Downing's thinking on IT performance and efficiency has been heavily influenced by one of his former bosses, Austin Adams, the former CIO of J.P. Morgan Chase. "One of the things Austin taught me [is that] every year you should be 5 to 7 percent more efficient than you were the year before," Downing says. "If you're not, you're telling me you're not smarter today than you were, [and] what are you doing?" Accordingly, Downing shrinks his IT budget every year. Even if an acquisition or development of a new product requires an increase in IT spending one year, "In the second year we'd better figure out how we're going to leverage that [increased] volume to lower our unit cost," he says.
Finding these efficiencies is less about implementing technology or automation tools and more about improving processes, according to Downing. "We get more efficient, we get smarter, we stop paving the cow path, we work on straight-through processing -- all simple stuff," he emphasizes. "We don't go to the automation first. It's all about understanding your businesses, taking out redundancies, ... and then applying good technology and management to it.
"I don't want to have more people, and I don't want to have more money on an ongoing basis," Downing continues, "because if that's the case, it looks like I'm building an empire, and I shouldn't be doing that. I should be more efficient -- doing more with less -- every year."
Not surprisingly, innovation is not an end in and of itself in Downing's organization. "I would not call us bleeding-edge," he says. "We're fast followers." This has not prevented First National from excelling in critical areas such as Internet banking or payments (specifically, a national cards business, both acquiring and issuing). But for Downing the priority is for these offerings to be reliable, efficient and secure -- just like the railroads or even a utility, another analogy he cites frequently.
"The best thing ... is that people don't know we're there," he says. "We try to keep a low profile, like the electric company. The lights come on -- they're supposed to come on." It should be no different when a check is processed or a card transaction occurs, he adds. Similarly, with Internet banking, "[Customers] expect that mobile banking will work, but they don't necessarily care how it works," Downing points out. In fact, he concedes, an interactive "branch of the future" that First National launched last year probably was "a bit ahead of our marketplace."
One way that First National has been able to accomplish this dependability on a consistent basis has been through an unusual organizational structure in which "We've put the operational groups and technology groups into the same work units," Downing says. For example, he explains, "The manager who manages ACH/wires manages the operating piece as well as the technology piece. It's a different way of looking at things, and it's been very effective. It's the collaboration between the technology people and the operations people -- the people who have to face off and do the work every day -- all reporting to the same manager. You brush away a lot of territorialism and egos." He credits this arrangement with such successes as the bank’s enterprisewide conversion to image capture in only two years and the move to an image-based day-two process that was “finished ahead of time and ahead of schedule.”
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio