Microsoft launched its dramatically different new operating system, Windows 8, in late October. But while the technology world in general paid close attention and gave mostly good reviews of the new system with the iPad-like touchscreen interface, the financial industry took more of a wait-and-see approach to the news.
Windows 8 is a touch-enabled, "reimagined" version of Microsoft's old PC operating system. It introduces a plethora of new features that are easily visible on its homepage. The Start button has been replaced with a Start screen that showcases live tiles that stream information from third parties, such as weather or business metrics. Users can drill down into details from these widgets by using the touch screen. Though Microsoft owns the PC market, it's a latecomer to the tablet and smartphone party. Experts were mutedly optimistic about Microsoft's new slew of offerings. In a blog, Forrester analyst Frank Gillett gave the firm's forecast of Microsoft's market share:
"Windows 8 will simply stop the shrinking, maintaining Microsoft's share at about 30% through 2016. By 2016, we believe that Microsoft will have about 27% of tablet unit sales, but only about 14% of smartphone sales (and some of us are very skeptical they'll even get to 14%)," Gillett wrote. "The result is the CIOs and individuals face a market over the next five years where Microsoft still dominates PCs, Apple's iPad lead the tablet category, and Google's Android leads in smartphone sales."
A few forward-thinking banks and vendors had applications ready or in development for Windows 8 at its debut. Bank of America, the second-largest U.S. bank by assets, was one. "We're developing an app for Windows 8 that will provide another convenient way for our customers to interact with Bank of America," said a BofA spokesperson in a statement emailed to BTN. BofA's app is for PCs and tablets.
USAA is also working on adjusting its digital banking applications to run on Windows 8. "USAA is committed to being there for our members in the channel and platform they choose," wrote USAA in a statement to BTN. "We are working to adapt the affected functions for compatibility with Windows 8 and IE 10 [Internet Explorer 10] and will continue to make adjustments as needed."
ING Direct in Canada, meanwhile, had an app ready for customers to download in the Windows Store on Windows 8 launch day. The Windows Store is Microsoft's download center for Windows 8 apps.
Other banks are taking their time. "In the short term, I see a lot of testing going on and making sure that the user interface will behave correctly so users can perform banking functions," says David Albertazzi, senior analyst with Aite Group LLC.
ING IS ALL IN
ING Direct's new app for the RT tablet (the "lite" version of the Surface tablet that runs only new Windows 8 apps) and Windows 8 for desktop computers lets bank customers check their account transactions and find ATMs, among other actions. The bank also has an app for Microsoft Windows Phone 8.
"It comes down to a fairly nontechnical point: It's all about giving our customers choice," says Charaka Kithulegoda, chief information officer. Customers "use a multitude of different devices. ... From a bank standpoint, we want to give users a compelling native experience on whatever platform they are."
The journey to developing the app was relatively smooth, he says. The user interface was an "interesting" design to get used to. "It's a different paradigm to some of the other touch-based UIs that we are used to, like iOS and Android."
Part of the new look is Windows 8's start screen, which displays a mosaic of icons. The live tiles, as they are called, stream content from third parties to widgets on the home screen.
Though Kithulegoda says he couldn't point to how many current customers use Windows, he says the number of web users remains steady. Translation: Under the assumption that a large percentage of those web users are operating from a Windows-based platform and they upgrade to Windows 8, that's not a small amount.
"A lot of people use Windows as their operating system," Kithulegoda says. "If I just said: 'Consumers, use our website on your tablet device,' it may work in the short term but not the longer term." Why? Consumers are demanding a compelling experience from whatever device they wish to use to do their banking. Plus, consumers want to do their banking quick, without too many clicks required, and securely, which is what the bank keeps in mind when designing for mobile or tablet.
HOLDING OFF ON INTERNAL UPGRADES
For their own offices and employees, banks are in no hurry to upgrade to Windows 8.
There are three main reasons for this: 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," Albertazzi says.
Huntington Bancshares 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. 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.
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.
"Today at our bank, like many other organizations, people are bringing in their tablet devices and want to use them for corporate functions," says 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, executives 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 new Microsoft 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.
But despite the potential advantages, no one is expecting banks 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."
A few vendors to the financial services industry have announced their support for Windows 8.
Harland Financial Solutions has been readying a Windows 8 app for customers of its Cavion internet banking software. The financial services software vendor has worked with Microsoft to rebuild its product to take advantage of the new touch-enabled, tile-based user interface of Windows 8, so that the app looks and acts just like the new operating system.
For the end user of the Windows 8 banking app, it's less about new features and more about a better user experience."It's just more of an intuitive experience," says Harland's Hansen.
A consumer might set up a live tile app for banking that would show him he has 10 new transactions, for example. The consumer may then be able to complete his banking tasks in fewer clicks.
Kony Solutions Inc., a mobile and multi-channel application development platform provider, also announced late October that its KonyOne Platform supports Windows 8. The KonyOne Platform allows enterprises like banks to quickly develop and deploy multi-channel apps. Huntington National Bank is one of Kony's customers.
"Apple has created such an emotional connection," Dipesh Mukerji, senior director of product strategy at Kony Solutions, says. "To compete, Windows has to come out with a great user experience. ...not just for the enterprise, but for [users'] daily lives."
To that end, Mukerji touts four features that showcase how Microsoft is working to do just that, including Windows 8's live tiles, the ability for Windows 8 desktop users to switch back to the classic Windows, the way the operating system is designed for various devices, and the Charms bar, which appears as an overlay panel that allows users to access several important features, including search and sharing. "Is it enough to make people leave [Apple] and come over to this? I think it's completely wait and see," says Mukerji. "It will start [at] the enterprise."
Microsoft's new Windows 8 operating system is out, to mostly good reviews. Banks, however, are taking a slow approach.