IBS Journal April 2015
Wheat fields of Wisconsin ©Elvis Kennedy, Flickr
but had been heavily customised over the years so could be viewed as a home-grown platform. In 2000, the bank had built a Microsoft .Net-based front-end. As the bank became more commercial-
ly focused, particularly looking to capitalise on the short-term lending market in Texas, so the customised platform was proving too inflexible to support the ambitions. It tried to enhance the system but, as a bank rather than a software house, this was not its area of expertise. This brought an original selection in
2004/5 of FIS’s ACBS. Both ACBS and Loan- IQ have been around for 20+years, were acquired a long while ago by their current parents, and have often been mentioned in the same breath when talking about the relatively underpopulated syndicated lend- ing systems sector. ACBS was taken on a hosted basis but,
as FCBT started to build up its participa- tion portfolio, it began to find restrictions with its chosen platform, with functionality felt to be lacking to support the intricacies of the newer business. FCBT did not feel comfortable with FIS’s ability to modify the system.
The selection
The bank undertook an RFP-based selec- tion process to find a replacement, aided by Arizona-based consulting company, Cor- nerstone Advisors. ACBS was considered, so too LoanIQ and a number of broader core banking systems, such as Fiserv’s CBS. There was what turned out to be a false start when one of the core systems, Silver- lake from domestic supplier, Jack Henry & Associates, was chosen (to be installed on an in-house basis). This was in 2008 and, according to the bank’s lending services VP at the time, using Cornerstone Advisors, the 18-month selection had concluded that Silverlake was the system ‘most compati- ble with our core lending needs’. The ‘high- ly customisable’ nature of the system was expected to aid the implementation. However, fairly swiftly, the bank con-
cluded that it needed a specialist lending system after all. In LoanIQ, says Elliott, Misys had a complex engine that needed to be simplified for FCBT; Jack Henry had a sim- ple engine that needed to be complicated. The bank decided in the end that the for- mer route was easier than the latter one. ‘It
© IBS Intelligence 2015
was easier for Misys to step down into the mid-market than for Jack Henry to step up.’ Loan accounting was the main focus of
the selection and LoanIQ came out strong- ly from this perspective, including in the area of managing the bank’s capital market portfolio. The structure of the system, says Elliott, which was built from the start for syndications, was felt to be a good fit with the bank’s organisational set-up as it is ‘rel- atively loosely coupled’, with good APIs and a three-tier client-server architecture, plus a ‘multi-tenant structure’. ‘Misys was also more flexible when it came to answering us on how the system could be adjusted for us.’ While the bank wanted to fit its pro- cesses to the system as much as possible, its unusual structure and business model meant there was always going to be custo- misation. The bank was also reassured by the
number of large US banks with the system, such as JP Morgan Chase and Wells Fargo, plus a couple that had decided to move from ACBS (one of these was Bank of Amer- ica). Citibank and Goldman Sachs were more or less the only two large US banks that didn’t have LoanIQ, says Elliott.
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case study: farm credit bank of texas
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