical Consultant at Perficient, recently wrote a blog about Coin, the new all-in-one digital credit card that was recently announced.

What is Coin?  Coin is a brilliant new technology that allows users to consolidate all of their cards into a single Coin card.  A Coin card is not your traditional credit card.  It is an electronic device the size of a credit card with a programmable magnetic strip.  Any card with a magnetic strip whether that be a debit/credit card, gift card or preferred customer card, can be put on your Coin card.

To red Brian’s full blog post, click here.

Perficient’s Top 5 Fintech Posts of 2013

A lot has happened in the banking and financial services world this year. From the debates over a potential digital wallet revolution to the proliferation of mobile devices and big data – there was a lot to discuss! Here’s a look back at five of our top posts covering financial services technology trends and challenges. top-5-288x300

Banking Technology Trends You Can’t Ignore in 2013 – Mike Panzarella

Was your organization successful at executing on it’s 2013 banking strategies? Take a look back at Perficient’s predictions and rate your business’s performance in each of these areas.

What Tablet Growth Means for Your 2013 Banking Services Strategy – Abbey Smalley

The rate at which tablets and phones are being sold is staggering. People are moving to this new generation of architecture very quickly. With that must come a whole new generation of apps and functions. How has the tablet trend impacted your bank’s development strategy?

Systems of Engagement are Key Enablers for Omnibanking – Elizabeth Dias

To take the omni-channel experience to the next level in financial services, organizations must create ‘systems of engagement’ and maximize value at every customer touchpoint to create that seamless experience.

6 Key Payment Strategies for Success – Elizabeth Dias

The mobile payments space is experiencing unprecedented growth as consumers continue to seek better ways to shop, make payments and manage their money. A shift towards having an app-driven mindset has forced industry leaders to adopt more innovative practices to improve engagement and strengthen customer ties with payment strategies. Look ahead to 2014 with these 6 key payment strategies for success.

The Great Debate: The Future of the Bank BranchAndrew Bolt

The ongoing debate of what the future bank branch will look like (if one will even exist by 2020) is interesting. Perficient weighs in on the subject with two points of view (one from the financial institution and the other as a consumer). What do you think the future of banking will look like?

Will Banking CMO and CIO Collaboration Be Critical in 2014?

CMSWire and a peer from our Portals and Social Business practice both shared a pretty cool infographic from Gartner that illustrates the need for CMO and CIO collaboration to define an organization’s digital direction. I thought I’d put it into context though for the financial services industry with a brief post.

The topic of customer engagement will continue to be front and center in the financial services industry and marketing will be leading these priority objectives in 2014. To accomplish these goals, enterprise technologies like Customer Experience Platforms (CXP) and marketing automation tools will be critical to deliver more personalized banking experiences across channels and devices. But this is only one example of how the digital marketing landscape has evolved over the past few years. Gartner’s graphic really speaks to the complexity of and need to understand the inherent relationships between business functions, applications and technologies that exist today. There have been a lot of articles published as of late talking about how CMOs will be spending more on IT than CIOs. It is hard to disagree with this point of view as you examine this diagram.


2014 CMO Planning Initiatives

Here’s just a taste of what Banking CMOs will be faced with managing in 2014:

  • Evolving strategies for Social and Emerging Technologies
  • Executing on Marketing, Web and Customer Analytics strategies
  • Managing the connection to Sales, Service and Commerce
  • Maintaining Web and Content systems
  • Integrating CRM systems and Enterprise Marketing Management tools for campaign management and cross-channel marketing

I really could go on and on…

The bottom line is this – the role of the CMO has changed as marketing departments now rely heavily on technology to do their jobs and continue to drive growth for a financial institution. CMOs that can embrace this challenge and collaborate with IT, be agents of change, and build digital strategies to reach and engage the customer will set the bar for others to follow. If banks are being forced to take an “outside-in” approach to understanding and serving their customers, doesn’t it make sense to have the CMO lead customer-driven business and technology decisions?

Exploring Social Connectivity in Retail Banking

A Perficient colleague in our Portals and Social practice, Brendon Jones, posted a blog yesterday, “Re-energizing the retail banking experience” which talked about the shift in retail banking towards the use of social technologies to deliver value in mobile services for money management. As the McKinsey Quarterly source he mentioned referenced, social networks have become mainstream with consumers. With that, the pace of social technology adoption by companies has started to accelerate. Non-banks like Moven and Simple, as well as a number of European service providers have launched more “socially integrated” mobile banking applications in the past few years. However, most of these products (and the financial services industry as a whole) have only scratched the surface with building functionality into the customer experience to engage with customers and pinpoint the ROI of mobile banking.


Goals of Social Technologies in Financial Services

A number of people in banking I talk to have shared some of their top strategic priorities for next year. At the top of everyone’s list is retooling, reinventing and re-energizing the customer experience in financial service.  We’re seeing financial institutions start to innovate in new ways towards “connected banking” solutions and social features that:

  • explore the omni-channel banking model
  • deliver more personalized experiences and customer service
  • measure customer sentiment
  • optimize cross-channel marketing and sales goals
  • encourage collaboration and enterprise productivity
  • reduce friction in customer relationships
  • differentiate the bank from the competition

Social selling and bringing the account opening process to a social network allows a bank to be at the center of a customer’s money management decisions. A great success story comes from Navy Federal Credit Union. Another area where social can be integrated is mobile personal finance management (PFM) with the help of gamification. Moven integrates their MoneyPath application with a customer’s Facebook timeline for greater financial awareness. The goal of ‘Facebook banking’ is to be a part of the personal dialogues customers have with features like P2P social payments, share financial goals, and provide the added convenience to access account information (i.e. ING Direct ). It will be interesting to see if we see more U.S. banks integrate the social channel in the near future. The possibilities for re-energizing the retail banking experience are endless as banks bring together portals, web content management (WCM) technologies, mobile, and social collaboration tools for multiple purposes.

Social’s Impact on Internal Collaboration

Organizations can use tools like Yammer to socialize content internally, communicate more easily with peers, and more quickly get answers to questions from others. Just imagine, by using a social platform and portal solution financial marketers could share the vast amounts of content produced on a daily basis without having to move to external channels. According to the McKinsey survey, the potential benefit from improved productivity (as a percentage of revenue) is highest in retail banking. The survey also showed that retail banking ranked 3rd as an industry to benefit in the area of collaboration.

I personally feel like there is so much room for growth in banking to make social a part of an omni-channel banking strategy by adding “utility” to a mobile or web experience. Whether Facebook will stand the test of time as a long-term platform I don’t know. However, I feel there are elements of social that allow companies to connect via a platform to engage with customers and will help banks re-imagine the future of banking. Internally, financial institutions can benefit greatly from implementing social platforms to improve productivity, encourage collaboration and communication, and bring down the data and personnel silos that exist in today’s banking world. As these walls come down and data vaults are opened, enterprise technologies for Enterprise Marketing Management (EMM) will extend value in CRM solutions, enable new digital marketing capabilities, and fuel the customer experience that will truly re-energize the retail banking experience.

Credit Cards: Recent Trends Show Demand for Value-add

It is mid-November and the holiday season is almost upon us. With the Thanksgiving holiday only a week away, my mailbox is already starting to fill up with store catalogs, coupons, and flyers for Black Friday shopping deals. There is also one other thing I am increasingly seeing in my mailbox of late – credit card balance transfer offers. As many of us in the industry know, credit card exposure and profitability cycles can change within quarters when underlying fundamentals change either in the economy, regulation or risk tolerance. I chose this topic for my first post to explore the credit card industry trends I expect to see develop in 2014.

With the economy slowly but steadily improving, banks are once again ramping up lending through credit cards, especially through balance transfer offers. Consumers will continue to take advantage of these offers for debt consolidation, lowering their interest rates, and to also enjoy special offers such as limited time zero percent APRs and other incentives for opening a new account. With banks loosening their credit decision rules, the power to pick and choose the right type of credit card is firmly shifting back into the hands of the consumer. Credit card balances rose by $4 billion in the third quarter of 2013 as stated by the Federal Reserve Bank of New York in its latest report on household debt.


Holiday Lending Success with Analytics

With consumers receiving more targeted offers thanks to better big data and customer analytic models, banks need to compete fiercely to offer added incentives to attract new credit card customers and provide differentiated service to retain existing customers. All of this points to the need for banks to closely analyze customer needs and behavior in order to accurately determine what customers really expect and want from their credit cards and understand what would cause customers to consider switching to a competitor. Banks need to continue to leverage the massive amounts of credit card transaction data they currently possess for analyzing spending patterns and also enhance that data with social listening data to create effective rewards and loyalty programs that are individualized and relevant to each customer segment.

Consumer Expectations in Apps and Services

The vast majority of consumers carry multiple credit cards with an average number over 5 cards per capita and this trend will remain intact going forward. Since rewards programs frequently vary by card issuer, time of year, and merchandise category, consumers are unable to easily track what card would offer the best reward for a specific purchase. The use of mobile apps for tracking loyalty programs and suggesting what card to use for specific purchases (like Wallaby) will continue to grow.

Wallaby app

Since most consumers complete a credit card application online, recent efforts by banks to simplify the application process and provide transparency about terms/fees/rewards to enable applicants to choose the right type of card will continue going forward. Targeted marketing through social media and mobile channels instead of traditional mail will accelerate as banks adapt to a new generation of increasingly tech-savvy customers.

An increasing number of customers are also expecting their credit card statements to not only track transactions but also provide reporting and categorization of spending so they can use the statement as a financial and budgeting tool. As banks try to reign in operating and account servicing costs, the push towards electronic statements will continue with banks offering incentives for customers accepting a completely paperless interaction model.

What other trends will we see from leading lenders this holiday shopping season?