New Orleans-based Whitney Bank ($11 billion in assets), which serves businesses and consumers in the Gulf Coast area, is undergoing a major IT overhaul in which 50% of all technology it uses will be replaced or retired. The bank is introducing new technology in its treasury, retail banking, commercial banking, operations, human resources and finance departments (the only business unit not affected is Trust). It is replacing its core banking systems; its human resources, general ledger and reporting applications; and its mainframes and implementing an enterprise-wide service bus to integrate technologies and processes. The goal: improvements in operational efficiency, cost savings and better customer service.
Why make all this investment and change now, while the banking industry is still reeling from the credit crisis and the gulf region yet feels the effects of 2005's Hurricane Katrina?
One answer is that the bank sees opportunity in the wake of the financial crisis and it wants to be well-positioned for when the markets start gaining confidence. "It's a bold step for our leadership to make this investment when times are not so good, to be ready when things improve," says Thomas Limerick, senior vice president, director of strategy and architecture, operations & technology division, who spoke to Bank Systems & Technology in an exclusive interview on Monday.
The IT redesign project planning began around the time that Limerick joined Whitney Bank two years ago. (He previously managed enterprise architecture at GMAC.) The initiative was sponsored by business-side executives who wanted to gain a competitive advantage for the bank by providing better information internally, serving customers better through better information and enabling branch staff and bankers in the field to make their own decisions, Limerick says.
The business case was built on cost savings through operational efficiencies, reducing the number of FTEs required, and lower maintenance and support costs because the number of applications will be reduced. "It was an extremely conservative business case, yet it had a very positive ROI," Limerick says.
The first big decision, made last May, was to migrate to a new core banking system — Jack Henry's Silverlake. That necessitated the replacement of the bank's financial and HR software. The Jack Henry software runs on IBM hardware and databases, so that induced the bank to use IBM's data warehouse, IBM Cognos reporting tools, the IBM Banking Industry Framework (pre-built financial reports and dashboards), IBM Process Server enterprise service bus and IBM i-Series servers. The Process Server will help Whitney Bank integrate Silverlake with its 150 remaining applications.
On Monday, Whitney Bank deployed Oracle PeopleSoft for financials. A new human resources application will be implemented in about three months. The enterprise service bus is scheduled to go live in June and other IBM components will be rolled out through mid-2011. The Jack Henry software is also being deployed in stages with a core conversion planned for early next year.
The bank is also migrating to IBM Power System with DB2 in its data centers in Allen, Texas and Prattville, Alabama. The bank hopes that the IBM Power System will enable it to cut disaster recovery times between its data centers from hours to seconds.