Quintin Sykes

I realized after my post on big data last week that I probably needed to take a step backwards and define "big data" in the first place. What are the characteristics of big data?

• At a minimum, it's a big data problem when the size of the data itself is part of the problem (Mike Loukides' definition), with potentially petabytes or exabytes of data to process. Raw transaction data over a long enough period of time can scale to this size.
• Frequently, the structure of the data is part of the problem as well. Unstructured data processes require technologies different from the relational database technologies we've been accustomed to working with in the past. The number of data sources and potential need to infer relationships among them also can come into play. Sentiment analysis leverages unstructured social media commentary, for example.

With Zombie Fever in full swing, I was thinking about technologies in banks and credit unions we just can't seem to kill. Five came to mind this afternoon:

• COBOL: Plenty of software used in financial services is still written in COBOL (and running on mainframes for that matter). The cool kids don't want to learn COBOL these days, so it's getting tougher to find talent to support these legacy applications.

• Internet Explorer 6 : Until recently, it seemed like there was always one vendor that's holding financial services CIOs back from upgrading desktops to a later version of IE (and from Windows XP to Windows 7, for that matter)? Even my financial services blog with 8 readers still gets hits from IE6. What's it going to take to kill this abomination?

• Voice Response Unit: Even in the age of Internet and mobile banking, it's a rare financial institution that's currently thinking about the day they can shut down the voice response unit. Nobody's VRU call volumes are increasing, but volume isn't dropping quickly enough in many places to make a case for retirement.

• DOS: You don't see DOS a whole lot these days, but when you do it's typically on the teller line where DOS-based teller applications are still alive and well (depending on your definition of "well"). With teller volume dropping, the upgrade to a web front-end isn't easy for some to make a business case for, so DOS survives another year ¹...

• PBX: Here's another telephony technology that's tough to kill. Mass-conversion to voice-over-IP (VoIP) telephony for the sake of standardization is tough to justify when the PBX is still depreciating, working fine, and interoperating with other VoIP systems at the Bank. Once these things roll off of the books, all bets are off.

I was thinking about the topic of multiple deposit accounts earlier in the week, and the Bank Simple demo that Fast Company posted yesterday prompted me to post.

Banks used to have a variety of reasons for offering separate savings products (I'll include money market accounts in this bucket) including:

• Ability to offer higher rates in exchange for restrictions on withdrawals
• Lower deposit reserve requirements at the Fed
• No PFM or other equivalent functionality for customers to set aside money for savings goals
• Source of overdraft protection for customers

A couple of days ago the WSJ ran a piece on Visa and MasterCard using cardholders' purchase data to target Internet advertising. Think this data might be valuable? From the article:

The trove of details about people's credit-card activity would be a gold mine, ad executives say, because it illuminates a person's budget, where they shop, what they buy and how they spend their time. "The combination of actual purchase behavior with attitudinal and demographic information provides an unparalleled understanding of the consumer," MasterCard's document says.

2012 planning is in high gear for many financial services organizations, so it's top of mind in my conversations with technology and business unit leaders. Ron Shevlin put up a post earlier in the week that I left a comment on regarding disconnects between the CEO, CIO, and business leaders in a case study. One of my points was that the CIO (or CTO, Director of IT, or whoever the senior IT leader is) is set up to fail if they are essentially the sole owner of project prioritization.

Wow, look what just came in the mail.

Dear Bank Stanky Customer With a Balance Under $10,000,

We appreciate your continued business with Bank Stanky. Like you, we have been impacted by these turbulent times. So that we can maintain our bonuses in the wake of reduced overdraft and debit card fee income and continue to provide you with our signature "Step-Into-Stanky" Service, we have instituted new fees effective November 1, 2011:

By now I could fill a warehouse with the commentary on recent fee moves by large financial institutions and the wisdom surrounding them. Schools of thought include:

• Large banks are clueless, recklessly pursuing additional fee income to fill the hole left by Durbin, overdraft, CARD act, and other fee-limiting legislation; and
• Large banks have an adequately-thought-out plan to make unprofitable relationships at least marginally profitable or run them off

After a busy first three months of getting into the flow with Hitachi Consulting I'm finally ready to start blogging again. If you'll tolerate me stuggling through my first few posts, I hope to coherently share what I'm seeing in the market this year--and what I'd like to see--as it relates to financial services technology.

My list of financial services technology trends, in no particular order, looks like:

I was doing some thinking over the weekend about what I was going to write about in GonzoBanker this week and I keep coming back to alternative delivery. A few questions came to mind that I need to dive into or update my research on in 2011. I thought they might be interesting to those looking at delivery channel planning or investments so I figured I'd put them in a post.

Yesterday I had the opportunity to participate in BarCampBankCharleston. A cross-section of bankers participated, including representation from technology, marketing, branches, and even disaster recovery groups, leading to discussion in many areas. My company, Cornerstone Advisors, was pleased to help sponsor the event along with ECPI who provided the space and ClairMail.