Integrating Data for a Holistic View
It is this kind of approach that enhances banks' relationships with their customers, says Kevin Guenthner, CIO with Billings, Mont.-based First Interstate Bank ($6 billion in assets). "Our job is to integrate [data]," he says. "We have many platforms and technologies that deal with relationships. We take data from various channels and get a better view of the customer to create products that fit the relationship."
Using the wealth of customer data the right way is the key to relationship banking, asserts Joel Pruis, director of advisory services with Carmel, Ind.-based Baker Hill. "Banks own a huge amount of data. They are doing more analysis, but the challenge is gaining a global perspective of the client and the relationship," he relates. "They want to be able to see the relationship in one place. But it's an ideal that's yet to be realized." Noting the siloed nature of banks' systems, Pruis acknowledges that "Unifying all these accounting systems becomes a nightmare."
Baker Hill is attempting to address this problem with its Portfolio Risk Advisor product, which, Pruis says, is designed to help the process along by creating a more unified view of the customer. The solution brings in data from diverse areas of the enterprise, such as the credit card and small business units, so the bank can gain a holistic view of the relationship, he says. "We run rules against the data and bring it to the attention of the financial institution so it can intervene at the appropriate time [in the event of a loan going bad]."
Looking on the bright side, the credit crisis was a good thing in that it "highlighted inadequacies of the monitoring of [banks'] portfolios," adds Pruis. "As they assess what happened, lenders are having a lot of 'Aha!' moments. Look at the positive aspect. How well are you treating your customers? At these times, we can become so focused on the cleanup that we sometimes ignore the ones who are doing well. The crisis has reinvigorated the need for a global view of the clients -- not just their balances, but overall activity and behavior."
This type of combined lending platform is something that Fiserv's customers have been requesting, says Jack Pence, VP, strategic alliances, with the Brookfield, Wis.-based company, who notes that the vendor currently offers a combined servicing platform that services various consumer loans and is developing a combined origination platform, as well. "The key to this," Pence explains, "will be having a decision engine-centric design where you can easily change products and pricing as needed and change the workflows as operations, regulations and legislation are modified."