SAN DIEGO -
The need for outsourcing may be most evident in monitoring security and protecting against fraud, according to Sam Kilmer, VP-market development and research with Harland Financial Solutions. “Technology matters, but this is a people and technology issue,” said Kilmer.
Similarly, risk management, and increasingly credit risk management, are increasingly felt the bottom line. For credit unions, automated risk management tools are spreading into commercial lending. “What we are seeing now from clients is that better risk management is better business,” he said, adding it requires transparency and analysis. “Transparency lets you better examine the risk.”
To date, Harland has primarily offered a commercial risk management product called CreditQuest to bank clients. But as credit unions look to expand and serve the 23 million small businesses in the U.S. they are also seeking similar technology tools to move into automated underwriting, cash management, remote capture and flexible core banking.
What they don’t want, said Kilmer, is separate providers for each of those product lines. Risk management and integration issues have institutions shifting risk, but to fewer providers, he said.
“By moving to fewer providers, when the IT guy calls and says we’re reviewing our providers, we know what that means. It means they are in subtraction mode,” Kilmer observed.
STATS
4% of U.S. institutions change core systems annually
44% of U.S institutions have outsourced core systems
57% of Harland FS 2006 core system sales were outsourced
65% of Harland FS 2007 core system sales were outsourced
SOURCES: Harland FS, Automation in Banking 2007
