A simpler IT architecture
Consolidation of systems is another regular theme when talking to banks that have decided to replace their core systems. This message came over loud and clear at Heritage Bank, for instance. It sought a real-time environment. ‘We currently process from a hybrid environment, and so we really wanted to change to help streamline the back office production,’ commented Lisa Welander, senior vice-president and CIO of Heritage Bank. The holding company, Heritage Financial Corporation, is based in Olympia, Washington and had $1.3 billion in assets. In Heritage Bank’s existing set-up it had three loan systems – commercial, mortgage, and installment – but it wanted a single consolidated platform. Other requirements included scalability and efficiency for both front-line and back office operations, Webb added. Fiserv’s Open Solutions-derived DNA was chosen in February 2013 ahead of competition from FIS and other Fiserv systems (mainly its Premier platform). In DNA’s favour was the fact that ‘it is a relationship-centered system’, said Welander. ‘We believe the new technology will bring a lot to the front-line as they work with the customers. Everything is built around the customer, not the account or the transaction.’
Technical improvement
Banks sometimes claim to have ‘outgrown’ their core systems, with this often having a technology aspect to it. In addition, regulators have become increasingly concerned about legacy platforms. Peoples Independent Bank in Alabama moved to an outsourced version of the i2Core solution from IBT, a privately-held banking software provider based in Texas. Being replaced was the deployed legacy Bancado offering from local rival, Waldorf Computer Systems. The $300 million community bank was on the lookout for a system that was fully integrated, real-time and flexible, especially in lending, said Royce Ogle, president at the bank. He added that ‘we also had to ensure the solution delivered quality and affordability that would allow us to remain competitive’. IBT’s president, Mike Golebiowski, said Peoples Independent Bank needed a new system because its legacy set-up had become ‘outdated’. The legacy platform was ‘written in unsupported language’, he stated, ‘and regulators
say banks have to make a decision to get off those ageing systems because there is only so much time before something is not able to be fixed or improved because the language is no longer maintained.’ Cut-over came in Q1 2014. There were similar drivers at Libertyville Savings
Bank, an Iowa-based bank with $195 million in assets. It chose the Core Director offering from Jack Henry on an outsourced basis to replace its 25-year-old onsite system from a domestic supplier, Nebraska-based Modern Banking Systems. The bank had grown significantly over the past ten years, commented Amber Stump McDowell, vice-president at Libertyville Savings Bank, and ‘we felt we needed a change to keep up with technology’. Libertyville Savings Bank’s main requirement was to
increase its efficiency, said Ryan Troutman, the bank’s CFO. ‘At the moment, there is a lot of double entry and the new system should automate many of our manual processes.’ McDowell agreed: ‘We have never operated on a real-time system, so we are really looking forward to that. It is going to improve how we can serve our customers’. Moving from an in-house
Libertyville Savings Bank US Financial Services Technology Market Report |
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