Online banking is at a crossroads. Early technical and marketing challenges have been met. Unlike 15 years ago, no one is asking whether financial institutions can deliver the online services consumers want. Now, industry leaders, strategists, venture capitalists and government officials believe immediacy and mobility are the issues that may constrain the industry's growth.

Synthesizing these concerns, four key industry initiatives are needed to achieve success with the next generation of online financial services: moving to free authentication; seamlessly integrating delivery channels and content; assuring adequate online capacity; and using data responsibly.

• Authentication continues to be a serious impediment to the growth of online financial services. This is mostly due to business politics and positioning, not technology. Many technology providers see opportunities to profit from their proprietary market positions.

This includes service gateways (such as telecom, search and e-commerce providers), secure hardware providers (such as handheld devices and chips), critical data repositories (such as financial institutions and payment networks) and others who touch large numbers of online consumers and business. The problem is that no one, especially not the banks, wants to let a competitor — or a business that is a potential competitor — "control" the customer, or potentially exploit their position, by gatekeeping the critical authentication process. The result is gridlock. There has been no real advancement in authentication for 10 years.

There are three ways out of this mess.

First, stop focusing industry authentication on the consumer alone. The larger need for authentication is in the backend, with processes that are shared by multiple providers. Authentication should be enhanced in the backend between third parties, where it's more vulnerable yet easier to develop as you move into cloud computing.

Second, providers of first-time consumer authentication should make it free to the consumer and the entire online community. Moving forward, there are profitable opportunities in providing related value-added services. That's where the focus should be instead of trying to make a few mills on every transaction.

Third, the federal government should set an authentication standard for its services and procurement, which would help move the private sector into a common standard. With these initiatives, there is hope that the industry can break the current gridlock.

• Integration of services and content is essential to the next generation of online banking. Customers expect consistent information and services across delivery channels. If a customer responds to an actionable message on his or her mobile device, how does a provider ensure integrity and consistency of data across other channels — branches, call centers, ATMs, PCs, or other interactive devices and application widgets? No single financial provider can possibly keep up with all the new and imagined financial services of the future. Better integration of third-party applications is therefore essential to a seamless consumer experience. 

• With the geometric explosion of broadband services, the industry is at risk of inadequate capacity. The problems some cell phone providers have had in delivering services is a harbinger. The mushrooming demands of wireless, mobile devices could well hinder robust services. Online financial service providers should begin to rethink the architecture of their applications. Cloud computing is effectively today's data center. It is outsourcing on steroids and holds the promise of greater security, mitigated downtime risks, lower capital investment and reduced operating costs. But while the trend will be to centralize data center-processing in the network, the financial services industry should look to more "on board" processing in user devices.

On the public policy side, the financial services industry needs to abandon support of net neutrality. If the key transport backbone providers can't make a profit with differentiated access, the entire system will slow. It's a recipe for huge capacity bottlenecks in the future.

• Privacy is a double-edged sword. Users don't want personal information shared without their permission. At the same time, consumers are increasingly looking for financial providers to solve, if not anticipate, their problems. Indeed, for many consumers, the line between annoying advertising and useful information boils down to how well the advertising is targeted. As greater integration and ubiquity drive online services, opportunities to mine data are appealing to both consumers and their financial services providers. This collision of goals can only be solved through consumer choice — primarily opt-in. Giving the consumer dynamic choices — right at the point of interaction, even in real time — may be the mantra of responsible and profitable use of data.

As Michael Nelson, a Georgetown professor, has said, the future of the internet may be shaped more by standards and business practices than by law and regulation.