The ability of banks to better orchestrate their resources in a collaborative manner will become a major determinant of who will win in tomorrow’s industry. Banks are facing growing challenges from new market entrants using uniquely interactive approaches, a marketplace fraught with changing demographics and evolving tastes, and increased customer expectations for human and social interaction as elements of business conduct. All this comes at a time FSIs face growing pressure to not merely cut cost, but to reinvent their operations.

FSIs will aggressively increase expectations from their BPO service providers for more services at lower cost. The pressures created by these expectations will improve the efficacy of outsourcing as innovation and technology are applied to BPO services. However, the realistic rate and level of process improvement and service expansion may be accelerated by expectations from FSIs and limited by the ability of vendors to deliver. It is at this point that both sides of the outsourcing arrangement will benefit from a more open, transparent, and collaborative approach.

The rationalization of products, services, and markets is underway across the banking industry. As large banks seek new ways to improve revenue, manage costs, and target distinct markets, small banks will find new opportunities to grow through acquisition of customers dissatisfied with large bank fees and charges, especially smaller accounts, who are seeking low cost or fee-less basic banking services. Making money on the new wave of smaller accounts will be highly dependent on the ability of small banks to leverage technology. This will open the door for IT vendors to provide leading edge consumer-facing channel and service technologies.

Leading FSIs are pursuing operational changes that will result in greater socialization of the business, better leverage of internal resources, and better experiences for customers. To accomplish this, FSIs need more collaborative work environments using more consumer-like, a broader, and a richer set of communication technologies. The full complement of technologies involved in executing such a strategy is known as UC. As the use of social networking technologies and collaborative work environments increases, FSIs will need to develop a master UC plan.

Near field communication (NFC) is a popular and often mysterious topic in the payments market because of its multiple forms and its ability to extend existing contactless payment technologies. This TowerGroup ViewPoint provides a high-level understanding of NFC and the inherent opportunities and challenges it presents for financial services institutions, which include increasing the existing footprint of participating issuers, and possible disintermediation by other market participants as firms including American Express, AT&T, Discover, Google, MasterCard, PayPal, T-Mobile, Verizon, and Visa vie for a piece of the mobile payments pie.

Globally, the financial services industry will increase spending on outsourcing services and technology at a rate more than twice that of overall IT spending through 2015. Driving the growth are the need to update technology despite tight budgets and deferred investment and vendors' pricing and delivery innovations and expanded domain expertise. This Research Note forecasts spending on outsourcing by the industry through 2015 and examines the forces of change. The report discusses how outsourcing vendors should respond to these forces and how financial services institutions can benefit from competition among vendors to meet rapidly changing business and marketplace expectations.

On June 13, 2011, a Michigan district court ruled that Comerica Bank was liable for fraud losses stemming from a January 2009 phishing attack on its small business client Experi-Metal, Inc. This ruling contradicts the handful of similar case rulings that have favored the defendant banking institution. This TowerGroup ViewPoint addresses the implications of the Michigan court ruling.

Cloud computing is here to stay and rapidly making inroads in the financial services industry, mostly by nibbling at the edges of business operations. The private cloud has become a commonsense option for financial services institutions for leveraging assets, gaining better business control, and diversifying the supply chain for distinctive offerings. Vendors across the IT and service spectrum are adding on-demand services, furthering growth of the phenomenon. Even vendors of installed software are adopting "pay-per-use" options. This Research Note outlines the drivers and projected growth of spending on cloud computing by the global financial services industry through 2015.

The number of US financial services institutions that provide consumers with a mobile banking service has more than doubled over the last year. Financial institutions and vendors of mobile banking technology continue to hone in on consumer preferences and improve their technology, professional services, and support infrastructure in this maturing technology space. This Research Note provides TowerGroup's evaluation of 10 leading consumer mobile banking technology vendors active in US market and North America generally. The evaluation used TowerGroup's vendor/solution review methodology to rate the most critical dimensions of financial institutions' criteria for vendor selection.

Financial services institutions can distinguish themselves in the marketplace using socially enabled communication and collaboration techniques, but revisiting risk management will be essential. This TowerGroup ViewPoint examines the convergence of cloud computing business models with social networking trends and the impact of this emerging "socially enabled" cloud business model on the financial services industry and its technology vendors. TowerGroup suggests that vendors augment their cloud services with operational consulting and thought leadership to help the buying institutions succeed with a cloud business strategy.