Bank: First Federal of Bucks County
Problem: The bank wanted a new core system with modern architecture and intuitive interface.
Solution: Swap a platform controlled via command lines for one with plain-English drop-down menus.
First Federal of Bucks County, a 10-branch community bank in the easternmost portion of Pennsylvania's side of the Delaware Valley, was reaching the end of its contract for outsourced use of Open Solutions' TotalPlus core banking engine and wanted an upgrade. The legacy system had done its job since 1994, lately enabling the bank to provide customers with real-time online banking. (Open Solutions acquired TotalPlus from Bisys in 2006.) But the system required more command line expertise and coding knowledge than First Federal's new management felt incoming employees could successfully handle, particularly under the bank's new mandate to expand commercial lending.
First Federal, of Bristol, Pa., wanted a system that could support "true" real-time, online banking managed from an interface personnel could understand and use with little training, underpinned by an uncluttered architecture in which data could be exchanged more directly, and therefore rapidly, so adding new products and modifying existing services would be easier.
First Federal narrowed a short list of five core providers to three, and then to two following solution demos, whereupon First Federal made on-site visits to other banks to see the remaining vendors' wares in action. The bank signed a contract in September to use Open Solution's DNA.
The platform requires no coding or command line skills, says Karen Shinn, First Federal's senior vice president of operations. If a bank administrator wants to make a change to the DNA system, he or she simply chooses among options written in plain English and available in drop-down menus. Plus, all data in DNA is written to and pulled from a single database. Whereas, Shinn says, TotalPlus and the core systems of the two other vendors First Federal analyzed are built on older architectures, so that more data resides in product-specific silos, requiring increased data management.
"All three vendors stated they're online real time, but there are some nuances in there," Shinn cautions. "We poked around during due diligence to see if they were really online real time, or batch memo-post. And we saw some gaps in the competitors along that long path from when a customer walks into the bank, to that transaction getting to the general ledger, where we felt it wasn't truly online real time. With these older legacy systems, they're putting newer front-ends on: At some point during the transaction you're going to hit some older technology, which will not afford you true online, real-time processing. These vendors will say they are real time, but they'll also tell you what the work-arounds are." Shinn did not want to publicly identify the two other vendors, but both are well-known core providers.
Shinn strongly advises banks assessing core providers marketing real-time capabilities to make multiple on-site visits. This includes frequent follow-ups with colleagues at other banks during which executives "leave the salesperson at the front door," she says, so information technology can ask pertinent, sensitive questions to ferret fact from fiction so the nuances of what these systems can do are fully understood.
Shinn says TotalPlus is indeed online real time - checks deposited at the teller at First Federal are "killed" at the counter, meaning they're processed immediately with available balances (minus holds) reflected online, versus reconciled later. But ensuring TotalPlus continues to work this way requires more effort than the bank is willing to expend.
"TotalPlus is very robust; it does everything you want it to do," Shinn says. "But TotalPlus is an older, legacy system predominantly driven in older code and layers of information we have to drill down on. To get a seasoned TotalPlus system to do what you need it to do depends on how well you master the command lines and the layer of records and integrations. So maintaining and running that with new tellers coming in is very tedious and time-consuming. And the available talent to run this type of system is almost nonexistent."
DNA "has one database where the entire customer portfolio resides," Shinn says. "And it's in English; it's not driven in code."
DNA will be hosted for First Federal at Open Solutions' data center in Cherry Hill, N.J. The bank expects to fully convert to it early in 2013, but will spend much of 2012 working with Open Solutions to remap its products and processes over to the new system, and edit its customer information file so each client is identified by a single name. The idea is to maintain a clean, centralized database that everyone can use to process transactions and cross-sell using standardized data.
