Banks will increasingly use Web 2.0 technology to deliver online wholesale banking services over the next three years, according to a report from Boston-based analyst house Celent.
The use of rich Internet applications (RIAs) and online communities and blogs will "redefine the small business online banking and cash management space" over the next three years, says Celent.
"Although small business banking and corporate cash management applications provide a slew of features and functionality, they look and feel out of date, aren't easy enough to use, and can't stand up to what the customer would really like," says Jacob Jegher, senior analyst, banking group, Celent. "Some banks will unfortunately keep things status quo, while others have already begun to recognize the need for significant change and innovation with the ultimate goal of enhancing the user experience and the customer relationship."
Celent says many banks recognise the need to embrace Web 2.0 but only a handful of early movers are currently showing signs of next-generation offerings and it will take 18 months before real progress is made.
The sluggish uptake is partly due to banks facing tightened IT budgets as the credit crunch bites, says the analyst.
In addition many are having a difficult time deciding which Ajax framework to choose - such as Backbase, Mootools, Prototype, jMaki - as they consider various factors such as performance, compatibility and security.
But despite this Celent says Web 2.0 will "revolutionise the current landscape" with new systems emphasising customer experience, usability and navigation while allowing users to take care of their core banking requirements.
A study last year from the Economist Intelligence Unit found that a clear majority of senior executives at the world's largest corporations believe Web 2.0 technologies have the potential to transform customer relationship management and increase revenues.