Part two in a series

Banks are in no hurry to upgrade their enterprises to Windows 8, Microsoft’s (MSFT) radically redesigned operating system for desktop, laptop and tablet that became widely available to consumers and businesses last week.

Windows 8 has many new features, including a touch-screen user interface and a Start screen filled with "live tiles" that stream information from third parties, such as business metrics at a glance.
 
Despite the overhaul of Windows, a reticence to upgrade is typical of banks and businesses. There are three main reasons for it: Some banks have only recently finished upgrading to Windows 7; they are bogged down by legacy technology issues; and financial institutions are waiting to see how the market responds to the new software and hardware, including app development.

“[In the short term], there’s not a whole lot of incentive, especially if they are just getting over the hump of training users on Windows 7,” David Albertazzi, a senior analyst with Aite Group LLC, tells BTN.

Huntington Bancshares (HBAN) is one bank coming from that camp.

“We’re just now putting Windows 7 on [our] desktops,” Huntington's Chief Digital Officer Jeff Dennes tells BTN.
 
Plus, though Dennes says he reads and hears many comments about “the new era of Microsoft,” he says only time will tell whether that’s actually true. “I’m [of] much more of a wait and see [philosophy],” says Dennes.
 
A Michigan-based bank is another institution in no hurry to upgrade to Windows 8.
 
“I think we’re in the same boat as a lot of banks, [and are] waiting on legacy software compatibility issues before diving into Windows 8,” said John Schulte, senior vice present and CIO at Mercantile Bank of Michigan, in an email. The Grand Rapids, Mich.-based bank’s deployment of Windows 8 is on indefinite hold, Schulte says.
 
An industry trade group believes Mercantile Bank and Huntington will be in good company as they wait to upgrade.
 
“The migration path for business is frankly a slow process,” says Doug Johnson, vice president and senior advisor of risk management at the American Bankers Association. Johnson points out that the trade association just recently finished its migration to Windows 7 from Windows XP as personal evidence of how the business population will come slower to Windows 8.
 
Tablet Tale 
Yet pioneers such as ING Direct in Canada are undertaking some Windows 8 pilot projects. The institution is looking at how Microsoft’s new tablets might benefit employee activity.
 
The Microsoft tablets, called Surface, hit the market along with Windows 8 last Friday. However, Surface is currently only available with Windows RT, which means only new Windows 8 apps will run on the hardware. Surface tablets that can run Windows 8 Pro are expected to arrive in January.
 
As the hardware enters the market, banks and vendors are evaluating how that may benefit their operations.
 
“Today at our bank, like many other organizations, people are bringing in their tablet devices and want to use them for corporate functions,” says ING Direct in Canada’s Chief Information Officer Charaka Kithulegoda, adding that his bank finds secure and reliable ways to let them, while respecting the organization’s assets. “I think Windows 8, if it lives up to promises, will give us an option to not issue a laptop and tablet.”

Beyond that potential cost savings from using a consolidated platform, if the technology runs as promoted, employee users would have a consistent experience across various form factors, not to mention gain an added security layer for their tablets.
 
Indeed, Colin Kerr, industry solutions director of banking at Microsoft, says the same enterprise security requirements banks set for their PCs and laptops can also be applied to Windows 8 tablet devices. For example, an organization can control which Windows 8 apps can be used in the enterprise environment; plus, if a bank employee loses a Windows 8 tablet, corporate IT can wipe the data remotely.
 
To date, the tablet pilot at ING has been small, which means the bank has to wait to see whether the technology's intent can be met.
 
No matter what the bank chooses to do after it finishes up its tests, Kithulegoda says ING Direct will continue to respect its bring-your-own-device policy. Translation: employees can still use their iPads.
 
Beyond ING Direct in Canada, the idea of equipping business staff with Windows 8 tablets is something catching the attention of a few vendors and trade analysts, largely because doing so would potentially allow employees to switch from desktop to tablet more seamlessly.
 
“There’s a great use case for tablets within the branch and outside [of it],” says Aite’s Albertazzi. When a loan officer goes out in the field to get a signature to open up a line of credit for a commercial customer, an employee could leverage a Windows 8 tablet to push data to its back office as a way to better service the corporate client simply because many banks' back offices run off of Windows, says Albertazzi.
 
Meanwhile, execs from Harland Financial Services, a company that is readying Windows 8 apps for bank customers using its Cavion product line, which includes internet and mobile banking solutions, among others, also see potential benefits for banks using the tablets internally.
 
Say a banker decides a customer’s conversation concerning an account opening is better suited for a meeting room rather than a teller line. The employee could pick up a tablet to finish the process for the customer, says Scott Hansen, executive vice president of business development. The bonus from using a Microsoft tablet? The Surface would know where the user left off intuitively since Windows 8 is designed for multiple form factors – if everything works smoothly that is.
 
“From retail banking and wealth management to insurance and small business banking, Windows 8 provides a comprehensive platform to connect with customers, build loyalty and extend the value of existing IT investments by integrating with core systems and existing Windows 7 applications,” wrote Microsoft’s Kerr in an email to BTN.
 
Again, Surface running on Windows RT can’t support legacy Windows applications but Surface with Windows 8 Pro will.
 
But despite the potential advantages, no one is expecting banks to to adopt Windows 8 overnight.
 
“[Banks] migrate to new systems as [they] need to replace them or a specific situation requires new hardware,” Hansen says. “It will happen over time but adoption is different in business than consumer.”