The issue of liquidity management for banks was for many years relatively minor. Regulators and bankers relied on outdated procedures, monthly liquidity reports, and ignored the deterioration of asset quality and risk concentrations that were unsupportable in the long run. Regulations, on an international scale (but with a variety of national twists) are being enacted and the effects are already being felt across banks worldwide. The shift in the speed, granularity and scrutiny expected of liquidity management will bring about deep changes in the payment industry. Payment IT vendors that can support these changes will enjoy a noteworthy advantage

This Research Note focuses on TowerGroup’s analysis of the overall noncash payment trends found in the 2010 Federal Reserve Payments Study and their implications for FSIs and technology providers. This study was the fourth in a series of triennial studies conducted by the Federal Reserve. The study and its subcomponents, released in December 2010 and April 2011, examined payment volume and value for the following noncash payment vehicles: check, automated clearing house (ACH), online (PIN) and offline (signature)debit card, general-purpose credit card, prepaid cards and emerging payments including bill pay and P2P.

This Research Note summarizes and explores the results of a TowerGroup online survey of transaction banking executives in all regions across the globe. This survey, conducted in July 2011, focused on investment priorities relateding to transaction banking technology and processes for both regional and /or global businesses. It captures high-level organizational technology priorities for the next 2 years in transaction banking (including delivery channels, back-office systems, risk management applications to support cash/treasury management, and trade finance).

Increased demand for new services, restrictions on fees, added compliance costs, and a low interest rate environment are impacting bank profits. Although large US banks are implementing new checking account fees, community banks have maintained their free account policy.

TowerGroup believes it is critical for community banks to implement checking fees both to restore profitability and avoid backlash from new customers. This ViewPoint highlights the need for community banks to implement fees on checking accounts and discusses how these fees can be implemented while minimizing customer attrition.

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.

The property and casualty (P&C) insurance industry has always struggled with the acquisition of accurate data to properly underwrite policy submissions and settle claims. Inadequacies in this area lead to inaccurate pricing, poor decisions, and protracted service times. This TowerGroup Research Note will provide insurers with a taxonomy of third party information resources and a map of how to extract the most business value from an explosion of information elements.

This TowerGroup ViewPoint explains how gift cards transformed from an unreliable, fee intensive product into a leading form of stored value. The ViewPoint looks forward and explains how the product will help accelerate the electronification of cash as e-gifting becomes socialized and mobile payments take hold in the United States.

The management of data in financial services is a perennial challenge. Acquiring the data is expensive, and the quality of the data is often uncertain. In 2011 alone, financial institutions will incur expenditures in excess of $15 billion on data and data management. At the same time, data drives every trading and investment decision, is transmitted along the service chain, and is the root cause of many risk and liability mitigation challenges for both the sender and receiver of data. This research note demonstrates how to prepare for transformative changes in the data management space over the next three to five years by investing in six pillars of innovation in data management.

The retail loan securitization funding model is broken, and resulted in the lowest consumer loan origination and securitization volumes in North America in 10 years. Although credit card and automobile loan securitization markets are functioning, residential mortgage markets in the US are stagnant because the securitization market remains in crisis. Conversely, European Union new loan origination volume has declined only slightly from its 2007 peak.

The top two investment priorities for wealth managers focus on the advisor desktop as they shift their focus from a product to a client-experience-driven model. To meet client demands and remain productive, advisors need an effective desktop solution supporting better system integration that drives productivity, firm and held away aggregation and customization. Successful technology vendors will design offerings to integrate with other desktop component providers to better assist wealth management firms in building a best-in-breed desktop.