SAN ANTONIO -- When John Furrow applied for membership in the National Association of Bank Servicers 16 years ago, he was denied on the grounds that he was employed by a bank-owned company.
"They thought unfair practices existed [among bank-owned data processors]," said Mr. Furrow, who is now a vice president for customer support at First Integrated Systems, the data processing division of First National Bank of Omiha. "All the members had to be independent processors."
But in these fast-changing times of increased competition and rapid-fire acquisition - as much in computer services as in banking - a trade association cannot be narrow in its vision.
Executives at the 22-year-old group that represents computer service providers to the financial industry took note of these seismic shifts. Renamed the Association for Financial Technology, it is facing the future with a more open membership policy and broader-based mission.
Mr. Furrow personifies the changes.
After being rebuffed in 1978, he appealed to the general assembly and was accepted for membership that same year. Since then, he has played a central role in the trade group, rounding out a oneyear term as its president last week at a conference here.
"There's been a more progressive attitude, we're breaking down barriers," he said. "It's been a gradual progression, but the industry's changing and we have to change too."
The lines separating banks, thrifts, and credit unions, and even their nonbank competitors, has been blurring, Mr. Furrow pointed out. An organization that wants to reflect and serve that market, and help its members benefit from it, must also recognize the impact of competition and expand its horizons.
The association currently has 64 member companies, many of which joined relatively recently. They represent a broad spectrum of servicing industry players both big and small, from large outsourcing outfits like M&I Data Services Inc. and Electronic Data Systems Corp., to smaller players like CFI ProServices Inc., which specializes in compliance software.
All told, the association brings together the most respected companies in an increasingly tough and diversified business. To keep up with the times, it has moved not only to reflect that diversity, but also to put forth an agenda that will help the members navigate through uncertainty.
"We're trying to expand into the financial services business, to reach out to credit card processors and shareholders services groups," said newly elected president Bobby Jones, a senior vice president at Bisys Group Inc. "We're moving away from being a little clique."
But as Mr. Furrow noted, the original, small, close-knit group of independent core-processing companies did not metamorphose overnight.
First, in 1978, representatives from bank-owned data processors were given full voting and member rights.
A few years later, the group opened its doors, in a limited way, to more peripheral servicers - those who supplied software and other noncore services to banks. In the beginning, these associate members could make up only 20% of AFT's total membership and were not allowed to vote or sit on the board.
Jerry Weiner, chairman and chief executive of Interactive Planning Systems Inc., which supplies software through service companies and to banks directly, became an associate member 11 years ago - about a year and a half after founding the firm. Although the association at that time was still dominated by the traditional core processing set, the bank servicing community was already well on the way to reshaping its market.
Mr. Weiner noted that one of the industry's boldest and fastest growing players - Fiserv Inc. did not even exist at that point. Electronic Data Systems Corp. was not nearly the power it was to become with the trend toward outsourcing among the major banks.
"The organization began to realize that we had something to contribute," Mr. Weiner said. "They [core processors] weren't everything the bank needed."
The second-class membership status ended about four years ago, Mr. Weiner said, when associate members were granted full voting rights and privileges.
He attributed this progressive opening, m part, to the growing importance of PC-based systems and their influence on the servicing industry.
Indeed, Mr. Weiner says that when he gave a presentation on personal computers at a National Association of Bank Servicers meeting in 1986, the prospects of this technology "wowed" the more conventional service executives.
The association has provided a fairly candid sounding board for its members internally, and has - through its committees launched campaigns to ease regulations and generally improve the business environment for bank service companies. For example, a member at a recent meeting encouraged his counterparts to review some existing patents that may infringe on their businesses.
The trade group has also provided a "happy hunting ground" for its members to forge alliances and discuss potential acquisitions with each other. according to one member. In an industry that is rife with gossip and deal-making, this group is a hot spot.
But the group's primary focus remains educational - the exchange of ideas among members.
During conferences, the group holds "interactive sessions" wherein members can put forth any number of topics for discussion and receive feedback from colleagues and competitors.
Stopping short of divulging major competitive intelligence, participants confront subjects ranging from liability limitations in outsourcing contracts and customer report cards to audit processes and emerging technology concepts like data warehousing.
"It keeps us current with the market and business trends," said Mr. Weiner. "Clearly, if we want [our systems] to be distributed by other servicers, we should have some empathy for their business."
