ABA Banking Journal - April 2007 - (Page 42)
IT TRENDS Why this core solution? They had their reasons De novos choose to start on a certain platform, and existing banks take their lumps and make the switch. Bankers give the back-story By Lauren Bielski, senior editor 42 APRIL 2007 /ABA BANKING JOURNAL www.ababj.com/subscribe.html ILLUSTRATION BY CORBIS IMAGES.COM magine if we wanted to start a new core processing company,” says CEO Tom Stumb, Nashville Bank and Trust. “It would be easy to create a technology that blew away the competition—that is, in comparison to the task of getting a bank to agree to be that first, third, or even tenth client.” The plainspoken Stumb knows a little something about starting ventures, having helped to launch the $112 million assets bank in 2004 aimed at the region’s high net worth market. “Bankers can be a very reticent bunch,” he notes, adding, “If you’ve ever worked in a place of any size, you’ll know it’s typical to talk about any number of system changes that need to be made and realize that many of them just never happen.” “I Hoping to avoid a similar fate, Stumb outsourced his new bank core processing business to Fidelity National Information Services and went with a PC—that is, its core processor software is housed on a PC at Fidelity rather simply having it as a front-end to a mainframe hiding, like Oz, behind a silver curtain. The choice of the low-cost, nimble, core processor has never given him a moment of regret. It was also far from the legacy norm when he did his evaluations of which core processor to select. But speed, not being contrary, motivated him. As one of the most active user-group members for Fidelity BankPac, Stumb knows that system upgrades don’t drag on. In one example, he described Fidelity’s simplification of data field population. “It used to be that names and addresses needed to be keyed in multiple times—at the deposit platform, the core, for debit card and check reorders, and for systems like OFAC scanning,” the CEO recalls. No longer. “Within 90 days of my request, the vendor set it up so that all the systems were pre-populated with common information and no rekeying was required.” A need for new applications—or features—can cause a new bank to choose one vendor over another, or lead a bank IT team down the hard road of swapping out the technology that lies beneath, but it turns out that any number of factors can instigate core replacement. Tom Brydon, North American banking industry marketing director with Accenture, Charlotte, N.C., says that de novos are small enough to run with most platforms. As they take on branches and deposits, those systems can be taxed. And so, scale becomes an issue rather quickly. Certainly this is
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