Mid-size banks need help from their vendors with a fundamental IT problem, says Inder Koul, CIO of First Niagara: They need their software to play better with others.

"When we implemented our mobile solution, we had a tough time integrating with our legacy infrastructure," says Koul, who shared his remarks with an audience made up largely of technology vendors at American Banker's FinTech 100 breakfast at the BAI Retail Delivery conference this week. "We were providing basic functionality, table stakes." When the bank did launch mobile banking, 30% of its online banking customers signed up right away. "There's so much pent up demand in mobile in the customer base," Koul observes.

Many small and mid-size banks are operating with an IT infrastructure that's ten to twelve years old, Koul notes. "And until 2009-2010, there was a tendency to buy point solutions or 'do special projects.' That's when you have a very narrow problem and buy a point product to solve that problem, without regard to your larger infrastructure. We're putting very sophisticated products on top of this creaky, ancient platform."

These banks are driven to rush new capabilities, such as mobile banking features, out the door by regulatory and customer expectations, he says.

But the point solution strategy is bad for small to mid size banks, he says. "They can't afford to do it, because the cost of implementation and the cost of innovating on top of that is too much — we're not in the software development business.

"We want those products to be holistic, help us with that," Koul said to the vendors. "You need to have a very simple integration model, whether that's how you're going to integrate multiple projects or just customer interactions across channels."