According to industry analysts, banks are poised to spend more than $550 million on branch renewal in 2004. Banks are adding new technology to their branches, with plans to significantly enhance operational efficiencies, increase customer satisfaction and capture new revenue-generating opportunities. There are many options out there on thin-client and rich-client infrastructures, and the decision is made all the more daunting when one consider that branch decisions could be a 10- to 20-year investment. All the more reason for banks to take a close look at the pros and cons of each technology and ask themselves how to obtain the best of both worlds. Recent introduction of smart-client technology suggests they can.
Fat-client applications are full-blown applications, residing on the bank's workstation infrastructure, which provide users will full access to the workstation's resources. These fat clients have full control over the user interface, allowing for well-designed UIs to be highly optimized and efficient and reach across the network only for resources that may not be available on the user's workstation, making the applications more impervious to network outages and reducing the load on shared servers.
However, fat-client applications are expensive to deploy and maintain, and often create complex data synchronization issues for a bank's IT staff. These shortcomings have for years motivated the ongoing development and enhancement of thin-client applications -applications that run on a browser, live on a server or farm of servers and require limited client-side processing power.
One of the greatest advantages of thin-client environments is the ability to significantly streamline deployment and costs, since thin-client applications do not have to be rolled out on every workstation. Additionally, incremental changes can be deployed more frequently because they can be deployed centrally. At the same time, thin-client environments have significant shortcomings as well: they severely limit the efficiency of the UI and the level of service delivered to customers; they limit programming control; and their performance and availability are less predictable than fat-client environments, as they rely on servers across the network for most of the resources to get the job done.
For example, any time a UI changes significantly, such as when a user is navigating from screen to screen, a thin client is required to go across the network to the server, which will compute what the next screen should look like; this round trip adds time to teller transactions in an environment where every second and key stroke count. A fat client, on the other hand, creates and renders the UI locally, without dependence on a trip to the server.
So, how can banks tap into the power, performance and availability of fat-client applications, all while reaping the efficiencies and cost-saving benefits of thin-client applications? By embracing smart-client technologies.
Smart Clients Clear Hurdles
Under growing competitive pressures, banks must drive down the costs of their system support, upgrades, maintenance and product rollouts. Within a smart-client environment, banks do not have to deploy applications at each teller workstation manually. Changes to policies, procedures and new product rollouts can be made once at a single location, but will be reflected at all workstations; this administrative shortcut alone can save a bank a substantial sum.
The role of branches is changing. It's all about relationship building-turning tellers into trusted advisors and giving them the tools to handle interactions as efficiently as possible. With smart-client applications, banks gain advantages like real-time screen updates, which minimize waiting time and maximize the opportunity to build customer relationships and cross-sell additional services.
Branch operations are mission-critical. Banks can't afford their teller systems to go down and have a line of customers wrapped around their branch office, waiting for a system to come back up. Smart-client technologies not only enable tellers to continue performing transactions for customers when the server is down, but also automatically communicate the stored data back to the server once it comes back on-line.
Additionally, smart-client environments are a lower risk. To elaborate, true smart clients typically run in a well-defined and well-protected security sandbox and therefore, are less vulnerable to security liabilities. A well-built smart-client application isolates itself from other applications. This isolation enables banks to deploy and run multiple applications from multiple vendors that have differing requirements, and avoid, for example, the hell of the dynamic link library in the Windows world and the Java Virtual Machine version-compatibility problem in the JAVA world.
The Value is Amplified
Smart-client applications provide many advantages-lower total cost of ownership, competitive agility, greater customer service, predictable operations availability and so on. But the value of a smart-client environment is amplified within the context of a multichannel integration strategy, since banks can create, implement and maintain products and processes once, and easily deploy updates across their enterprise.
For example, if a customer approaches a teller requesting a funds transfer, the criteria for transferring funds is in the business logic within the bank's front-office system. Within an integrated channel environment, a bank's IT staff can build criteria logic once in a single location that applies to all desired funds-transfer requests that come into not only the branch, but also via the call center and over the Internet. Additionally, a smart-client teller application enables a bank to easily extend the same funds-transfer rules to off-line teller workstations without rewriting logic at the platform level.
Where to Start?
As a first step in determining whether a smart-client technology strategy is right for a bank, it must simply evaluate what applications are really giving it the most headaches-applications that require frequent updates and changes to business logic and procedures; offline operation; intensive data input with immediate validation; and optimal UI performance. Typically, the answer is that internally facing applications used by banks' employees to perform 70 percent to 80 percent of their daily activities and, most importantly, ensure responsive service to customers. The most obvious applications are deployed on teller workstations.
What are Banks' Options?
From an infrastructure perspective, there are several standards-based approaches emerging and banks, of course, have the option to buy or build. In the JAVA world, there are applications that rely on the JAVA Network Launch Protocol, which allows applications to be distributed and updated easily. These JAVA systems can work on-line or off-line without being proprietary to any vendor.
There are also some upcoming Microsoft-based technologies, such as ClickOnce, based on .NET, and IBM's recently released Workplace Client Technology, as well as Eclipse 3.0 on the Rich Client Platform (RCP), which will enable vendors to build smart applications that provide banks with all the hybrid benefits addressed above. In addition, some providers have already developed standards-based smart-client applications integrated on a common platform to help banks take advantage of the best of the fat- and thin-client worlds.
Capitalizing on Smart Clients
The bottom line is that institutions do not have to solely bank on fat- or thin-client environments anymore and will, before long, be compelled by survival to look beyond these now traditional technologies. Certainly, smart-client environments are the absolute future. But more than that, they're also today-proven, viable hybrids that are delivering the advantages of both fat-client and thin-client environments.
Imad Mouline is CTO of S1 Corp.
