Factors contributing to the downfall of the financial industry have been discussed ad nauseam and I suspect will continue to be debated well into the future. While I agree that identifying the root cause is necessary to ensure history does not repeat itself, financial institutions must begin the recovery process by getting back to business and back to basics.

At a time when expense management, client acquisition and retention and risk management are crucial not only to success, but to mere survival in the market, it is ironic that many institutions are shying away from IT investments and reverting to a more manual and, ultimately, more costly and risky methodology.

Throughout the industry, there has been a resounding call to get back to the fundamentals of banking. However, this does not imply reverting back to manual processes, nor does it preclude banks from investing in innovation. What it means, or should mean, is that questionable lending and risky investments must stop and banks need to enable better predictive capabilities to reduce risk by using more sophisticated technology.

In today's financial market, having the right tools to adapt rapidly to changing market conditions, as well as empower every bank employee to provide the best, most personalized service possible (all at lower costs) is essential. Process automation allows banks to do just that — reduce costs while providing better service to their core clientele. If the industry as a whole is going to repair itself and avoid the missteps of the preceding lending environment, efficient lending will have to be priority No. 1.

One could argue that technology was the villain that caused many institutions to make more bad lending decisions than they would have using a manual process, and there is some truth in that statement. However, the foundation of bad decisions is bad policy, not bad technology.

Technology is more accurately described as a vehicle that enables the institution's strategic plan. In the near term, technology and automation are easy scapegoats on which to place the blame of the financial meltdown. However, those institutions that are surviving in the current marketplace and will ultimately thrive in years to come are those that understand innovative technology solutions are the key to enhancing a sound, sophisticated lending strategy.

Think of technology as an accelerator. By itself, an accelerator is neither good nor bad. It simply serves to speed up the condition of the object to which it is being applied. An automated system cannot (and should not) adjust itself.

The system can create a report, but it takes human reasoning to interpret the data from the system, to spot patterns and check that decisioning criteria are striking the right balance between approval and risk. In other words, technology allows you to get where you are going faster, but it should not provide the direction to go.

Strategic IT investment can help banks revitalize their industry and move the economy closer to recovery. Is technology a hero or villain? My vote is definitely hero.