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.Gillis: Raj, tell us how you view the present state of affairs in the bank tech world.
Shivdasani: When I look at the financial services industry over the last few years, and as I look ahead to the next three to five years, I see unprecedented levels of consolidation and convergence. I think everybody sees and understands the consolidation phenomenon. What may be a bit less obvious is the fact that with consolidation, we're also seeing convergence among the banks, savings institutions and credit unions with regard to their focus in the market, products they deliver and approach to technology. And, while there is certainly no one-size-fits all technology or strategy out there today, we do see a common set of business challenges and opportunities that our clients and prospects are focused on. 1. Compliance - We're experiencing unprecedented levels of regulatory activity, and there does not seem to be any end in sight. Some of this activity is good, some isn't. In the end, it needs to make us all better. Not only is the amount of regulatory activity unprecedented, but the pace at which it is impacting financial institutions is unlike anything we've seen before. Financial institutions, and maybe even more importantly, their solution providers, need to be nimble and responsive to ensure compliance. Harland Financial Solutions has been supporting the lending compliance needs of our clients for many years with solutions such as LaserPro and E3. But regulatory compliance touches virtually every system we deliver, from our Encore! Teller and Platform systems to our PhoenixEFE Core System. Our focus on compliance, and the resources we are devoting to achieve it has never been greater, and we know our clients appreciate that. We're all in this together.
Gillis: A few years ago a bank CEO decided to retire early because he wasn't running the bank anymore; the regulators were running it. From what you say, the man is probably enjoying his early retirement even more now. It seems to me that an increased workload for your company, as well as other bank tech companies, is a very good thing for any business enterprise that wants to grow and deliver.
Shivdasani: Our clients would prefer to focus on other issues - developing customer relationships, growing their business, expanding their product and service capabilities - but, regulations are table-stakes for doing business in financial services. We provide the products and services that make our clients' experience with regulations better. 2. Risk management - With the worldwide commercial credit crisis still unfolding, it's more important than ever to have the best risk mitigation tools in place. Gone are the days of disconnected processes, anecdotal assessment of portfolios and thousands of individual spreadsheets loosely forming the basis of financial analysis and underwriting activity. Modern, disciplined risk management best practices dictate unified origination, financial analysis, underwriting, documentation and executive reporting bonded together through streamlined workflow. A unified, relationship-centric view of the customer's financial data and supporting documents with overall portfolio management capabilities are the keys to managing risk at the loan level, customer level and more importantly at the portfolio level. Harland Financial Solutions clients around the world are having success mitigating risk through our CreditQuest solution's approach to end-to-end lending. In fact, it's one of our fastest growing offerings over the last three years.
Gillis: I first heard of CreditQuest several years ago from a de novo bank that was using an FIS core solution. It was his most valuable tech resource. It sounds to me like Harland Financial Solutions is in the best of breed business, supplying ancillaries to users of other core systems.
Shivdasani: It's a bit of both, Art. We have best of breed products like CreditQuest and enterprise solutions like PhoenixEFE.
3. Efficiency - Many of the obvious low-hanging-fruit cost reductions have now been realized by financial institutions. Sustainable cost reduction is now the key to an institution's future efficiency, and in many cases, independence. I believe that one of the most sustainable efficiency moves is derived through the power of integrating applications, data and workflows. Banking is banking. How the service is delivered to customers and the efficiency with which it is delivered is the key to shaping the successful institution of the future.
4. Self-service - Historically, investing in self-service technology has been justified by pointing to the cost efficiency gains for an institution. Electronic channels cost less than brick and mortar. Today, a well executed self-service technology strategy is about more than efficiency. It's about shifting the power of how, when and where to conduct business from the institution to the customer. And that's the key to attracting, retaining and optimizing the profitability of customers both today, and more significantly, tomorrow. These customers demand more than simple debit/credit transactional capabilities from the electronic channels they use. They expect the experience to be easy, fast, end-to-end, safe and even fun. Internet, business, mobile and voice banking need to offer a common experience, tight security, seamless integration with the core (and each other), and the full gamut of services required by the customer - without forcing a branch visit. This is a journey for many institutions, and for many solution providers. Harland Financial Solutions is well down the path of that journey with our Cavion self-service solutions, and we're pleased with the reaction we're getting from our clients - not just because of the efficiencies, but because they know they're doing a much better job of satisfying their customers along the way.
Gillis: I agree with what you say about the demands of customers, but I for one do not think every bank delivers. That's why today, I consider myself a hybrid user, combining the best of each channel while waiting for my bank to reach a level of competence for me to engage.
Shivdasani: That's true, Art. A lot of consumers are hybrid users like yourself. It's important to make each customer experience with the bank, regardless of the delivery point, a great one! 5. Customer retention and acquisition - Top performing institutions consider both of these categories to be synonymous with opportunity. I've talked about integration being not only the key to efficiency improvements, but also the key to improving the client and employee experience. With a business intelligence system, like an MCIF, a financial institution has a very effective tool designed to drive targeted direct mail campaigns, on-boarding programs and research projects. Our Touché Analyzer clients have been driving those kinds of programs for over 25 years, with consistently positive results. The last few years have seen the traditional MCIF system "liberated" from the back office, by becoming tightly integrated with both the electronic and traditional delivery channels. Harland clients have experienced both the retention and acquisition benefits of this integration, with data being exchanged, for example, between our Touché Analyzer MCIF and Encore! Teller and Platform systems.
Gillis: I can't resist this comment even though by now everyone has heard it. My bank assigns all the glory titles to my accounts, even though most of them are cats and dogs, working for my benefit not the bank's. But when it comes to the Big One (wealth management), they beg off with "Oh, that's out in Plano." Doesn't technology transgress physical boundaries? Am I an orphan customer if my bank chooses to slice its lines of business based on cost centers rather than customer centric attributes?
Shivdasani: Art, that's exactly what modern systems like PhoenixEFE are designed to address - a single relationship view with integration from all customer accounts - providing a better experience for the customer and for the financial institution that serves them.
The last two years have really tested the financial industry, and those that serve it. With increased regulatory burden, economic uncertainty, and earnings pressure, many institutions have questioned whether or not they can afford to invest in the technologies necessary to address the issues above. The institutions that plan to thrive and grow during these times have determined they can't afford not to.
Gillis: Thanks, Raj. It was great to see you again and to get wisdom from a respected colleague, and if I might add, one heck of a decent guy.
Raj can be reached at: Raju.firstname.lastname@example.org