Darren Skanson

2.0 EXTERNAL ENVIRONMENT

Information technology will emerge as a critical competitive weapon over the next five years as banks rely increasingly on new business models rather than new product lines to succeed, according to a global survey of business leaders.

Speed of execution on strategy and innovation was identified as the key management challenge facing Banks over the next five years, and more than four-fifths of respondents said that technology will be critical to the Bank's ability to adapt its business models and implement strategy. Nearly three-fifths said IT is becoming more of a competitive tool, rather than simply a driver of cost efficiency.

To succeed in 2010, Banks will need to adapt faster to changing customer demands. As Banks increasingly focus on their core business, they will be ever more dependent on an integrated network of partners and suppliers to meet customers' requirements of flexibility and convenience.

IT will play a strategic role in helping Banks efficiently and cost-effectively build and swiftly adapt to customer demand. We are entering the next wave of computing where IT is aligned with business and used as a driver of competitive advantage rather than simply a tool to drive down costs.

The survey also indicates that companies will increasingly turn to IT as a competitive tool for better predicting customer behavior. Respondents cited changes in customer needs and behavior as the single most significant challenge to product and service innovation that companies will face over the next five years. Nearly 40 percent said they expect to invest in improved customer relationship management capabilities to help meet that challenge.

Many of the competitive benefits of IT flow from its ability to capture, communicate and analyze information, the survey indicates. Respondents said that between 2005 and 2010, they hoped to see the most improvement in access to the right information at the right time.

Asked to evaluate emerging technologies, the majority of respondents said that new data management, analytical tools and the ability to access them any time anywhere via wireless technology will have the greatest impact on their companies' ability to innovate over the next five years.

Many people have been disappointed in the Bank' wireless network, they expected fast developments when the technology was launched. Historically, it takes an estimated three, four, even five years before a critical mass of 'new technology' users is reached. When the penetration rate was high enough, the volume grew very quickly. Some people expected that wireless banking usage would grow as soon as the networks were on the market. Volume comes when the Banks reach a critical mass of users and more services.

Over recent years, banking and a customer's access to financial services has changed pace beyond the belief of traditional retail banks in Trinidad and Tobago. In just half a century, we went from local branches, to branch networks, to ATM machines, to ATM inter-bank agreements, (INFOLINX) to home banking software, to call centres, to telephone banking and to internet banking. However, perhaps the most recent development for banking customers is the ability to use wireless technology like their mobile phone. This is completed using specialist software on a card inside your phone. With technology changing so rapidly and customers requiring different services, traditional banks have a great deal to do if they are to retain their competitive advantage.

One of the next changes that we will see in the near future is the introduction of 'smart' banking cards. The magnetic strip on banking cards will be replaced by a small chip, which is about the same size as a fingernail. The chip will represent not only a method of identification but also it could store electronic cash, a value that matches coinage but without the weight. One of the main benefits of these new cards is that they can also be read by smart card readers or your mobile phone.

Moreover, banks in Trinidad and Tobago are not just banks anymore. They also sell insurance, loans and help you manage your share portfolio. New products mean extra systems to store customer accounts or to help customer care agents, querying information for you. In fact, to sell to maximum effect, banks need to really know their customers, what products they have, why they have some and not others and what they might like to hear about

One of the most popular pieces of wireless technology around today is the mobile phone. In fact more people in Trinidad and Tobago own a mobile phone than a personal computer. Every major software house, hardware manufacturer and network service provider in the world should not have failed to act upon the realisation that mobile devices are the panacea of thin clients and therefore, the cheapest way to deploy new services from a central system.

The fundamental point here is that everyone in the next few years will have a mobile phone and everyone has a bank account. Customers will want access to all their financial services from anywhere at anytime regardless of who provides the service. In short, linking a portable wireless device such as a mobile and a current account seems to be an obvious way forward. Empowering organisations to deliver the retail outlet into the hands of the customer, is in fact the mission of the future of banking. Most banks know this, but the important point to remember here is how banks use this knowledge to their benefit, as well as to the benefit of the customer. Retailers have used loyalty cards to obtain knowledge about their customers. In turn this has allowed them to offer customers the products that they want.

Mobile Phone Banking Systems of the future will need to have the ability to communicate with customers on all wireless networks, wherever they are and whatever time of day it is. Mobile Phone Banking Systems will also be required to be able to support all types of mobile data as they proliferate e.g. SMS, HSCSD, GPRS, EDGE. Banks must however avoid purchasing multiple middleware platforms, the solution purchased should be multi-channel hence supporting the