Despite earning top marks for technology in Investment Executive‘s Account Managers’ Report Card for the second year in a row, Royal Bank of Canada suffered through delayed processing of thousands of banking transactions last month because of a software error.

A tiny flaw in Royal Bank’s programming code derailed normal business for a week. The cruelest irony was that it happened when the bank was upgrading its software.

But apart from that unsettling glitch, it’s been a good year for account managers on the technology front. In fact, banks and credit unions seem to be giving the role of technology for clients and advisors a higher priority than they have in the past.

“Over the past three or four years, we’ve gone through a major upgrade of technology,” says Sue Graham Parker, senior vice president of retail and small-business banking at Bank of Nova Scotia in Toronto. The bank nabbed top marks in both Web tools categories — for managers and clients.

“It’s very important for our clients,” adds Steve McNair, Toronto-based CIBC‘s executive vice president of Imperial Service and private wealth-management services, “because they tend to be big technology users.” Even CIBC’s mutual fund account opening process is online.

These days, the banks and credit unions are opting for integrated technology packages with different communication options. “Our strategy is ‘click, brick and ring’,” says Paolo Pizzuto, National Bank of Canada’s vice president of sales and services strategy in Montreal, referring to the mix of virtual banking, telephone banking and face-to-face branch banking that National Bank is working on.

Ditto at Scotiabank, with its top-rated Web offerings. “Our ScotiaMcLeod direct investing and Internet banking have received great acclaim from the industry and from customers. In fact, I think, both are Canadian industry leaders,” Graham Parker says.

“More than 35% of our clients are using the Internet,” says Pizzuto. National’s Bank Internet clients total around 550,000. Scotia Online Banking boasts more than twice that many, with 1.25 million clients.

At Royal Bank, 65.3% of its customers are active online and using telephone banking, says Graeme Harris of RBC Investments’ public affairs department in Toronto. Canadians have embraced banking technology.

Overall, scores in all technology categories are slightly improved. Five of the six banks surveyed received higher front-office technology ratings, as did the credit unions, while scores for Web tools for both managers and clients are about the same.
For the first time, managers were asked to rate the back-office technology at their firms — scores were respectable, if on the low side.

Firms have been cautiously upgrading and integrating new systems and hardware for the benefit of both account managers and clients. “We’re adding functionality gradually to make sure the change is not overwhelming for our [financial counsellors],” Pizzuto says of National’s two-year plan.

At Scotiabank, planners and managers are excited about recent changes. “There is a new front-end system,” says an account manager in Alberta. “It’s paperless, cuts down on fraud. Tellers love it … more customer service.”

“It’s amazing, but when you talk to staff now,” says Graham Parker, “they almost can’t remember four or five years ago, when they did everything manually. They’ve become very versatile and used to using the technology.”

The promise of easier, improved customer service makes new technology attractive to most account managers. “Anything that frees me up to focus on sales [and] lessens my time on paperwork, please!” pleads a National banker in Ontario.

Scotiabank’s technology improvements helped the firm place second in the front-office category (tied with the credit unions), improving slightly over last year. It now just has to apply the same initiative to its back office, which is described as “old, ancient computers” by an Alberta banker.
Ontario bankers are slightly more optimistic about the back office. “They are working feverishly on it,” one commented.

If only National Bank employees could say the same about their front- and back-office technology. Bankers at National Bank are impatient to see improvements, and they’ve given their front office a 5.0. “It is still using black-and-white stuff,” a Toronto-area banker complains.

Relief, however, is on the way. “New hardware will start to be implemented in July,” says Pizzuto. “After that, a new sales platform will be rolled out.”

At the credit unions, an online training program called “CU Source” is one of the larger technology rollouts at Canada’s credit unions. Don Rolfe, president and CEO of Credential Financial Inc. and Ethical Funds Co. in Vancouver, says the software program is being implemented across Canada.