ABA Banking Journal - July 2008 - (Page 43)

Tech topics Getting IT right by thinking it through I n April, at ABA’s The Great Exchange Conference in Baltimore, Ken Proctor, director of risk management, Brintech, gave a well-attended presentation, Bank Trends in IT Implementation and Risk Management. With sly humor, the straight-talking Proctor offered his take on technology trends. He cited the popularity, among urban banks, of spending on the internet, and noted that, among all banks, spending on branch automation had become a priority. Retaining deposits, attracting new business customers, and boosting productivity with IT remained significant objectives among the community bankers polled in the research Proctor referenced. The consultant also zeroed in on some basic issues about how systems actually get purchased. One key theme: It’s important to choose vendors based on how their wares will contribute to business objectives. It’s a common-sense message that resonates at a time when C-suite officers are asking middle managers to be especially accountable. Here, we ask Proctor about alignment, risk management, and smart IT planning. Business executives tend to want to put an order in for a system and get it fast tracked. But they have to think about corporate issues — Ken Proctor working this way involves some tough negotiation. Sounds like you would advocate a more centralized approach, one where a committee would vet a request for a system. PROCTOR Not necessarily. Not centralized as in—“IT decides. Or, people who don’t touch the system decide.” Because, from what I’ve observed, many business unit personnel know what they need a system to do and for that reason must have input. (Sometimes, executives aren’t sure why they are buying a system. Maybe they’ve responded to a sales pitch and get stuck on a fast moving train—a different problem.) But, again, I do think it’s important to purchase a given IT system with a full set of considerations, including if it’s really needed or cost justified given its expected use by employees or customers. You also need to consider how well a given application will affect security. In the presentation, you also spent time talking about operational risk more broadly, including IT-related risk management. When you work with customers, how do you get them started in their risk analysis? PROCTOR There are so many misconceptions about risk management that I consider getting my clients comfortable with the terminology my first task. In the banking business, people asked to think about a risk management program tend to think first of credit risk. Or, they think of purchasing insurance to hedge certain types of risk, or they think of hiring a security officer, or they think of adopting internal controls. And, quite frankly, risk mitigation in that sense is so far down into the weeds. Moreover, trying to work this way is attempting to solve a problem that hasn’t been clearly defined with a “silver bullet approach” that’s been randomly defined. You’re not going to get ideal results that You often hear that it’s important “to gain alignment between the business and IT departments.” Why is such coordination of objectives and efforts still such a challenge a full decade after the great tech bubble of the late ’90s? PROCTOR It’s interesting. From what I’ve seen, part of problem is that business and IT personnel don’t fully trust the other. While the two sets of employees are more likely to share information than ever before, each group tends to be unfamiliar with the expertise of the other. That lack of familiarity makes it hard to exchange meaningful information. Besides, business executives tend to want to put an order in for a system—or application—and get it fast tracked. They want to keep the ROI analysis straightforward—what will work for my group and what will affect my costs in the short run. The IT guys tend to think about the broader corporate perspective and other issues, including how a given system will integrate with the existing infrastructure. On the other hand, IT guys might not always consider factors like usability or familiarity of an application or vendor. They’ll wave their hand and say, “Why do they want that for?” Basically, there’s room for both sides to contribute, even though By Lauren Bielski, senior editor ABA BANKING JOURNAL/JULY 2008 43 http://www.brintech.com

Table of Contents Feed for the Digital Edition of ABA Banking Journal - July 2008

ABA Banking Journal - July 2008 Contents Editor’s Column Searching for New Paradigms at BIS Snapshot: C&I Asset Quality 100th Anniversary: Then & Now BofA "Event Concept" Wins Awards, and Customers ABA Resources ABA Chairman’s Position M&A: Beat Today's Market Blues Pass the Aspirin Cover Story: Workout Time Correspondent Banking: No Longer Just a Handshake Business Getting IT Right By Thinking It Through Webnotes Are You "Red Flag" Ready? Mailbox Banker’s Mart To Advertise/Index of Advertisers The Economy

ABA Banking Journal - July 2008

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