Somewhere over the technology rainbow, there once was a place where new and "innovative" technologies were to help banks cut costs and increase profits. But now, some banks are starting to re-evaluate their investments in technology. Ideas that once seemed promising haven't paid off, and banks have begun ditching some services."Anything lacking a defined return on investment is being watched closely," says David Furlonger, vice president of research and director of the financial services group at the Stamford, CT-based Gartner Group. There's still a strong market for technology in the financial arena but vendors will have to sell on the basis of need and practicality rather than on pie-in-the-sky proposals.Furlonger say there has been a "marked slowdown across the board" in bank IT spending. In a few recent developments, Bank One Corp., Citibank and American Express Corp. each announced they would be discontinuing products. Chicago-based Bank One clipped its Wingspan Internet Bank, saying it "eliminates the substantial expense of supporting another brand." The two-year-old Wingspan will be melded into the bank's own Website.Paul Jamieson, director of banking and payment services at Gomez, says investments such as Wingspan, "cost a bank too much up front, and consumers don't adopt quickly enough to leverage the expense." Jamieson, referring to Citibank's stand-alone Internet bank, CitiFI, which was shutdown and eventually rolled into a single Citi Internet bank, says: "The product was not a failure. It ended up creating an excellent overall online banking product for Citi." And Citibank will discontinue another technology. As of Sept. 3, it will no longer offer its customers electronic bill payment at its ATM machines. Mark Rogers, a Citibank representative, says the New York-based bank cut the bill payment service because it was rarely utilized. "Our customers haven't expressed that this service is a need," says Rogers. In place of the bill payment option at the ATM, Citi will be adding new features, but Rogers declined to say what they might be. And it's not just banks ditching technology ideas. American Express couldn't find a market for its electronic wallet and said last month it would be pulling the plug on it because it never functioned smoothly. E-wallets, a technology that stores consumer information in a supposedly more secure method for online shopping, have never really been embraced by Internet shoppers. Jamieson has been following e-wallets for several years and says the quality of the product is not really in question. "This is not a 'build it and they will come' type of product," he says. "Banks need to simplify their Websites and let customers know exactly what products they have to offer."
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