Archive for the ‘Banking’ Category

HSBC IT takes wind out of vendors sails.

Tuesday, November 27th, 2007

Friend or foe?  Ask any enterprise software vendor where HSBC sits on the Buy vs Build spectrum and the answer will be as firmly towards build as any enterprise you might encounter.  In that sense, if they are never going to buy your product, I guess they are a foe.  On the other hand, if you work in the business in HSBC, I suspect you may hold a different view, at least according to a case study published in UK journal, Computer Weekly of today’s date.  The study tells how HSBC has restructured its IT division and its relationship with the business.

Richard Dunlop, chief operating officer of HSBC’s technology services group in Europe is the architect behind the changes which started in 2004 and were clearly driven by the “competitive threat posed by external service providers such as outsourcing suppliers”.  Dunlop said “we were not getting the economies of scale that we should have from employing 2,000 developers in the UK”.

But before the cynics amongst you leap to the conclusion that this was just some artifice aimed at simply reducing costs at any cost, it seems there is more to the story.  The threat of external service providers also alerted HSBC IT to the need to service their own business colleagues.  They appointed relationship managers as single points of contact so their sole focus was on managing “the account”.  That put them in a position to “work in partnership with the business by proactively providing it with information that it can use to drive costs down and improve the bottom line”.

Hang on a minute, isn’t this the sort of language and behaviour normally adopted by the very external vendors HSBC IT are competing against?  To win business, external suppliers need to offer more than an in-house IT function can offer – better price, better product, better service, better relationship and you bet they need to look after their own costs too.

So it seems that HSBC are successfully competing against external suppliers by playing them at their own game.  This appears to be good practice and judging by the number of technology driven customer service innovations launched recently, I can only assume that the business is happy too.

If you followed the hyperlinks above, the alert amongst you will have picked up that some of the announcements were actually HSBC in partnership with an external vendor which only goes to show that there is no such thing as black and white when it comes to Buy vs Build.  But if, as an internal IT department, you want to maintain control over your own destiny, acting like an external supplier is probably a good weapon.

Contactless payments

Thursday, September 27th, 2007

I don’t know why I have such an interest in this topic but having just read this Finextra report I am still pining for a leap forward in contactless payment technology.  Or not so much a leap forward in technology, as a bit of joined up thinking and collaboration.

I don’t want a VISA key fob, a payment card or a calculator with proximity technology.  I don’t want anything new to carry round.  Quite the reverse, I would like to greatly reduce all the crap in my pockets, so please my I have my contactless payment technology installed in my mobile phone?

If we are really in a so-called technological revolution, why do I still need a wallet, or a key ring for that matter?

Banking on process improvement

Friday, September 7th, 2007

It is becoming ever apparent that Financial Services companies, and in particular banks, in the UK are adopting process improvement methodologies from the manufacturing sector.

One bank that I know well, specifically refers to its back office as “the factory”.  I was at another bank last week meeting the Director of Business Process Re-engineering (BPR).  The very appointment of this title at such a high level is an indication of the importance of process excellence in the financial sector.

Just about every UK bank I am aware of has some capability based around Lean/Six Sigma or similar flavour and many of the recruits are coming from manufacturing, retail, and other service companies.

There are big gains to be made since (although the banks wouldn’t like to admit it) they are horribly inefficient.  A further concern is the cost/income ratio.  Most senior executives have some target set around this ratio.  Major investments in technology can take years to pay back.  This increases costs in the short term and brings any benefits way down the line, which adversely affects the cost/income ratio in the short term.  Call me cynical but most senior execs will have moved on by that point, so they will not see the benefits in their bonus payments.  So there is a degree of short-termism and BPR fits the bill because it is about making low cost investments in continuous improvement.

I would argue that this actually benefits both the short and the long term, and you have certainly heard me argue before in favour of incremental rather than big bang projects for a whole range of reasons.

So it is clear to see why they are doing it.  What about how?


Another (tiny) step towards electronic wallets

Thursday, August 30th, 2007

My dream of using my mobile phone to replace all the useless tangible items in my wallet (like cash, credit cards, debit cards, memberships cards, receipts, loyalty cards etc) is clearly some way off, in the UK at least.

Royal Bank of Scotland is the latest UK bank to offer a contactless payment card.  But targeting 12 McDonald restaurants in London by October as being capable of taking the payment?  Exactly what use is that?

Come on UK banks – we need more ambition here.  The technology is surely available to jump the next 14 tiny steps and take one giant leap into the 21st century by enabling us to use our mobile phones as wallets?

Maybe APACS needs to get together with the mobile phone manufacturers and create some standards?  Or maybe we need to think more widely.  Is this a job for Monitise?  I suppose Monitise are too payments focussed, so to get loyalty/membership cards in the mix perhaps Nectar need to get involved too?

Or maybe there is a new business venture here – perhaps a spin-off from a major tech company, a mobile phone manufacture or even a forward thinking bank?

Surely the rest of the world is miles ahead of the UK here – can anyone enlighten me?

Lloyds TSB keeps on offshoring

Thursday, August 9th, 2007

I may have to rethink my last post about UK banks not being evil, after reading that Lloyds TSB subsidiary, C & G (formerly Cheltenham & Gloucester Building Society), is shifting 210 IT jobs to offshore centres.

Lloyds has a history of progressively off-shoring IT, call centre, and back office jobs to India, so one can only presume that they know what they are doing and understand the full impact of off-shoring.

I just hope they are doing it for the right reasons and not just to save cost.

What frustrates me most is that we have the means to be so much more efficient in our own country without having to ship jobs to distant, remote locations. Perhaps the problem is one of misguided management, and management turnover, combined with pressures to report results in ever shorter cycles.  If I was a middle manager in a bank, and was targeted with short term cost savings, knowing that in two years I will be in a different job, so my third year measures won’t count against me, then I guess I would take a short term view too.

UK Banks are not as evil as you might think

Tuesday, August 7th, 2007

When you work in an industry as highly regulated as financial services (and I have worked there both directly, and indirectly) you come to expect the odd scandal.  Pensions mis-selling, current account charges, ATM usage fees are just a handful of the recent uproars from financial services customers in the UK.

The latest decent sized revolt has been over “unfair” bank charges imposed on customers whose accounts have gone beyond their borrowing limits.

There is a danger of victimless crime syndrome here.  People who say “the Government should pay for our rubbish to be recycled” conveniently ignoring the fact that the Government is funded by us, the taxpayers.  People who make bogus insurance claims believing that “the insurance company has loads of cash and can afford it”, conveniently ignoring the fact that if everyone took that view, then the insurance industry would implode, meanwhile the do-gooders suffer ever increasing premiums.


The future of payments in London?

Thursday, July 12th, 2007

Had to laugh at this announcement from Barclaycard.

The three in one “OnePulse”card:

1.  Chip and PIN card – your regular debit card
2.  Contactless payment card (but only in participating retailers and only in London)
3.  Oyster card (contactless travelcard for the London Underground)

Barclaycard call this “the future of payments in London” which really falls short in ambition for me.

Why can’t I import all that functionality (and more) onto my mobile phone so I don’t need a card at all?  That sounds like the future of global payments.

However, despite this derisory post, I must admit that I will be applying for one, as it does look like the best we’ve got in the UK right now, and at least it means my Oyster Card can go in the bin.  That is, unless Barclaycard have read this and terminate me as a customer! 🙂

The Wallet of the Future

Friday, May 4th, 2007

I was reading this article about Barclaycard and Oyster preparing for the launch of the small payments card in the UK (in fact only in London).

Although, as a Barclays customer, and Oyster Card holder, this will mean one less card for my wallet, its only a tiny, rather limp step in the direction of the contactless payments of the future.