LAS VEGAS — Driven by new economic realities, more and more banks and credit unions are now beginning to use the tools they've long had available to them to analyze the profitability of individual members and customers.
And if they're already invested in those tools, it's a good thing, because money for investing in new tech tools most likely won't be available at all as financial institutions devote most of their resources instead to meeting the new wave of regulations now rolling toward them.
Those are the views, respectively, of the CEOs of Jack Henry & Associates and FICO aired at a panel discussion on tech trends held Wednesday at the BAI Retail Delivery exposition in Las Vegas.
"When times are good, you don't see nearly as much uptake of profitability solutions, and when you did, our customers have showed a reluctance to address the issues those tools raised," said Jack Henry CEO Jack Prim. "That's going to need to change and financial institutions are going to need to not only understand profitability but take appropriate action based on that understanding."
Meanwhile, Mark Greene, CEO of FICO, said the bankers he's been talking to in recent days have told him that they believe they will have to "consume all of their discretionary income in the months ahead" dealing with effects of 135 new regulations taking effect in January from the CARD Act, Dodds-Frank bill and other measures.
"We're seeing a lot of interest in bringing on these analytical tools and using them, in managing certainty and risks, but the money probably won't be there for new investment in things like new customer management systems. That's what bankers I talk to are telling me," Greene said.
"And I don't think is a transitional phenomenon," he added. "It's almost schizophrenic. Many banks are showing really strong financial results but the bankers I talk to are using words like 'cautious' and 'tentative' and they're stockpiling cash. It's hard to reconcile that with the results we're seeing but it's really because they're worried about the financial health of consumers."