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 Art Gillis

Profile of Art Gillis

Blog Posts: 290
Articles by Art Gillis

The Sell Side of CIF

When the bank marketing division hugs the bank IT division, then I'll believe the engagement is more than just sweet nothings.

If I Were A Bank CIO...

CIOs should take advantage of the holiday break to rest, reflect and create a new IT blueprint for their bank.

Cost Accounting - a Term as Foreign to Bankers as a Profitable Trust Department

I checked with Mr. Campbell, and just as I thought, he knows exactly how many pieces of carrots, potatoes, celery, peas, onions and green beans go into a can of vegetable soup. Even after enhancing it with sea salt and macaroni, and at a sale price of $1.00 per can, Mr. Campbell makes 15 cents net. That's good pricing.

When I'm Wrong, It Really Hurts

I'm very grateful to the reader who corrected me about the CIO of Wells Fargo. Admittedly, I lack international sophistication and therefore the name Avid I presumed was male because 99.9% of all bank CIOs are male.

IT Innovation in Banking — Not Easy to Find

I like all kinds of "beauty contests" announcing the best of class in anything. But mostly because it allows me to play critic. For example, this is me, "They must have been downing too many shots to pick this guy as MVP." Or, "You certainly don't need good looks to be a great singer." Or, "That actor must have a great agent to have been cast for that part." So it was with great interest that I pored over InformationWeek's 22nd Annual Ranking of the most innovative companies. I like IW for its d

If a Bank Doesn't Have the Best Commercial Loan System It Might as Well be Using an NCR Post-Tronic

One reason why I'm using this blog to announce the importance of the commercial loan (CL) module of core systems is that not many people know it's the most valuable application in the suite. Here's a case in point. During my seminars for bank tech vendors, it is clear that the best people show up. It's as if my announcement said, "Don't send your rookies." Early on, as an attention grabber, I use the following hypothetical situation: "You are invited to make a 15-minute presentation to a body of

2010 Was Supposed to be the Beginning of Banking's Recovery - It Wasn't

Bank earnings are shrinking; bank failures are growing (20% more than last year at the end of this eighth month); bank customers (retail and commercial) aren't making good on their loans; Chairwoman Bair's troubled list (829) is growing; Chairman Bernanke continues to report the weak economy isn’t going to end soon and yet he can't find a better bailout; the wrists of too-big-to-fail banks are broken from all the congressional penalty slaps; bank tech vendors are reporting flat revenues; b

There's Value in Every Press Release - About 95%

The value of a vendor's press release varies according to who is reading it. The difference is the equivalent of being served a crawfish etouffee dinner at Bon Ton in New Orleans vs. a display of raw ingredients on the chef's workbench. The creator of a press release wants to sell something; an analyst who reads it wants to boil the content down to bare facts. I want both sides of the story.

It's Back to School and the Perfect Time for Bank IT Managers to Get Back to Work

I expect that 15,678 bank IT managers will take this as an insult, but my message is designed to serve as a wake-up call for next year. YOU'LL NEVER GET A CHANCE LIKE THIS TO PUT YOUR HOUSE IN ORDER. The "three-year vacation" is about to end; the wave of new tech projects is beginning to look like a developing tsunami.

Bank IT Costs - The Right Amount is an Individual Matter

Two CIOs walk into a bar at a bankers' convention. Bob says I work for a $500 million bank and we use the XYZ core system. John says ditto. How much do you spend on IT? Bob says my annual budget is $2 million. John says ditto, let's have a beer. They feel good about themselves and talk about last night's game.

Knowing the Customer is 60% Technology and 40% Banker

My Dear Banker, knows the 4 books I have read this summer and continues to send me related titles to buy. Do you know the 14 accounts I have at your bank, and have you ever thought of calling me even if it's to ask my mother's maiden name? Pick up your phone; there are eight more accounts you don't have. Regards, A Very Good Customer

Financial Overhaul May Improve Banks' Customer Relationships

My experience as a bank customer began early. I was the treasurer of our household at age nine, and the custodian of five Christmas Club accounts. That was my grand total understanding of banking. Every week I went to the bank like clock-work. My first encounter with pretty girls occurred at the teller line, and my first disappointment in that awkward adventure presented itself when Mr. Tyler would flag me down to his station. He had accumulated a week's worth of advice that had to be delivered

It Was a Good Year for Bank IT, But Who's Gloating?

After 25 years of publishing my bank tech report, I do not think 2009 was any different for the bank tech industry as long as one isolates it from all the other disasters that occurred in 2009. In other words, for once, technology was not to blame for anything. It didn't experience another Y2K dilemma; there was no bust in the dot-com world; the Internet didn't go down or even brown out; there were no major data thefts or incidents of cybercrime; the 6% average bank IT budget increase for the FI

There's a Lot of Story-Telling Besides the 81 Companies in Automation in Banking - 2010

At the end of each major core vendor's profile in my annual report on bank tech vendors is a commentary about what I think of the company. My comments are a reflection of how many sparks fly based on the company's 2009 activities. Because I own a "sparks meter" handed down to me by my blacksmith grandfather, I am able to gauge the volume objectively and the winner this year is FIS. So I'm offering my comments on FIS in this blog only because I believe it makes for unusual reading in a world of n

The Banking Crunch Has Done Wonders for Expanded Development of Tech Solutions

I can think of lots of cliches that apply to the basis for this blog, but unless you live under a rock, you must have heard them all by now. My observation of good resulting from bad comes as I work on the 2010 Edition of my annual research report, "Automation in Banking." The equation that came to me is:

Still No Upswing in the Sale of New Core Systems to U.S. Banks

For the past 33 years U.S. banks, thrifts, credit unions, de novos and near-banks have been implementing new core systems. And not just for five years until a "better mouse trap" is discovered, but for the life of the bank. If the buyers chose wisely, they had vendors who got stronger every year and kept their customers very happy, and out of the market.

Less-Than-Full Usage of Bank Software, Part 3

In this third and final part of a series (unless you keep it going with your excellent feedback), I intend to prove that many banks are not using their rich and robust applications software to the fullest, and thus are guilty of negligence to their stockholders, customers, employees, regulatory agencies, potential new customers, and that fragile thing called public image.

Less-Than-Full Usage of Bank Software, Part 2

When I wrote last week's blog, I knew I wasn't going to get off easy. There's a lot more to tell about bank software, and some clever readers spotted my short cuts. This second installment was inspired by a reader who pointed out that applications are often packed with superfluous features that don't necessarily serve business needs. I agree with that statement. The reason I chose to bring up the matter of sub use is that "superfluous" is in the mind of the beholder. Bank tech vendors work for

The Value of Bank Software is Based on a Bank's Skill in Using It, Not the Vendor's Price

Before I go any further, I know what you're thinking. I'm not talking about ASP, or outsourcing, or cloud computing (if that idea ever becomes popular in banking), where the cost model is based on how many transactions a vendor processes for a bank. Nor am I talking about tiered pricing where the license fee for core software is geared to the FI's asset size, from $50k to several million dollars. My point is more subtle. It's about how much value a bank can squeeze out of a piece of standard app

Q&A With Raju Shivdasani, A General in the Front Lines of Bank Tech

It's hard to pin down the year in which I met Raju Shivdasani, president of Harland Financial Solutions, but now I count decades so the year doesn't matter. Orlando is the world of fantasy and citrus, but I relate to it as a national center for bank technology. I recently caught up with "Raj" there and asked him for his take on the bank tech world in which he has engaged for so many years.

If Very Large Banks Used the Technology of Community Banks, They Might Never Fail

I will probably be called a bigot because 97% of my banking clients are in the small and mid-size ranges of the total bank population. Having worked for only eight of the top 34 U.S. banks (two if you try to find them today) I can give you one very important reason why I believe large banks are in trouble. It's not the $1.5 trillion average asset size ($1.17T - $1.73T) of the top four that spooks me (if this were baseball, the 5th would be in the minors). It's the fact that their tech systems k

Even Bank CIOs Don't Know the Real Cost of Their IT Resource

Calculating the accurate cost of a bank's IT resource is like pinning down the exact location of Osama bin Laden's cave. There are some ideas floating around, but they're fuzzy. Because I don't have a personal stake in this matter, I believe I can present an interesting case to explain this phenomenon.

Press Releases Issued by Bank Tech Vendors are Now My Favorite Reads

There was a time about five years ago and more when I would delete an online press release just by the sound of its title. Now, not only do I read them all, but I catalog them, file them for future use, and drill down to create more research than the vendor saw fit to include. It's a lot of work, but it pays off if increasing one's knowledge is the goal.

Lookin' For Growth in All the Wrong Places

Last week I covered the subject of diminishing growth among the top six bank tech vendors, based on the banking crunch and the weaknesses of the economy. This week I see a long term problem for bank tech companies and that is an absence of new technologies. Because my definition of "new" may not match that of others, I want to include my five-year buffer period. If it was introduced within the past five years, I call it new because bankers are very slow in gearing up to adopt new technologies. W

604 Banks Disappeared in 2009 - For Good and Bad Reasons

Bank Population Accounting: January 1, 2009 16,374 Add de novos 26 (185 in 2007 before the crunch) Deduct failed banks 140 Deduct acquired banks 464 December 31, 2009 15,796 (This 3.5% net reduction compares to a 2.4% average during the past 16 years)

With 30 Brands of Credit Union Core Systems in the Market, Who Woulda Thunk We Needed One More?

The answer is Fiserv, and the new core product is Acumen. Unlike Henry Ford, Fiserv is not a "one-color-for-all" vendor. In fact, the company has more brands of same-type-applications than any other bank tech company. In the case of credit union core systems, Fiserv now offers 15. An astute reader might correct my count because some core systems developed more than 20 years ago, and designed for commercial banks and thrifts, have been adapted for credit unions. So some of Fiserv's earlier core s

Bank Tech Vendors Do Not Live By Core Alone

A first-time event occurred in the bank tech space during 2009. Whereas in previous years the list of popular solutions sold by major vendors included ten solutions, in 2009 the list shot up to 34. These 34 are a unique mix of applications. I'd like to have a chat with the pundits who have been using the word "commodities" to describe the offerings of core/ancillary system vendors.

The Economic Recovery Has Begun

First, let me come clean with this admission. I am not a Gartner or Forrester visionary who puts a "Good Housekeeping" label on all he surveys. I'm the guy in the trenches and the quintessential errand boy who is always out there, whether it be on assignment or running errands for Mrs. Gillis. The fun part is that Mrs. Gillis also drags me out on mini vacations to take a little break and enjoy the "world."

A Potentially Strong Alliance: Every Bank CEO's Concerns + The Undiscovered Capabilities of Information Technology

After 321 client assignments, dozens of seminars, and lots of private feedback from 241 blogs, I have obtained a very good feel for what is on the minds of bank CEOs every day at 8:00 AM. I never asked them the question because I was too timid. And I didn't commission a survey just to receive politically correct answers. The telling was entirely their idea, and I happen to be a very good listener.

How to Save Money on IT

The last time I addressed the subject of IT cost cutting for a mass audience was April 1978, at a BAI conference in Indianapolis. Bankers filled the room, but what surprised me was the absence of napping. Most of them were taking notes because my list was long and each bullet was self explanatory. To provide you with a sense of how much we have progressed in 33 years, I'll give you an example of what was on the list - "Recycle your microfiche processing materials to extract the precious metals."

How to Negotiate A Bank Tech Contract

I'm not a fly, so I don't know how vendors negotiate IT deals with banks. But I do know how to direct my clients once the choice of primary vendor has been confirmed. I basically tell them to negotiate from a position of intelligence, not psychology. Don't chisel; don't beg; don't hang on to the banking crunch as if you were a welfare recipient; don't threaten; don't tease with "better" offers from other vendors; don't make claims that your deal will put the vendor on the map. They're already on

Bank Tech Vendor Consolidation Will React to the Times

I am happy that I have never been called a visionary. The "cover boys" of past bank tech trade journals expressed their visions, only to later disappear off the leading edge of technology. It's a lot safer, and longevity is assured, if you report what you can see, hear, touch, taste and smell.

Ancillary Applications May Now Be Leading The Way In Bank IT

I don't believe it's news anymore when I tell you core system sales have tapered off in the past ten years. But here's proof. In the year 2000, 7.3% of the FI population acquired a new core system. In 2009, the rate was approximately 2%. Going forward, it may stay at 2% or it may continue to decline, but it won't increase.

If Testing 75 Brands of Bank Core Systems Sounds Intimidating, Relax, I'll Show You How To Do It The Right Way

Over the years, I have developed many good tools that I use to assist banks in the selection of a new core system. The reasons I have accumulated 36 tools containing 814 criteria are two-fold. The first is I can't stand "reinventing the wheel." The second is I don't trust myself to remember everything I did during previous projects. As a result, five months after I begin an assignment, 35 bank employees and I agree on the recommended solution. One year after the go-live date, even the bank exa

It May Be Three Years Before Bank IT Returns To Its Typical High Performance

I see a glimmer of hope in the banking industry; just enough to expect that routine matters such as keeping the IT factory up to date with new apps, ongoing reliability, strong security, responsive customer service, real-time speed, risk management tools that protect bank assets, databases to provide focused new business opportunities, connections for EVERY customer relationship, and the all-important intel function that inquisitive minds will require more of - my humble definition of a well-run

Santa's Gift To Bankers-The Merit Score

The North Pole--I know how much you all pay attention to the quintessential Credit Score in evaluating the credit worthiness of borrowers. Since it hasn't worked to prevent all sorts of lending disasters, I'm offering you something else in your attempts to set the banking business on its right course. I call it the Merit Score. It's similar to what I use to keep track of who's naughty or nice.

There Ought To Be A State Dinner For 71 Bank Tech Vendors

Whenever I eat chicken, I react like Pavlov's dog and relate to the years 1980 to 1985. It was then that I ate more rubber chicken than any other time in my life. That's when I was on the speaker circuit conducting seminars for all kinds of banking organizations. My audiences included community bankers.

Every Bank Needs an IT Think Tank

"Practical" is my middle name-and I haven't shed my suit and wingtip shoes for a toga and sandals. So this is not an idea I thought I would be preaching. I tried it with the vendors a while back but I have not seen any signs of acceptance. I hope bankers will see the value of having an IT think tank, even if it's a Sunday night effort to take the place of "60 Minutes." The potential benefits might only be soft, such as not being the target of a "60 Minutes" embarrassment. I believe everyone shou

Regulatory Agencies Need to Adopt a New Modus Operandi for Surveillance

In the spirit of being United, as in U.S.A., can't six New England states give us even one failed bank? Every other region managed to do that. Sixty-two percent of the states can account for at least one bank failure this year. Georgia holds the record with 19. There's more to this phenomenon than meets the eye. New England bankers wouldn't lend to their mother if she needed an operation. On the other hand, Bert Lance (former CEO of National Bank of Georgia prior to his stint as Bureau of the Bu

Like the FBI Director, I'm Extremely Cautious of Cybercrime

Where we (FBI Director Robert Mueller and I) part company, however, is in the fact that I never enrolled in online banking. So it's quite easy for me to ignore phishing e-mails, even fictitious ones from my own bank, let alone all the fake wannabes. My reason for not putting my monetary transactions on the Internet is simple-I know too much about technology and its user friendliness, even as it applies to intruders. For every new hurdle the hopeful protectors set up, it takes only 18 hours for t

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