Bankers on the River Charles: BAI Retail Delivery 2009

Quintin Sykes

November 9, 2009

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With apologies to The Standells, sing along with your humble correspondent.
“Dirty Water,” anyone?

Yeah, down by the river
Down by the bankers on the river Charles (aw, that’s what’s happenin’ baby)
That’s where you’ll find me
Along with vendors, techies, and VPs (aw, but they’re cool people)
Well I love that dirty water
Oh, Boston, you’re my home (oh, you’re the Number One place)

“Change the World” was the theme of this year’s show, and why not with the upheaval so far and more change to come? How are banks and credit unions responding to change? How will they next year? On the subject, Richard Davis, CEO of U.S. Bancorp, reminded those in attendance that they may not remember where they were in 2009, but they’ll remember whether they were “leading or being led.” I had hopes of walking away with some world-changing ideas. I walked away wondering why there weren’t more of them in Beantown.

The Scene
2-for-1 deals and other attendance-boosting promotions failed to draw large crowds to this year’s conference, making it smaller than last year. I didn’t see official attendance numbers, but I estimated 1,200 registered attendees with a quick scan of the roster – lop about one-third off of that when you back out vendors, analysts and media that signed up to attend. Some high-profile vendors were conspicuous in their absence, with NCR and Diebold missing from the Expo floor. A noticeable number of vendors downsized their presence into the minimum sized booth. An astute vendor observed that shrinking the denominator wasn’t exactly the way they wanted to see the attendee-to-vendor ratio improve.
Attendees were cautiously optimistic about the 2010 environment, at least as it relates to their institutions. Given everyone who was missing due to travel lockdown, project elimination, etc., I can’t help but conclude my sample set was biased in favor of the healthy. Vendors were more upbeat than I expected about business, reporting activity during the latter half of this year from existing clients and prospects is markedly better than earlier. Green shoots, anyone?

Boston nightlife after Yankees win World Series

November travel protip: Boston’s not in much of a party mood on nights when the Yankees win the World Series.

Keynotes and Breakout Sessions
Consumers, legislators, and regulators are all painting with broad brushes, as the industry suffers from serious image issues after numerous missteps. With that in mind, the CEO roundtable theme was “Rebuilding the Trust.” Part of this felt like a self-help session, with Bharat Masrani, CEO of TD Bank, channeling a Stuart Smalley by reminding the audience that banking is a “noble profession” and that bankers should be proud. Steve Bartlett, CEO of the Financial Services Roundtable, laid out the industry’s response to the challenges of rebuilding trust:

• allow the existing regulatory regime to enforce consumer protections instead of creating a new agency;
• reduce systemic risk;
• increase skin in the game for securitizers; and
• teach financial education in schools.

Much of the CEO Roundtable was consumed with discussion around the tremendous amount of regulation likely to be approved in the coming months (and thanks to Jack Welch for the priceless “bankers, the government will be in your knickers for a long time” quote in his keynote). I’m glad I wasn’t doing shots every time someone mentioned “unintended consequences,” as that would have resulted in unpleasant unintended consequences for me. The industry should be careful with this meme, as it’s a fine line between being perceived as caring for customers and getting tagged as the engineers of the Fearmonger Express. I do agree with U.S. Bancorp’s Davis: “Decisions are being made that will impact a generation. I don’t make decisions when I’m tired.” Unfortunately for the industry, the populists in Congress aren’t tired – they’re energized.

Ram Charan talked through key leadership principles from his latest book on Tuesday night. I liked his idea to have staff members regularly present and discuss examples of successful change in other industries in staff meetings. Pretty dry and pretty generic, otherwise.

In the breakout sessions, Scott Post, SVP of delivery of Hanscom Federal Credit Union, put on a clinic for credit union convenience. With just 14 branches, they’ve amassed a mind-blowing 80,000 surcharge-free ATMs and 6,000 service centers their members can utilize thanks to ATM network and shared branching arrangements. 24/7 service in the call center including round-the-clock follow-up on loan applications augments their physical presence. While TD Bank paints itself as “America’s Most Convenient Bank,” Hanscom made its case for the title on the credit union side of the house.

FIS’ new Reality Distortion Chamber

The Problem
I could see obvious frustration in vendor booths as folks came to pick up trinkets for their kids or register for promotions but not stay for a product demo. Compounding matters for vendors, the #1 response in my informal poll on what attendees were looking for was along the lines of “nothing in particular” or ”just looking around.”

The items that were highest on shopping lists included mobile banking and online account opening and funding along with teller capture. Interestingly, CRM and its various derivatives were cited by a number of banks and credit unions as something on the list for next year. Attendees looking for these solutions shouldn’t have been disappointed with a variety of vendors present. But, like last year, I had a hard time finding anything that knocked my socks off.

Flagrant Sponsorship Foul Award
The lengthy Metavante promo at the beginning of the Colin Powell speech in 2008 was replaced with an even more egregious, thinly veiled Cisco ad in the middle of this year’s CEO roundtable. Can I have those 10 minutes of my life back?

Most Forgettable Name for a Vendor with a Cool Offering Award
WorkLight was on the floor with their widget-based banking offering. Want your customers to be able to view account information on My Yahoo, iGoogle, or Facebook? Check. Still need mobile banking? Check. Need it deployed either on-site or via ASP? Check. Now change your name so we can remember it!

Cool, Redux Awards
We saw Econiq on the floor two years ago with its CRM-in-a-frame approach that eliminates toggling between teller/sales and CRM tools. I haven’t run into the platform in a client yet but the company is now reporting a couple of live deployments under its belt and an implementation approach that’s built for speed.

My colleague Terence gave a shout-out to Saylent in 2006 regarding its offering that helps institutions leverage debit card transaction data. This year Saylent was showing off a nifty relationship rewards management solution, interfacing with core solutions to bring entire customer relationships into a program, automatically generating transactions to set interest rates, waive service charges, etc.

Fiserv toasts the Fidelity/Metavante deal closing

Crowd-Pleaser Award
Some of the biggest crowds I saw were drawn by Bob Garner, who was working the Fiserv booth wowing attendees with creepily accurate mind-reading. Actually, it would be creepier if he bottled up his skill and started selling it to sales reps. 

‘Now Hiring’ Award
Associated Bank CIO Mark Quinlan has had his team hopping, with core and ancillary system conversions galore the past two years and a few more system implementations to come. 2009 staffing is up 25% in his I.T. group with 15% more planned in 2010! Maybe Brett Favre can come back as a developer if things don’t work out in Minnesota.

Protip: Don’t plant before you travel

My FarmVille Crop Suffered for You Award
FarmVille crop jockeys know it’s tough to harvest when you’ve got a life commitments.  This is the sacrifice I made for you, loyal reader. Weep gently for my wilted grapes (the brown patch in the picture).

Boring Might be Good for Banks, but it’s Bad for Conferences
TD Bank’s Masrani said banking was headed “back to boring” during the CEO roundtable. Was this year’s conference front-running that trend? My Gonzo colleague Steve Williams observed it isn’t BAI’s fault that the industry’s been a bit short on ideas. At Cornerstone, our team believes there are several trends that have the potential to create new BHAGs and energy in our industry such as:

• Building models that “put teeth” into the trusted advisor role, from recruitment, development, systems, accountabilities and incentives. The “give them a free checking account and throw them a cooler” model is dead, and there’s a lot of work to do on building retail financial 2.0.
• Leveraging the Web, mobility, social media et al. to drive financial services through real-time collaboration, both inside and outside the organization.
• Questioning the tired approaches to risk management that mostly regurgitated regulation and completely missed the systemic risks that build in our industry and balance sheets. We need effective and efficient Enterprise Risk Management in the future.
• Finding ways to leverage existing customer relationships to avoid getting outflanked in the payments space. There has to be some better vehicle for banks and credit unions below the Top 5 to aggregate their voice and negotiate more effectively in the coming slicing-up of the mobile and micro payments pie.

The idea drought may be making this show just too easy to skip, send fewer people to, or attend every other year. With more tightly focused conferences around payments, alternative delivery and retail banking strategy/best practices tugging away on the same group of potential attendees and vendors with limited budgets, what can organizers do to turn the tide?

An improving economy will certainly help, but in the absence of that, what needs to happen in 2010?

1. Focus on consistent session quality. If attendance is going to remain down, shrink the number of tracks and breakout sessions. Sponsors have a vested interest in a great breakout session, but what else can be done to vet content in advance so the audience departs with key takeaways they can use? I love a good case study – how do we get more passionate, successful leaders to volunteer to tell their institution’s story?
2. Continue evolving the vendor mix. The floor was lighter on anything touching currency than it historically has been, and frankly I didn’t miss it. Retail leaders are looking to play catch-up on online account open and fund, mobile banking and teller capture. They’re staring high-dollar ATM/debit, Internet banking and bill pay contract renewals in the face and want to know their options. They want an answer to their manual reporting/dashboarding nightmares, and they want to make it easier for their folks to sell. These solutions were available on the floor but the more, the merrier.
3. Expand keynote speaker range. The leadership guru/CEO song’s been sung. Gore was the exception to the rule this year. Give me a higher percentage of out-of-the-box speakers to get us thinking with our “right brains” (to quote Davis), so we can find ways to “change the world” with different culture, different products and different ways of collaborating with and engaging customers. There’s a reason BAI President and CEO Debbie Bianucci opened the conference with a mention of Bob Geldof – his 2007 keynote was a special moment for all in attendance. And by the way, keynotes via video aren’t the greatest.

If predictions made by presenters at the show come to pass, we’re in for another wild ride next year. A much larger (and much more expensive) compliance burden, revenue loss from NSF/OD legislation, revenue loss from signature debit interchange income (either from migration to PIN and other alternatives or legislation), and an uncertain economy are all distinct possibilities. There was focus on checking and fees in breakouts this year (a good thing), and I hope next year in Vegas we’ll hear about some concrete ways that leaders evolved their product sets and their efficiency to fill the net income bucket back up to whatever the “new normal” is going to be. Keep hanging tough and I’ll see you on the Expo floor next October.
-Q

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