The past two years have seen tremendous change throughout the banking industry. We face the challenges of a sluggish economy, low loan demand, low interest rates and new regulations. At First Horizon, our technology team is a strategic enabler, helping the company meet these challenges and succeed.
To act from a position of strength, First Horizon recently completed a massive technology transformation that literally upgraded or replaced every core system at the bank. We upgraded our core loan and deposit systems, replaced our branch systems, deployed new consumer and commercial loan origination systems, replaced our card processing system, upgraded our consumer and commercial Internet banking platforms and deployed mobile banking, and put into production new sales tools across all lines of business.
In addition to the system changes, we completely insourced our data center. We're now ready for growth with a renewed technology foundation. But we need to make certain First Horizon uses that strong technology foundation to deliver differentiated and superior customer service. Our systems need to work seamlessly together to enable customers to access banking services whenever and wherever they need them. That role has not changed -- but the pace of change is accelerating.
The industry has seen the collapse of global financial giants and experienced the worst recession since the Great Depression. New regulations increase costs and reduce revenue opportunities for banks across the board. We've seen historic actions by the Fed, with no end in sight. There are new threats to banks daily from non-banking entities, including merchants and consumer technology companies. Bankers are almost as unpopular as politicians. Margins are squeezed, and winning customers is increasingly competitive. Banking is truly changing forever.
Every CIO is facing an onslaught of such challenges. Regulatory burdens constantly raise the cost to "stay in the game," while driving a need to run low-cost, highly efficient technology organizations. The need to stay close to innovative new technologies and breakthrough capabilities is a daily task. CIOs are expected to run tight technology operations, stay abreast of new market entrants, and bring forth potential game-changing technology solutions that can generate new revenue and customer service opportunities.
3 Game Changers
There are several key technologies that are emerging as potential game-changers in banking. The most obvious is change in the payments industry and mobile payments. As mobile person-to-person and person-to-business payment capabilities become inherent in the next generation of mobile devices, banks must determine their strategy for fulfilling a value-added role in that space.
[Durbin and the Future of Payments]
A second potential game-changer is real-time interaction. Customers want real-time information regarding their balances. They want real-time alerts regarding unusual activity. And they want an ability to interact in real-time with their bankers, at any time from anywhere. International banks lead U.S. institutions in the use of real-time core banking technologies. It's not a question of if, but rather when this capability will become table stakes for U.S. banks.
A third game-changer is customer self-service. Mobile deposit is a great example: Customers prefer to take care of deposits themselves using their mobile devices versus visiting a branch or an ATM. It's a convenience factor for the customer. It's also good for the bank. Banks should look for more win-win opportunities to empower self-service.
It's a challenging yet exciting time to lead technology organizations within the financial services industry. All of this change creates tremendous opportunity for those banks with the foresight to leverage technology to stay relevant and to recognize technology as a strategic enabler.
Bruce Livesay is EVP & CIO for Memphis-based First Horizon National Corp.