With Three Months Left to Score Some Big Sales, Will Bank Tech Vendors Have a Banner 2007?

Implications: I don’t think so. And here are the reasons

Analysis:  • Before 2007 even had a chance to show its strength I wrote an article titled, “This is a Pretty Dull Time for Bank Technology.” I was hoping to generate some objections, disagreements, differences of opinion or even insults. I didn’t get a whimper. Instead, I received a note from the Editor of Computerworld saying a reporter’s story and my blog must have crossed in Cyberspace because the idea was the same. She called the industry “dull and boring.”
• I’m not a visionary, but I’ve been looking on the horizon for new technologies and can’t find any. Bank tech vendors, like retailers, automakers, and McDonald’s just to name a few, thrive on new stuff to sell. The only things bank tech vendors are selling today are technologies that the stragglers are now waking up to. For example, is there still a bank that doesn’t offer its commercial customers remote capture? Or check imaging and electronic clearing? Or Internet banking including bill payment?
• Recent new technologies have indeed improved processing methods for banks. In turn, the new technologies provided economies for the banks. What nobody seemed to notice is that these new efficiencies forced vendors to reduce their charges to a bank because the work that vendors performed the old way has declined. It’s not something likely to appear in any vendor’s press release, but corporate revenue gains occur when every invoice generated by a vendor is larger than last month’s. Invoices to existing customers are shrinking, or at least, they should be.
• There’s some heavy duty spending going on in large banks, as expected. But I haven’t seen a single press release announcing a new core system sale to a large bank. The press releases are about de novos and the mom-and-pop-shop banks located in the boonies. For vendors who are now playing at the five to six billion dollar “tables”, selling anything to a tiny bank is like playing the 25¢ slots. Why am I thinking of this famous movie quote, “Show me the money, Jerry?”

I hope I’m wrong about this. I like good news as much as the next guy. I just haven’t seen much from the vendors who normally love to tell about their successes. We'll find out a couple of months after the books are closed on December 31st.