Management Strategies

02:05 PM
Lisa Valentine and Patrick Ruckh, CTO, First Tennessee Bank
Lisa Valentine and Patrick Ruckh, CTO, First Tennessee Bank
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Supporting the Front Lines

First Tennessee Bank ($36.6 billion in assets), part of First Horizon National Corp., boasts that it has one of the highest customer retention rates of any U.S. bank.

First Tennessee Bank ($36.6 billion in assets), part of First Horizon National Corp., boasts that it has one of the highest customer retention rates of any U.S. bank. Perhaps part of the reason customers keep coming back is because First Tennessee's relationship managers are empowered with the information they need to serve the bank's customers. As a result, Patrick Ruckh, the bank's CTO, tells BS&T that getting information to the employees who are directly in touch with customers is the No. 1 priority for First Tennessee's IT department.

Q: What's your professional background?

Ruckh: I've worked in a lot of different industries. I was drafted into the U.S. Army during the Vietnam War, and when the Army found out that I knew something about computers, they put me in data processing. I've also worked for a chemical manufacturer, a retail distributor and a data processing services firm.

Since 1974, I've worked in financial services. I started with First of Denver, which eventually became First Interstate Bank [Billings, Mont.]. I went through three company changes and never moved my chair. I was with Bank of Hawaii Corp. [Honolulu] for six years, UMB Financial Corp. [Kansas City, Mo.] for five years, and I've been with First Tennessee for five years. At this point in my career, I consider myself a financial executive who happens to know a lot about IT.

Q: What are your current responsibilities as CTO?

Ruckh: Although my title is CTO, my job responsibilities are more like a CIO, and I'm not as technical as my title would lead you to believe. First Horizon doesn't like the title of CIO because they believe that information is everybody's business. In my current role, I'm responsible for ensuring that the IT strategy matches up with the company's business strategy. I'm also responsible for ensuring that our data is secure and available at the point of sale, and that we have the infrastructure in place to deliver information economically.

Q: How does the front line fit into your IT strategy?

Ruckh: The front line is where the action takes place, and our strategy is to deliver information about our customers and our products to the point of sale. We want our relationship managers to be able to help customers make the right product decisions and to make it easy for them to sell and service those products. We believe that whoever the customer is talking to is the most important person in the company.

Q: Are there security risks associated with delivering sensitive customer information to the front line?

Ruckh: Security is actually more challenging when information leaves the company. For example, we've got to convince customers that two-factor authentication mandated by the FFIEC is in their best interest. Encryption and authentication obviously is a big issue for us. We've been working on two-factor authentication and are trying to determine which method will be the least intrusive to our customer and still do what's right from a security perspective.

Q: What are the most important technology initiatives that you currently are pursuing?

Ruckh: The "All Things Financial" dashboard is probably our most important technology initiative. This dashboard is our delivery mechanism for supplying our 13,000 employees with information about our customers and our products at the point of sale. We are developing the dashboard in-house using Web services. To manage the dashboard, we are pushing Citrix Systems' [Fort Lauderdale, Fla.] Citrix Access Platform out to all our branches. Citrix will enable us to roll out new software from the home office to all 13,000 PCs rather than having to touch each machine individually. That will save me about $5 million.

Also, we've purchased a company called MSAvers [Kansas City, Mo.] that provides health savings account products and services for insurance companies, and we're in the process of interfacing MSAvers to the bank systems.

Q: How does service-oriented architecture (SOA) fit into your IT environment, and what benefits do you expect to achieve?

Ruckh: For us, SOA is a journey that is a few years under way, but we've still got a long way to go. We purchased FuegoBPM from Plano, Texas-based Fuego [which recently was acquired by San Jose, Calif.-based BEA Systems]. We also are using Glue from webMethods [Fairfax, Va.] to create interfaces with our legacy systems.

FuegoBPM provides more than an SOA platform. It also provides business process management, allowing you to simulate a process, see how the process will work, and then allow the coders and the business analysts to communicate effectively. FuegoBPM generates some of the code, although the coder still needs to bring in the SOA objects. It also generates models for tracking statistics and service levels.

The biggest benefit of SOA is reusability. But the biggest benefit our business units will see is faster time to market and consistent delivery across all our sales channels.

Q: How is your IT budget shaping up this year?

Ruckh: Our budget will remain about the same, so it will be imperative that we focus on what is most important to our strategy. We'll put more emphasis on governance and making sure we're working on the right things.

Q: What about the impact of Basel II?

Ruckh: First Tennessee is not sure if we are going to opt in yet, but we are making sure that we are not doing anything that would preclude us from opting in.

Q: What will drive growth at First Tennessee in the coming year, and how does technology support that?

Ruckh: Historically, we've sold our banking products only within Tennessee or possibly the surrounding states. However, we have launched a national strategy to fuel growth. We've begun either opening or purchasing banks in Virginia, Georgia and Texas, and we've identified that we want to enter Washington and Arizona.

We are leading with our mortgage product, which is available in 43 states. Our strategy is to leverage that significant customer base in those states and sell them our banking, wealth management, trust and small business products. In terms of technology, the two most important challenges are to support the national strategy and expense control.

Q: What kinds of organizations -- financial institutions or others -- do you view as your key competitors?

Ruckh: We don't really worry about our competitors. Our job is to execute on our strategy. We believe that if we execute on our strategy, there won't be anybody just like us.

Q: What role does outsourcing play at First Tennessee?

Ruckh: We do a lot of outsourcing; I would say that about 30 percent of my IT budget is outsourced. We don't believe that we do everything the best, and when we find someone who can do something well -- and if it's not a core competency of ours -- we are more than willing to let someone else do it. I don't own any mainframes, but most of my accounting systems are mainframe systems. I've outsourced all the day-to-day operations to Fidelity National Information Services [Jacksonville, Fla.]. They run the operations, but I keep the responsibility for system development for systems such as Computer Sciences Corp.'s [El Segundo, Calif.] Hogan and Fidelity's Advanced Lending System (ALS) in-house. We also outsource our credit card processing, and IBM [Armonk, N.Y.] handles much of our core networks. **--Lisa Valentine

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