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A Free E-Mail Newsletter
Paul Nastu, Editor
Issue 39, Jan. 9, 2002

Questions or Comments?
Email the Editor.
Or, Contact Richmond Events.
 

 

Happy New Year! Hope you enjoy your first issue of
The CIO Forum Financial Services 2002 eletter in 2002. 
As always, please feel free to forward to your colleagues. 
      The Editors


 

  • Digital Insight To Acquire VIFI
  • CRM Spending Stalls
  • Mike Hawley, Emerging Technology Guru, To Speak at Forum
  • Agent Extranet Technology on Rise
  • Eleanor Rolls On
  • EBPP Adoption To Accelerate
     
    Digital Insight To Acquire VIFI
    eFinance enabler Digital Insight Corp. has entered into a definitive agreement to acquire Virtual Financial Services, Inc. (VIFI), a privately owned application service provider for the financial industry based in Indianapolis. Digital Insight expects the acquisition to close in the first quarter of 2002. With more than 425,000 Internet banking active end-users as of December 31, 2001, VIFI currently has more than 150 client financial institutions.
     
    As consideration for the transaction, Digital Insight will pay a combination of Digital Insight common stock, $3.75 million in cash and a promissory note for $3.75 million based on a $51 million total enterprise value.

     
    CRM Spending Stalls
    The financial industry can expect market consolidation among CRM suppliers as financial institutions' spending increases in this field flatten through 2003, Meridien Research predicts. Global retail CRM spending in 2002 will stay essentially level, compared to 2001, at $6.7 billion. 

    No significant expansion is expected until 2004 while financial institutions struggle to master the complexity of channel integration and deal with the cost of building and maintaining an effective, robust data warehouse infrastructure to support a wide variety of analytical decision support applications.

    Corporate CRM spending, influenced mostly by commercial banks, will remain at $3 billion in 2002, and is also not expected to grow significantly until 2004, as many institutions examine their ROI from less-than-successful CRM investments.


     
    Mike Hawley, Emerging Technology Guru, To Speak at Forum
    Few know the emerging technology landscape better than Dr. Mike Hawley. As Alex W. Dreyfoos Professor of Media Technology at the MIT Media Lab, Dr. Hawley is principal investigator of Things that Think, an innovative research program exploring the integration of cutting-edge technology into everyday objects. Dr. Hawley will share his insight at The CIO Forum Financial Services, May 6-9, on board the renowned ocean liner QE2.

    Dr. Hawley has broad digital media experience with companies such as Bell Telephone Laboratories and Lucasfilm Ltd. He developed the world's first library of digital books with Steve Jobs at NeXT, and he's the recipient of the first Jack Kilby prize for innovation in science. He also directs Toys of Tomorrow, a consortium that studies and encourages the development of new playthings from the world's leading toy companies.

    "Technology innovation is playing a huge role in the future of financial services. That's why we're so pleased to have someone with Dr. Hawley's experience speak at the Forum. He will discuss the future of wireless and how it will affect financial transactions, as well as change the traditional infrastructure," said Shane York, Conference Manager for the Forum, an invite-only senior-level event for IT executives in the financial services industry. Dr. Hawley also will cover speech recognition (improving call centers, CRM, etc.)and other emerging technologies currently being developed in the MIT lab.

    To learn more about attending or sponsoring this high-level event, please contact Project Manager Sandra Moriarty at mailto:%20smoriarty@richmondevents.com.


     
    Agent Extranet Technology on Rise
    The use of agent extranets provides the clearest and most straightforward path for insurance companies to benefit from using the web, according to a new report from Celent Communications. The report predicts that the number of carriers implementing these systems will more than double within 24 months, and that the total amount spent on these systems will top $1.06 billion within the same period.
     
    "Effective use of agent extranets can dramatically reduce policy origination and service costs," says Celent analyst Matthew Josefowicz. "Even more importantly, reducing lag-time in agent communication can make independent agents more productive, and more loyal to the carrier."
     
    In addition to reducing costs, the report finds that the further computerization of policy origination and agent relationship management offers the opportunity to refine both areas through improved reporting and data monitoring. 

     
    Eleanor Rolls On
    According to banking consortium Identrus, there has been a growing swell of support for its "Project Eleanor" initiative to introduce a secure, direct business-to-business payment system on the Internet. Fifteen global financial institutions have invested in Project Eleanor, and several of them, ABN AMRO, HypoVereinsbank, Sanwa Bank/UFJ and Wells Fargo, are now conducting pilot activities in North America, Europe and Asia.
     
    Project Eleanor provides Web-based specifications to initiate B2B payments linking into existing bank systems. Using Eleanor, Identrus says that trading partners will have an alternative to traditional paper-based payment instruments to execute an Identrus-business transaction. Indentrus has been testing an initial reference application since August in concert with Sun Microsystems and its iPlanet e-Commerce Solutions software division.
     
    Project Eleanor includes six B2B e-payment types, including payment order, payment obligation, certified payment obligation, conditional payment order, conditional payment obligation and certified conditional payment obligation. Trading partners will have pre-established instructions with their banks for payment authorization, routing and settlement. Identrus has assumed ownership of Eleanor, which originally was an independent joint venture of the financial institutions.  Project Eleanor is expected to go into full production mid-year 2002. 

     
    EBPP Adoption To Accelerate
    The United States will continue to lead the world in the introduction and adoption of electronic bill presentment and payment services through 2005. New TowerGroup research shows that the adoption curve is set for acceleration both within the U.S. and around the globe.
     
    Highlights of TowerGroup's new findings include:
    • By the end of 2001, approximately 88% of global "roundtrip" electronic billing transactions will have been conducted in the U.S.
    • The international potential for EBPP services is vast. In 2001, consumers worldwide will receive a total of more than 103.7 billion bills, while their business counterparts will receive nearly 49.6 billion bills and invoices.
    • By 2010, TowerGroup forecasts that global B2B electronic presentment and payment volume will exceed B2C electronic billing activity.
    • TowerGroup projects that a global total of close to 50 million consumer bills and more than 10 million B2B items will be presented and paid via electronic roundtrip transactions in 2001. By 2005, these numbers will rise to more than 2.4 billion items, respectively, for both consumer and B2B transactions.


    Just a reminder…you are receiving The CIO Forum Financial Services
    2002 e-newsletter.  This is a free news and analysis service to help you stay
    on top of this fast-paced industry.  If you have questions about our upcoming
    forum, May 6-9, 2002 onboard Queen Elizabeth II, sailing from Manhattan,
    please see our web site http://www.cioforum.com/ or contact Project Manager
    Sandra Moriarty at 212.651.8721 or via email at smoriarty@richmondevents.com.