The banks that are looking at all the contact points they have with customers, from remote banking to the branch, and are thinking about how they can improve that interaction.

Where should banks focus?...

Stevan Vidich is Microsoft's new industry architect for capital markets, replacing Mark Horvath, who has moved to a similar position in the financial services worldwide group. Vidich spent four years at Integrated Information Systems, ...

If James Carville were running the BAI’s retail delivery show this year, he might post that sign over the entrance. Then again, Carville and BAI would make a rather odd combination, so don’t hold your breath waiting.

“We have to understand the industry and not just try to sell everything we have in our toolkit,” he explained. “We are focused on looking across the R&D initiatives at Microsoft and helping to articulate the value of those initiatives to our industry customers. We have discovered that we can be much more successful showcasing Microsoft's long-range technologies in an industry-relevant context than with broad horizontal stories alone."

“Large companies, whether they are multi-national or regional, have banking and financial accounts all over the globe,” explained Gary Greenwald, managing director of Information Products at Global Transaction Services, a division of Citigroup Corporate and Investment Banking. “They range from Demand Deposit Accounts, to short-term investments, to debt. A major corporation could have thousands of accounts with many, many banks. One of the challenges of almost every treasurer I talk to is visibility into and control of the information and processes around their cash and investments.”

The new system, called Advent Portfolio Exchange (APX), emerged from 24 months of development and extensive testing by several asset managers.

Bryon Gilbert, investment systems administrator for Midwest Trust Company, was the first client to begin work with the beta version of Exchange more than a year ago.

“We saw the raw product,” he said over lunch in New York, in a tone that suggested it was not the prettiest sight ever to cross his computer screen.

William Penney, a director at Advent who was responsible for the project, said Advent developed it over nine months and then shipped it out for beta testing as early as possible.

“We are looking for a way to better measure and quantify where the significant risks are in our organization as it relates to a variety of compliance topics,” said the banker. “We need to look at it from an enterprise basis and respond with an effective management program.”

Successful companies focus not just on providing products that work, but also on developing affinity and loyalty by understanding customers, anticipating their needs and delivering an effective experience.

“I don’t think we are doing anything that is rocket science,” said Davis, the company’s CEO. “This is marketing management 101 – I’m sure at Microsoft they sit in a room everyday to ask how to sell.”

Bank products are pretty much commodities, said Davis, so the question for his organization is how do you get a customer to drive past three of his competitors to do business with Umpqua.

Deposits provide the majority of the profit for the consumer financial services industry. While transaction and savings deposits currently account for only 10 percent of consumer financial assets (down from 16 percent in 1993), they provide 40 percent of revenues and translate to almost two-thirds of total industry profits associated with managing consumers’ assets, based on studies undertaken by the Federal Reserve.

For banks, growing deposits is critical to profitable growth, and for all but the largest – who have invested heavily in a diversified portfolio of revenue sources – is the primary contributor to earnings, accounting for between 81 and 90 percent of total earnings. For these banks, no other fee-based services can salvage an eroding deposit base.

Every night, its application, built on SQL Server and .NET, reviews up to 25 months of customer loan and deposit records hunting for significant departures from a customer’s general practices, such as a $50,000 deposit hitting an account which has never seen more than $5,000 inflows at any one time.

For two years, Pzena used INDATA as a portfolio management and trading tool, explained Keith Komar, Pzena’s director of portfolio administration. Now it uses the full suite, including electronic trading, customer relationship management, and the DTC reporting module. As the firm has grown from $2.9 billion in 2001, it has relied on technology improvements to hold down costs. The firm has approximately 50 employees.

“Trade credit, extending terms for 30 to 90 days, is a way for companies to sell their products and services,” she explained. “That’s fine for big companies, which have ways of accessing capital to do it.” But small companies rarely have easy access to capital, and even when they do it is usually a line of credit meant to be used for emergencies.

Meanwhile, regional banks would like to grow their small business lending.

To bring the pieces together, she has developed Business Pay Connection (BPC), a type of cash management solution banks offer through Adrian’s company, Collaborative Financial Concepts. Running on computers hosted by Savvis, it allows buyers and sellers to collaborate electronically on purchase orders and invoices. When the terms have been agreed to, the parties notify the bank, and the bank transfers the funds to the seller and bills the buyer.world, because we make it easy.”

“The development environment of .NET is absolutely fantastic, and I have been developing software my whole life,” she said. “We owe our ability to do rapid prototyping to .NET. We could sit with a customer and design the software right at the table and have a prototype up and running. .NET is good; it is reliable, and Microsoft has built a lot of features into the software. This is a phenomenal environment to develop in.” Half her development team came from Java background, she added.