WASHINGTON-The same day consumers watched the Dow Jones index plunge 513 points, they received a sobering reminder from Raju Shivdasani that the U.S. economy is on a very slow road to recovery.
The president of Harland Financial Solutions shared that message with 1,300 attendees at the company's 2011 Connections Annual Conference in Washington, and then quickly focused on what financial institutions should be doing to make it through the choppy waters.
"The challenges of 2008 and 2009 are not going away soon. I said last year the economic volatility will be with us for a period of five to seven years, and this year has not changed my opinion."
Shivdasani pointed to the state of the mortgage market, continuing high unemployment, and slow GDP growth. "We are facing a time in which economic recovery will be sluggish, regulatory oversight will be great, and more consolidation will be happening in the financial industry."
What banks and credit unions need to do, stressed Shivdasani, is manage risk effectively, increase efficiency, stay current with regulations, build and nurture customer relationships, and deploy smart sourcing.
As FIs manage risk, Shivdasani believes there is significant room to improve lending efficiency, suggesting that many financial institutions have very fragmented and costly loan systems. Shivdasani urged attendees to see how they can manage risk effectively through the use of more streamlined, automated lending processing and decisioning tools.
Banks and credit unions, too, said Shivdasani, can improve how all of their systems work together, observing that the days of running "20 to 30 disparate systems must be over." The first step, Shivdasani said, is starting with a sound base---a solid core processing architecture and framework.
Finally, outsourcing must be given greater consideration, not only placing certain processes in the hands of those who have more expertise and can deliver the service more cost effectively, but to also to allow the credit union more time to focus on important strategic goals rather than daily processes.
Harland is based in Lake Mary, Fla.
