When a bank decides to shift focus, the likelihood is that it cannot do so without a major extension or overhaul of its infrastructure. Systems that were chosen for one set of tasks can hamper the move into new areas. This was precisely the challenge facing Connecticut-basedWebster Bank when it decided to move from its traditional savings bank focus to being a broader commercial bank.
Selection
The journey started in 2003. The bank's current CTO, John Kershner, was at that time recruited by the bank as a consultant to look at solutions for commercial lending and cash management. It quickly became apparent that the existing savings systems could not handle the more advanced functionality. The first decision was to select a specific commercial lending system, with FIS's ACBS chosen. The system needed to be integrated with the bank's existing in- house systems but the overall architecture was creaking. 'We decided that the infrastructure wouldn't really support the bank as it became a commercial bank, nor would it handle the kind of growth that the bank was envisaging,' said Kershner. So the decision was made to 'rip and replace all core banking systems'.
Naturally, this sounds like a daunting task but, from board approval in January 2004 (at which point Kershner joined in a full-time capacity), the new platforms were up and running by July of the following year. At that point,Webster converted a recently acquiredMassachusetts-based bank, FirstFed America Bancorp (Webster's first move beyond the borders of Connecticut); the full conversion of its original core business happened in October. Such speed might cause surprise within non-US banks but it shows a key benefit of the outsource model.
The bank started with a list of nine or ten vendors, said Kershner. There was a 'mini-evaluation' but his background meant that he had been involved in a number of system selections and replacements so was aware of the capabilities of the offerings. So it was that it quickly moved to a shortlist of two – FIS and Fiserv. It looked at the entire product suite of the two domestic heavyweights as well as at their product plans. The bank was keen on a Service Oriented Architecture (SOA) approach so was interested in the vision of the two companies from this perspective.
