There is no doubt, banking as we once knew it is undergoing an incredible transformation. The silos once segmenting financial institution charters are now being demolished to make way for a converged world of banking. This convergence has led to a newly expanded and more prominent role for core processing that extends well beyond processing transactions and into a role that blends customer relationship management, innovation, integration, and channel connectivity. Today’s core processor is a strategic partner with your bank, acting as an extension of your infrastructure and staff.

Changing Landscape of Industry
It is no secret to any banker that the competitive landscape of the financial industry is rapidly converging. Banks, credit unions, savings institutions, mortgage companies, finance and brokerage firms are now all going after the same market, offering similar services. Even the non-banking giants are pushing the boundaries of separation of banking and commerce. The blurring of service offerings makes it imperative for your bank to be able to deliver non-traditional product offerings in order to remain relevant.

This trend is being driven by consumer demands for the means to take control of their own information and engage their financial institution on their terms. In this environment, it is the bank’s role to bring together the financial tools and products that the customer wants into a consistent and convenient view across all of the delivery channel(s) of their choice.

Expanded business banking represents a major opportunity for many banks looking to accomplish growth objectives; as evidenced by small business’ desires to have products and services that were once reserved for larger entities – including cash management services and remote deposit capture. This puts the power and control into their hands with the tools for cash management, convenience of deposits, and availability of funds. In turn, this helps banks attract new customers and grow profitable relationships.

The evolution from simply processing transactions to becoming the foundation for an extended financial enterprise is the next chapter in core processing. This strategy calls for the creation of a solution that seamlessly connects all channels and payment systems to an integrated processing system that renders retail, commercial and mortgage banking on a relational repository (database). Connecting seamlessly to other core repositories for products and services like credit cards, investments and insurance, this solution renders one view of the total customer relationship and one view of the entire operations of the bank. This is about more than just software; it is about services to assist banks in utilizing tools to enhance positioning regarding: competition, customer retention, market share, margins, productivity, efficiencies, and more.

Expanding and Integrating
Tighter competition created by the converged financial industry has led to increased focus on retention and profitability. This drives the need for the ability to offer extended services, as well as a renewed focus on integrated Customer Relationship Management (CRM) systems.

In this new world, customers range from low balance to ultra high net worth individuals; plus, commercial enterprises ranging from the micro / mom & pop to the multi-nationals. The question financial institutions’ need to address is: “How are they attracting, acquiring and retaining the appropriate segment of the market they can serve?” No longer can they afford the shotgun approach, but rather need the tools to rifle into the appropriate market segments and differentiate themselves from the competition.

To accomplish this, the core solution today needs to have an integrated CRM system. What’s different from the CRM systems of the past is banks are now seeking CRM solutions that are integrated with the core, into one common system—allowing for the real-time, holistic view of customer, accounts, transactions, and contact information to retain customers, as well as drive new business.

Leveraging Capital Investments
Undoubtedly, when looking at the long list of challenges associated with the changing financial industry, banks may feel a bit overwhelmed. Is it possible for the financial institution to offer the necessary products and services, integrate all technologies into a converged system, keep up with the heightened regulatory scrutiny and still manage to maintain positive and profitable relationships with customers? The answer for many financial institutions is to outsource these challenges with a trusted partner.

Through outsourcing, many banks have found that they are able to leverage the advances now available in the marketplace without having to manage them. Outsourcing itself has extended far beyond having a vendor process the nightly update—to a true relationship built on a trusted advisor role. By having a partner they trust providing them guidance on technology, security and services, they are now afforded the luxury of being able to fulfill the same need for their consumer.

Summary
Harland Financial Solutions views the extended financial enterprise as a powerful framework by which a financial institution allows its customers to design their own personal preferences for how their financial institution provides transactions, interacts and advises both them and other financial institutions with which they have chosen to interact. In other words, it turns some of the levers of “relationship management” control over to the consumer.

In this newly converged financial industry, banks are in a unique position to capitalize. They are at the center of the current payments infrastructure providing tremendous advantages in establishing an extended financial enterprise for their customers, and maintaining their position as the consumer’s primary financial institution.