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Core Systems

10:27 AM
Art Gillis
Art Gillis

Banks Are Now in the 'What If?' Business

When Congress and bank regulators act wisely, bank tech vendors respond quickly and deliver solutions around risk management.

It's quite refreshing to see how quickly bank tech vendors have reacted to the banking crunch, especially since IT vendors were free and clear of any blame in the pre-2008 wildcat banking of investing in packaged junk, unscrupulous lending, following blindly the money-hungry Wall Street boys into the valley of unknowns, and you know the rest of the traumas if you read the papers or watch TV.

This message is a positive one because it's about banks having added protective technology to what used to be mainly a factory of transaction processing. My conclusions are based not on promises but on real evidence as delivered by 80 hand-picked companies, now residing in Automation in Banking-2011, that provide tech solutions to the 15,175 U.S. financial institutions as well as beyond the borders of the U.S.

To give you a historical perspective of what bank technology was all about in those good ol' days of innocence, the first edition of Automation in Banking-1984 included the following companies:

First Financial ManagementFiserv
NCR Data ServicesFiserv
Mellon DatacenterFiserv
Citicorp Information ResourcesFiserv
Information Technology, Inc.Fiserv
First Interstate Information SystemsFiserv
EDS Bank ServicesBy way of Aurum Technology and now FIS
SystematicsBy way of Alltel and now FIS
M&I Data Services (Metavante)FIS
Kirchman Corp.By way of Metavante and now FIS
City National BankBy way of Alltel and now FIS
The Newtrend GroupBy way of EDS then Aurum and now FIS
ADPBy way of BISYS and now Open Solutions
Sun Trust Data SystemsBy way of Bisys and now Open Solutions
Jack Henry & AssociatesSame
Broadway & SeymourJack Henry & Associates
Hogan SystemsComputer Sciences Corp.
Computer Services, Inc.Same
Norwest Technical ServicesWithdrew from the business
Banks of Iowa Computer Services and FirstarWithdrew from the business

All of the companies above provided core software for in-house use or core outsourcing. That was the name of the game at the time. Nothing else mattered much. Today, the complete tech pie includes 21 additional categories of solutions besides core. In total, there are 440 brands of vendor solutions available to take on even the wildest dreams of wishful bankers. It may sound like a marketing claim, but coming from me, it's like an amendment to the Constitution. The banking industry is fully covered with respect to IT solutions, and offered by highly reputable vendors.

But in 2011, the thing that continues to catch my attention the most, as I compile the current edition of the report, is the attention devoted to anything called risk. Banks are no longer just in the factory work of processing transactions to produce an accurate balance. Banks are now in the "what if" business. So the proof that delivered that message to this man is: There are three new sections of tech solutions in the report that didn't exist a couple of years ago -- Compliance Solutions, Risk Management Solutions and Business Intelligence Solutions. In those three sections there are now 95 new vendor product solutions designed to protect banks.

What's in your bank's IT strategy -- accurate bookkeeping, or saving the bank from Sheila's List, stockholder fury, customer insecurity, electronic fraud, loan defaults, mod-tek Willie Suttons, or plain ol' weaker earnings? Get a move on. Risk is banking's new middle name.

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