FutureBanker: As the newly elected CEO, what do you hope to accomplish over the next six months?
Allen: One, foster the growth and development of electronic banking in an open environment. We're going to try (to) provide the banks with open standards and an open environment to be able to deliver on everything from software to access devices to the way that processing takes place.
Our second mandate is to ensure safety and soundness in the payment system. We're going to look at issues like standards in security, privacy guidelines, security encryption guidelines. One of the ways we're going to do that is to develop a meta-architecture of payments (and) suggest minimum and maximum guidelines for how we can ensure a safe and sound system.
Another mandate is to improve the access to banking services by the largest number of people including the unbanked. And as you know, the Federal government has mandated electronic payments by 2000.
We're also looking at an acceptance mark that might be used for servers and payment processors. If you think about today when you see "FDIC," you know that's a guarantee or insurance on deposits. We want to come up with the equivalent for electronic payments and delivery. It may be a certification authority; it may be an acceptance mark certifying how payments take place.
FB: What will be the key challenges in meeting these goals?
Allen: I think the key challenges are really to build consensus in the time frame that we want.
FB: How will BITS build consensus?
Allen: Both technology and business people from (member banks) will be part of ongoing working groups which will address the issues and make recommendations. And from those recommendations, we'll take them to the board. It's the chairmen of the bank holding companies that (make up) the board. We're going to have BITS/industry and BITS/government forums that will (meet) every other month. We'll invite in industry players or government regulators to work with us in refining the issues, giving their input. The message here is we want this to be something that's done with industry participation and government agency participation.
And then a third process is that the BITS board and other CEO forums really make decisions. That's where the real power is-having these chairmen of the banks agree or come to consensus on what we need to do. They certainly have a bias for action and a bias to get things done quite quickly.
FB: Why is that?
Allen: In the future of payments and the future of electronic commerce, the standards, the operating systems, are really the de facto strategies. And which ones we adopt has implications for what technology you use and who the players are. And what we want to do as an industry is be in the forefront of that, defining what the business requirements are for banking.
FB: Many of BITS board members are also members of other consortia like Integrion. How can the board operate impartially?
Allen: There is a concerned interest on the part of every one of the chairmen to make sure that we come up with the right set of standards and specifications for the banking industry. If Integrion meets that, that is terrific. If OFX meets that, that's terrific. We're neither against nor for any one solution right now, until we go through the process.
FB: How objective will the board be with nonbank payments players?
Allen: I think you're going to find them being open-minded. But they are banks what they are concerned about is that banks maintain the control of the security and the soundness of the payments system. If you have nonbanks competing with banks to provide, lets say, stored value and there are requirements on the banks in terms of liability and Reg E and the non-banks don't have to compete with that and the consumer doesn't understand the difference, (then) you have a major problem, which they've had with telephone cards in Florida. They have legislation pending (in Florida) that says only banks can issue stored value. Banks aren't going to go that far, but it's one of the issues. There should be a level playing field.