Palms or Eyes for Banking?

Banking capability now seeps into nearly every crevice of technology. The continuum runs from the Legacy systems all the way to the cell phone.

At Comdex/Fall 1999, Sony and other partners announced the plan to do wireless Internet for the Palm V. The Palm operating system is gaining further ground, at the expense of Microsoft CE. The score now for Personal Digital Assistants: Palm Computing, 78% of the market; and CE, 15%. But while CE is somewhat unstable, it carries a broader platform for other development tools. Comdex also debuted IBM's wearable PC with the screen covering one eye. Microsoft's OS resides here.

Now what do the bankers make of this? Pursue every delivery channel? There should be a step back. Consumers could bank with Internet-enabled palms, cells, or eye patches. Which is it? For portable devices, "eye-patch" banking is out. Cell phone LCDs are too tiny. Perhaps the Palm (sans Microsoft) is the ideal size and screen for mobile banking.

Bank Security Guards on the Street?

An unplanned by-product of channel realignment is that fewer bank robberies will occur. ATMs inside the 24-hour supermarkets are safer than isolated brick and mortar ATMs. This is good for consumers.

However, what if digital cash (protected by digital certificates and/or biometric mice) allow the desktop or portable banking device to dispense money and take deposits? This will be feasible very soon. Now you shift the risk, and "banking" robberies will spread. That portable or wireless device evolves into a target for tech-savvy miscreants. Surely, lawsuits will try to put an umbrella around the victim.

Financial transactions and decision-making in a dedicated environment still makes lots of sense, even with the 24x7 lure. The customer can focus on the task at hand, ideal for cross-selling. Research shows heaviest Internet banking usage falls not on weekends but on Mondays, 9 to 11 a.m. When this costs the employer, a cross-sell might not fall on willing eyes and hands.

A New (Old) Way to Get Loyalty

Mutual insurers are finding ways to convert the insured into a shareholder. Employee stock ownership plans garner loyalty to the company. With further deregulation in the industry, should the customer own bank stock as well? In one sense, if the service is poor, the customer will not only close the account but also sell their stock. If the law and the regulators find questionable linkage between loans / deposits and equity ownership, consumer advocates should be outraged. For sure, the consumer will get the protection they require.

The upside is intriguing. A new product could promote bank stock purchases -- one more channel relationship. Customers get earlier notice of a takeover. But you give them a stake and a truer sense of identity with their banker.

The CEO Footnote . . .

Be careful of how much space the Consultants take. No, not the cubicle. IT research consultants to the Bank are able to leverage their know-how to move into e-business. Between the Bank's technology shop (which harvests its own patents) and the technology providers, the line becomes more and more blurred. E-business is now everyone's space. The Bank's IT units are becoming profit centers. CIOs are now possible CEO candidates. So why not offer the end-to-end solution for internal use and for correspondent banks, with no apologies? The street is two-way: Nonbanks do banking, so why not Banks doing more non-banking?

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