Panning the main room of the recent CEB TowerGroup Conference in London I observed somewhat of a paradox in the financial services industry. Executives embracing the technological hurdles ahead of them and collaborating via social media through their journey.  Forecasting the future of the industry and having the tenacity to partake in those innovations was not only the theme of this year’s presentations. It seemed to be an active undertaking of most attendees. Read More »

In 2012, the customer remains a major focus for insurance carriers, and has significant influence on carriers’ technology initiatives. In addition to web self-service, consumer computing has become pervasive, and consumers have the absolute expectation that their choice of personal technology access will be accepted by service providers. This drive for self-service will force carriers to evaluate billing capabilities enterprise-wide. Billing is a guaranteed point of customer contact in the lifetime of an insurance policy, and contact happens frequently. Customer satisfaction and loyalty will be achieved by those carriers that invest in billing technology that accommodates customers’ service channel of choice, including the mobile channel. Read More »

Wealth management firms place CRM at the top of their initiatives based on our 2011 CRM survey of wealth managers and their technology providers. Our recent estimates put the annual growth rate of CRM spending at 5% annually from 2011- 2015 as firms look to upgrade existing CRM applications to improve advisor productivity.  We expect: Read More »

Integration and analytics are the key short term focus areas for commercial loan origination over the next few years. Large banks are hesitant to invest in new technologies, such as cloud, keeping spending growth steady until 2015. Read More »

P & C Claims adjusting is a complex business.  Many transactions are routine and derive little value from human intervention.  However, when a claim is complex, even the most seasoned adjuster needs support in handling all the moving parts. Having a modern claims administration system has transitioned from “nice to have” to mandatory. Consumer and distributor requirements for information and business response in near real-time as well as self-service cannot be ignored. Due to the extraordinary amount of data emanating from claims processing, technology is required for fraud detection, litigation management, and regulatory compliance, to mention just a few business tasks. Read More »

Within Retail Banking, TowerGroup defines Branch Sales and Services software as those technologies that analyze customer transaction data, assess the potential for new services or products, as well as open new accounts and provide account documentation. Our Branch Sales and Service Diagnostic Anatomy, will help you understand the key priorities in an investment decision for this technology.  We welcome FSIs to provide feedback on this diagnostic, as well as complete a user survey.   Read More »

Although we recommend that card issuers revitalize their reward programs, we do not think United Airlines is pushing the limits on creativity with this change.  First, unused gift card values have improved significantly.  In 2011, we projected that spillage hit an all-time low of $2 billion, down from a high of $8 billion in 2008.  But, secondly, we believe that card loyalty programs have proven to stimulate card usage and new developments by Bank of America and Chase prove to the market that there are much better ways to spawn volume.  Successful programs range from rewarding the customer for their business across the enterprise.   In cards, that means retail banking, student loans, mortgages and auto finance. In travel, that means linking air, hotel, car rentals, etc.  Aligning “kickers” with business alliances is key; in cards, fuel partners and retailers; in travel, products and services. Read More »

Whatever the ancient Mayans or Hollywood say, our  confidence level on 2012 not heralding the end of civilization is pretty high. That does not mean we are expecting calmer seas ahead; in the last year, the S&P 500 moved more than tt 2% on 68 trading days, a quarter of the total! For comparison, during the height of the bull run from 2004 to 2006, the average number of such high-volatility days was 2.7 per year. The resulting combination of economic uncertainty and risk aversion explains the highest equity risk premium seen in decades, and the highest level of outflow from U.S. stock funds since 2008. Read More »

From 2011 to 2012, global spending is forecasted to increased steadily for modernization purposes and to set the foundations for cost reductions in 2015 and moving forward. Spending growth will be driven by the integration of legacy systems, modernization of manual or out-of-date systems and outsourcing. From 2011 to 2014 Financial Services’ spending in developed countries is expected to be primarily related to upgrading or replacing existing systems. The Asia-Pacific market is estimated to have the largest spending growth, with roughly US$300 million (4.4%). Read More »

Our position on EMV, the smart chip standard for payment cards, continues to focus on the practical fact that US payment networks send every transaction to their authorization systems unlike most countries that use minimum thresholds, often set at $200 or higher.   The differentiating factor is the reliability and efficiency of voice and data lines in the United States.  With US fraud at record low levels of five basis points, the math simply does not support a change in more than 600 million cards and 8 million acceptance points. We consistently maintain that interoperability and the move towards digitalizing the end-to-end flow of a transaction are sufficient drivers for implementation; the promises of fraud improvements are shallow, particularly since the 25-year-old technology does not address the challenge of card not present and internet fraud. Read More »