As a senior vice president and the chief information officer at $900 million-asset Olympia, Wash., retail banking unit of Heritage Financial Corp., "I don't have in-house developers," Ms. Welander said.
But she counts among her competitors the big, national banking companies; a Bank of America Corp. branch sits directly across the street from her office. "And when you look at a B of A, a Chase, a Citi, they've all got in-house developers," she said.
"They've got departments to do their research and everything, so they may have more time to bring out four versions and see what's right," she said. "I want to bring out the right thing the first time."
But even if Heritage Bank must take a more cautious approach to its technology investments, she said her overall goal is similar to that of her counterparts who oversee technology at the biggest banking companies.
"We continue to look at technology investments as being able to create efficiencies across the organization," she said.
"Not so much cutting-edge type stuff, but what can help streamline or what can affect our bottom line."
Decision-Making
Given the current state of the economy and the banking industry, Heritage Bank is not planning any major changes for its technology infrastructure, she said. "We're not going out and doing any big, bold things in the next year."
Instead, the banking company is focusing on smaller projects that Ms. Welander hopes will have an impact on the bottom line, because any investment "has just really got to make sense" economically.
Two areas where spending money makes sense now are check imaging and online banking, she said. "One of the things we started this year and we're hoping to continue into the following year is branch capture" of check images — an effort aimed at cutting costs.
This year Central Valley Bank, a Toppenish, Wash., unit of Heritage Financial Corp., installed imaging systems at its branches to convert checks into digital images.
The installation made it easier, and less expensive, to deliver the items to a processing center, she said. "We were flying their work over every night, so installing the technology and being able to transmit work electronically made sense right away."
Heritage Bank is evaluating the savings at Central Valley and is considering using similar technology at its branches.
Ms. Welander said that since last year her company has been testing FinanceWorks, the financial management application that Heritage Bank's online banking vendor, Intuit Inc., rolled out in September.
The application is designed to help people keep track of how they spend their money through online banking sites, and though the current version lacks some of the features Intuit has promised, Ms. Welander said early feedback has been positive.
"One of our employees said that it was scary" to have a detailed look at her finances, Ms. Welander said. "She said, 'Now I know where my money is going.' "
As of September only 60 of Intuit's 1,800 financial company clients were offering FinanceWorks or planning to do so. She said serving as a test bank has given Heritage a head start in rolling out the application.
"I would definitely say that's going to set us apart," she said. "We're the first one in the marketplace with anything like that."
The Economy
Heritage was ready to go in mid-September with a major marketing campaign for FinanceWorks, and the potential lead it delivered in online banking, but the company decided to shelve the advertising when Washington Mutual Inc., one of its major rivals, failed, and JPMorgan Chase & Co. acquired the Seattle company's banking operations.
"With the way the economy is, we have chosen to do some 'Strength in Community Banking' ads, versus doing product ads in the paper," she said. "We are in Washington Mutual's area, and in light of that, we want to make sure we get the word out that we are a strong community bank."
Instead, Heritage customers will get FinanceWorks promotions in statement stuffers and e-mail promotions.
Ms. Welander said the current economic situation has served as a reminder that she must stick to the essentials when requesting her budget for next year.
"Any new things, in my mind, either are going to have to reduce expense, or they're going to have to increase income," she said. "And if I can't show those two things, I believe we're going to have a hard time getting approval."
Even with that pressure, she said, her tech budget "could go up a little bit" next year, though it was too soon to be sure. She would not say the size of Heritage's technology budget.
The Future
Looking ahead, Heritage Bank is considering other projects, if they can generate a return.
After serving as a test bank for the consumer edition of FinanceWorks, Heritage is even more interested in the small-business version that Intuit expects to introduce in December, Ms. Welander said. That version will have features such as payroll and remote deposit, which can generate fee revenue but are not commonly offered to mom-and-pop shops through online banking.
"We're anxious to see more on that one, because that's truly the one that we wanted," she said. "Our expertise is small-business banking."
Heritage is also looking at mobile banking, but it is not doing much more than looking. "I'm not quite sure that it's all the way there yet," she said. "We definitely are interested in it but not ready to jump into it yet."
If she does move into mobile banking, choosing which vendor to work with will be guided by two questions: "What is it that my customers want?" and "Once I find out what they want, what vendor best meets that?"
Virginia Garcia, a senior research director at TowerGroup, the Needham, Mass., independent research firm owned by MasterCard Inc., said technology decisions at community banks are largely influenced by what the big companies are doing.
Despite the turmoil in the banking industry, many community banks are moving quickly into areas like mobile banking, because many consumers have said they want to bank with their phones, Ms. Garcia said.
However, Heritage's emphasis on business customers, paired with the nascent state of mobile banking technology, may make other investments more attractive to the company now, she said. "There's a lot of pressure being put on community banks in certain markets."
As their contracts with their technology vendors near expiration, these banks have an opportunity to weigh their options and determine whether switching to a new vendor will give them an edge, Ms. Garcia said. "You've got contracts that come up for renewal, and it's not a slam dunk."
