What's a January issue without a few predictions? These are some issues we're watching, and betting that bankers will need, or ought, to take action on in 2010.
Risk Management: Before winter ends, President Obama will have the opportunity to cap his "fat-cat bankers" shtick by signing a wide-ranging regulatory reform bill. Chief among the provisions will be a mechanism intended to give regulators a systemic view of risk, and requiring inputs from every bank of any heft. Banks that haven't spent millions on enterprise risk management already, get ready.
Pricing and product design: New regulations likely to be part of said reform will force banks to change retail practices and pricing. After the business sets the new strategy, all aspects of technology operations-from backend to marketing to consumer-facing-will have to execute, and provide electronic evidence that they're doing so. Regulatory burdens with questionable efficacy? Probably. Perhaps also an opportunity for innovation that re-establishes trust with consumers.
Online Banking Security: Attacks on business accounts will continue unabated, as will calls for institutions to indemnify businesses against losses the same way they do consumer accounts. The volume of lawsuits against banks will rise in tandem with the incidents. Banks ought to cover these losses, and evolve their online banking beyond the browser to more secure access.
Data breaches: The industry will likely-finally-get a national data breach notification law with Federal pre-emption of state statutes; this new regulation will seem tame compared to the rest of the new rules coming into play. Still, the number of breaches attributed to the financial industry should decline with the availability of better encryption technologies in the payments ecosystem. Card issuers, associations, processors and merchants need to get on the end-to-end encryption bandwagon.
Mobile Banking: This year will bring respectable rivals to the iPhone in the form of app phones running the Android operating system, but still mobile banking adoption will remain under 20 percent. Banks shouldn't let that stop them from investing in the channel; it'll be table stakes before long.
P2P Payments: Person-to-person payments will move out of beta and into the hands of early adopters. Please, vendors, stop using the "splitting the check" example, that's just not the killer use case.
Healthcare Banking: Healthcare became hot-button last year with Congress tackling reform and budget cuts pushing millions into self-directed healthcare plans. Finally healthcare banking will begin to assume the importance that's been predicted for years. Vendors should embrace messaging standards to simplify end-to-end payments processing for providers and embrace ease of use for consumers.
What's on your agenda in 2010? BTN welcomes feedback and story ideas year round. Happy New Year!
