Nick Brewer manages 29 products for SunGard. As vice president of global banking solutions for the firm’s banking business, Brewer has his finger on the pulse of how technology is shaping modern banking. SmartBrief caught up with Brewer at Sibos 2011 and asked for his insight on trends related to tech spending, mobile banking and social media.
What do you think of the way mobile banking is taking shape?
I see it as three separate things. It’s all called mobile banking, but it is actually three different things.
One is the mobile workforce, so getting your loan officers out in the field, helping them not be tied to a desk. And it is even mobile within the branch, having tablet applications so you can walk around and talk to people.
The second one is what I would call additive mobile banking. Broadly, it is for developed markets where everybody has an Internet banking account already, and now they want to do it on their phone.
The third is transformational mobile banking, which is mainly in developing countries. In the unbanked and the marginally banked, people are looking for something such as a payment solution.
Those three tend to get lumped together, and people always talk about the second one as mobile banking, which it is, but it doesn’t represent as big of an opportunity as the third one. The transformational one — the unbanked rates in the U.S. are quite high. It’s not necessarily a Third World pitch.
Many consumers are hesitant to adopt mobile banking out of security fears. Are you hearing any of the same fears coming from banks?
Banks don’t feel constrained by the risk. There are genuine security risks, but it has moved in the last year from being a groundbreaking thing whereby if you wanted to be an inventive bank, you better have a mobile-banking solution, to being if you don’t have one of those, why would anybody join you? It has crossed that threshold.
What are some of the latest ways banks are looking to leverage social media?
Everyone knows that banks are trying to gain customers via social media, but what’s more interesting is whether banks will start using social media the other way around. What we have launched with Ambit MyMoney is an experiment that lets you publish a savings goal to Facebook from your bank. No one else is doing it as far as we know. So suppose you and 10 friends are all planning to go to a sporting event, and you all have to save $1,000 for the trip. You could publish how much you’ve each saved up to Facebook. You can all see one another, and you can see that your pal George has only $100 and the trip is next week. Or someone saving up for a university education could share the goal with his family, and if an aunt or uncle wants to top up the fund, they can.
The idea of publishing not your financial details, not your whole financial planning, but letting people see certain things is one example of pushing data the other way around on social media.
Where do you see banks spending on technology products?
They are going to want to merge a series of things that are separate. You have risk systems that work out the risk and exposure. Some are simple, some are complicated. You have regulatory systems that broadly do the reporting to regulators, but over the last six years since Basel II, those two have begun to merge. There is an idea that how you’re regulated should affect how your risk works — which you would have thought was obvious, but it took the banking industry some 30 years to reach that conclusion.
In the other corner, you’ve got profitability. … If you say the bank is the balance sheet, then what you care about is how the capital of the bank is measured. It is the bringing together of profitability and performance and margin solutions with risk and regulatory solutions. It is a much more internally focused thing to do, but if you look at how regulations drive banks, they are looking inside themselves much more.