Technology changes so rapidly and terminology grows broader and wider. Here's how to understand what the heck the bank's tech people are saying.
Bank IT managers have often been accused of speaking a language few others within the organization could understand. Every new technological innovation comes with its own jargon ... and instead of clarity; the bank's technology environment becomes more "clouded" with a wealth of new terms acronyms and explanations worthy of an MIT doctoral candidate.
For the rest of us technological neophytes, here is a glossary of basic terms for directors (and many bank staffers) to help with the translation of conversations with bank IT experts.
The process of proving the customer is who they really are, whether online or in person at a branch. Due to rising fraud risk, the importance of this process will only increase.
The process of storing information. Due to the proliferation of imaging (see Imaging below), document and item image archives are now becoming quite extensive and must be kept for at least seven years. Also becomes a data conversion consideration when changing vendors.
The maximum amount of data that can be run through a communication path. It must be sized properly for its projected use.
A collection of extensive datasets on all forms of customer activity, including: Point of Sale, CRM, transactional activity, online usage activity, call records, etc. This is the basis for deeper analysis than ever possible. This could even allow for predicting future customer purchasing and behavioral trends.
The ability to support multiple forms of communicated media (voice and data) on the same data communications channel.
Use of computing resources being delivered as a service over the internet or a private (secure) communications network. Outsourced core and EFT processing technically is cloud computing, although typically delivered over a private communications network.
Graphical and summary representation of numeric data as bar charts, pie charts, line graphs, etc. Becoming very common in representing financial data with the ability to "drill down" to see the underlying data. A picture truly is worth a thousand words or, in this case, numbers.
A data breach is an incident in which sensitive, protected, or confidential data has potentially been viewed, stolen, or used by an individual unauthorized to do so. This may be the result of criminal activity or something as simple as sheer negligence. In either case, the risk is exceedingly high for the financial institution and its customers.
Processes and standards that are employed to insure all data remain secure. This is ever evolving in order to stay ahead of criminal activity. Think of it as a "vault" for electronic information..
Archived client data to be used in analytical reporting. Not as extensive as typically thought of in Big Data. It will contain historical data to provide trend reporting from previous month-end, quarters, and year-end timeframes.
DDoS attacks (Distributive Denial of Service):
Malicious internet activity designed to overwhelm web servers with fictitious activity that interrupts or suspends the ability to provide any service.
Imagine 100 buses dropping their passengers at a branch. They all enter and fill the lobby demanding service. This results in legitimate customer activity no longer able to be conducted.
Sometimes referred to as the modern day mainframe computer.
Securely delivering account statements and supporting detail via email or through a secure website. Becoming ever more cost-effective with each increase in postage fees.
A secured communications channel that uses shared resources for much of the communications path. It is typically much cheaper than leased lines. See MPLS.
The process of taking physical documents (loan documents, etc.) and transaction items (checks, payment forms, etc.)and turning them into digital items to be stored and retrieved from your Archive (see above).
The exchange of data and the combining of processes between two dissimilar systems, often resulting in a highly enhanced service.
Exchange of data between dissimilar systems.
MPLS (Multiprotocol Label Switching):
A high-performance communication channel that is similar to Frame Relay. Highly scalable with robust features not found in Frame Relay, MPLS is now replacing many Frame Relay networks.
NFC (Near Field Communications):
This communications standard enables smartphones to exchange data with another device located within a few centimeters of the smartphone. Anticipated services include contactless payments (chip cards).
A service that allows internet users to store their login, password, credit card, and shipping information in a secure form on their computers, mobile phones, and tablets.
P2P payments (Person to Person):
An emerging nontraditional payment service that allows one individual to pay another individual electronically through their email or cell phone number.
A present-day form of authentication. However, concern is growing on the longer-term suitability of passwords for authentication. This is due to the limitations of this method and the unsecure nature of password owners.
A service where a customer can scan the image of a check on their smartphone for secure deposit into their bank account.
PFM (Personal Finance Management):
A series of online tools that allow internet banking users to better monitor and manage their finances.
A technique used to gather personal data (SSN, account numbers, login names, passwords, etc.) via telephone or the internet. Often accomplished by impersonating a website, through malware-infested email, or engineering robo-calls to gain this information.
Archaic method of acquiring data from account inquiry screens. Typically used when interfaces are not allowed. Utilization of this technology can create legal and security concerns unless all parties agree to this service.
SLA (Service Level Agreement):
A contractual commitment that defines the acceptable level of service to be provided. All performance standards should be accompanied by a remedy in the event the standard is not maintained.
SOA (Service Oriented Architecture):
A software design concept that allows individual services to plug into a larger, more complex system
The replacing of several network servers with one larger robust server operating specialized software that allows each server function to remain discrete and secure.
VPN (Virtual Private Network):
The ability to create a private and secure communications channel on a public network or the internet.
Did you find this helpful? Are there other areas of bank terminology you'd like an expert's guidance on? Email Steve Cocheo, executive editor and digital content manager.
About the authors
Michael A. Scott
Prior to joining Austin Associates in 2010, Scott served as president of a bank consulting firm specializing in core and EFT processing evaluation services. Previously, he held various positions with a midwest bank, and national data processing and EFT organizations. He possesses extensive background in bank operations and data processing sales. As a managing director of Austin Associates' Technology Solutions Division, he assists community bank clients with evaluating the effectiveness of their core processing systems, assessing data processing costs, and working with bank data processing personnel to ensure optimal utilization of technology-based systems, services and processes.
Stephen D. Heckard
Heckard joined Austin Associates in 2010 and serves as a managing director of the firm's Technology Solutions Division. His responsibilities encompass managing community bank client relationships involving assessment of core processing solutions, reviewing client banks' technology vendor contracts, developing cost/benefits comparisons and analyses of in-house and outsourced core processing alternatives and managing vendor selection processes for various data processing systems, process, and vendor services. He has more than 35 years of bank data processing and technology experience working for regional banks and national providers of bank data processing services and technology-based products.