Chief information officers, facing increasing demands to improve efficiency, are getting more deeply involved in discussions that go beyond back-office technology.
Their roles extend to having regular meetings with sales teams and even clients to see firsthand the needs of each end user.
"I can't prioritize unless I've built relationships with my lines of business," said Angelo Valletta, a senior vice president and CIO of Sun National Bank, the $3.3 billion-asset subsidiary of Vineland, N.J., bank holding company Sun Bancorp Inc.
Valletta spoke Wednesday with two other bank CIOs and a retired bank executive on a panel at research firm Novarica's Retail Banking Distribution Technology Forum in New York.
In many regards, the concerns about driving efficiency are not new, said Bill Scales, who held executive technology positions at Bank of America Corp. and PNC Financial Services Group Inc. before retiring in 2009.
However, there are new concerns over how to use technology to protect banks' shrinking revenue streams, which are under threat from new regulations and a tough economy.
"They're concerned about how they can help stay that loss of customers," Scales said, adding that part of revenue protection is "keeping what you've got and getting more of it."
Although bank earnings have improved, that is due in large part to loan reserve releases spurred by improved credit performance, noted Dave Kaytes, a co-chief executive at the New York management consulting firm Novantas LLC, which owns Novarica.
The ability to generate new revenue will be a nagging problem for banks because the Consumer Financial Protection Bureau, which will have control over consumer finance products, just took effect on Thursday and new global capital requirements have yet to kick in.
"This tsunami is still somewhere out in the middle of the ocean and working its way toward us," Kaytes said in a presentation before the panel.
For Valletta, looking beyond his bank's computer systems is second nature. In addition to wearing Sun National Bank's chief technologist hat, he is also in charge of the bank's automated teller machine and merchant services businesses.
"We ask to go out with our line of business executives to client [meetings] because we want to understand" what their needs are, Valletta said. "It allows us to really … understand what are the pain points of our true customers and be able to build systems accordingly that relate to our strategic plans and our operating plans."
Howard Stein, the CIO of Graystone Bank, part of the $2.6 billion-asset Tower Bancorp Inc., said going to branch sales managers' meetings is a regular part of his and his nine-employee IT staff's duties. (In June, $13.8 billion-asset Susquehanna Bancshares Inc. announced plans to buy Tower Bancorp for $343 million.)
The team is constantly evaluating "what types of things can we do … to enable the sales force to go out and capture those new clients and also service our existing clients," Stein said.
Stein's job is also increasingly focused on wringing costs out of the bank's operations.
"Paying attention to the efficiency side is really my role at the bank and looking at every expense scenario that comes across," Stein said. "I review a lot of the bills that come into the bank."
While CIOs are under pressure to scrimp and save on technology systems, some institutions have outgrown existing infrastructure, prompting the need to invest in new software.
Such is the case with Team Capital Bank, a $721.4 million-asset bank based in Bethlehem, Pa., that was formed in 2005.
When Team Capital started, it relied on a core processing system from the vendor Fiserv Inc.'s ITI product line that left little room for customization, said Ghan Desai, the CIO and chief technology officer at Team Capital and a former technology vice president at PNC.
The system worked well for Team Capital in the beginning. But as the bank started to grow it decided it needed a more flexible core system that it could customize to meet its needs.
"We bit the bullet and realized the vendor that we had wasn't working out because it was a bank in a box," Desai said.
"Instead of going with the best of breadth technology, now we're in a position" to go with "best of breed," Desai said.
Team Capital finished migrating to the vendor Open Solutions Inc.'s DNA core system in February, Desai said after the presentation.
Team Capital's growth has also prompted the bank to focus more on its enterprise risk management program and its compliance and credit risk measures, Desai said.
