Open and Integrated Solutions Deliver Actionable Information

Jeff Whelton, Harland Financial Solutions
December 10, 2004

Former Supreme Court Judge Oliver Wendell Holmes (1809-1894) once said, “I would not give a fig for the simplicity this side of complexity, but I would give my life for the simplicity on the other side of complexity.” Data and actionable information may both be thought of as simplicity on either side of complexity. The complexity in the middle includes system integration, business intelligence tools, intuitive user interfaces, and ubiquitous access.

A significant portion of technology dollars are spent on capturing data and returning the same data unchanged. While this is unarguably important and includes data such as what transactions, when, for how much, by whom, etc. it does not point out the potential problems or opportunities that information can provide. The complex process in the middle of getting from data to information includes open technology, integrated solutions, a clear vision, and strong vendor partnerships.

The first step to reaching the other side of complexity requires that your systems interact with each other. As such, there is a need to explore interfacing versus integrating systems and the open technology to make that happen.

Integration versus Interface

Simply put, an interface between two systems makes data available from one system to another. In many cases interfaces are one-way, for example from an application to the general ledger. A slightly more advanced interface will pass data both directions. For example, applicant data is pulled from the host system to populate a loan application and the resulting approved loan data is written back to the general ledger. An interface keeps data from having to be manually reentered thereby achieving ROI.

Integration goes beyond simply passing data to enforcing business rules and performing transactions between systems. For example, a teller enters the loan amount, term, etc. in the teller platform, which then requests a transaction to be performed on the loan origination system. At the same time, the relationship-pricing engine ascertains that the applicant should receive an additional discount on the requested loan. The discount is sent to the loan origination system for inclusion where an automated decision is made and the results are returned to the teller. The applicant gets the deserved price and a timely response to their needs while the financial institution achieves ROI through increased ability to offer products and services in a timely manner. This also serves as an example in the difference between data and information. The applicant’s contact information and desired product are data while the application of relationship pricing is information.

One might also argue that single sign-on and similarity of look, feel, and commands between the two systems exemplify full integration. Increased efficiency and reduction in training costs from this level of integration cannot be denied. This is sometimes available when buying suite applications from a single vendor but there are many hurdles to achieving this goal with a best in class approach. For example, single sign-on typically comes at the cost of expensive and specialized third-party integrations such as biometric access to multiple applications. However, if all of the applications are web services-enabled, such as between Internet banking and a bill payment vendor, single sign-on may be more readily achieved.

Obviously there is a myriad of possibilities in the level, or lack thereof, of integration between systems. The point is that technology solution providers should be held to a higher standard of enabling integration through open technology to ensure that the financial institutions can achieve the desired ROI.

Open Technology

Use of closed or proprietary technology will not allow you to achieve full integration and therefore will not allow you to achieve maximum ROI through the creation of actionable information. Whether developing an interface or truly integrating systems, programmers use one of three tools including hard coding, APIs and web services. Hard coding is a programmed interface specific to the application, i.e. a one shot deal that cannot be used to integrate additional applications. APIs, short for Application Programming Interfaces, are vendor specific descriptions of what data is in what field and how it is structured (field length, type, etc). APIs are an improvement over hard coding in that they can be provided to multiple third parties that can then interface to them.

True web services expose data like APIs but also support the business rules put in place by the application that exposes those services. To put it another way, with web services your balance requirements, fees, flags, freezes, etc. are enforced meaning that the third-party application being integrated does not need to replicate those rules. Let me repeat, “The third-party application does not need to replicate those rules.” Few, if any, applications that you would want to integrate duplicate the rules of the initial application let alone the challenges of keeping the rules consistent between the systems.

Web services should also allow you to define additional data objects that meet your needs. For example, you have the ability to not only pull raw data, but also pull calculated data. For example, someone can define an object called Total Direct Deposits Month to Date and it can calculate the total deposited amount based upon the raw data in the database and output it. Frequently an application that you intend to integrate may not be able to do anything with the raw data and therefore benefits are only achievable through the use of defined data objects.

One more note on web services is about the use of standard protocols such as hypertext transfer protocol (HTTP), Interactive Financial Exchange (IFX), Simple Object Access Protocol (SOAP) and eXtended Markup Language (XML). By using standard protocols there is a wider availability of programmers who can help build, maintain, and repair interfaces in the future. By ensuring that business rules are met, the creation of data objects is allowed, and the need for specialized programming skills is minimized, web services helps to create actionable information, and therefore ROI, not available with hard coded interfaces or the use of APIs.

One View

Not everyone values the same information and therefore systems that deliver information will differ by constituency. While smart financial institutions fine-tune these constituencies into very targeted groups, from a systems perspective they essentially fall into three categories including members or customers, employees, and management. Providing One View™ of all the information relevant to each constituency is the ultimate goal. Data must be integrated from numerous best in class applications and core systems including data processing, credit card, mortgage, insurance, brokerage, and trust. That data must then feed applications that turn it into information such as Internet banking systems, customer relationship management applications, and data warehouses.

Members or customers require consistent views of information and the ability to take action on that information regardless of distribution channel including the branch, call center, shared branch, card services (ATM, debit, credit), Internet banking, wireless, and telephone banking. Transactions performed at one touch point should be reflected in all other distribution channels particularly when an employee later interacts with the member or customer.

Employees need a picture of a person’s total relationship with the financial institution. With strong analytics and campaign management tools feeding employee systems, they are prepared to cross-sell the right products to the most receptive people. To round out the service experience access to additional information and fulfillment needs to be available at the click of a button. By providing employees with a fully integrated environment that delivers actionable information, financial institutions maximize revenue at the lowest cost. Some key components to note in delivering employee information include the right functional platform (teller, lending, collections, back office, etc.), a world-class customer relationship management suite and bi-directional integration of a document management system (instant access to information and storage of signature, receipts, etc.).

Management needs deep and broad business analytics and intelligence through robust integration of MCIF and graphical end user reporting. A full data warehouse that captures information from the myriad of integrated systems will provide the ability to highlight opportunities and risks. Managers will be able to analyze results in areas such as performance by department, member trends and behavior by channel, and product penetration and profitability. Only with a complete picture can you then target profitable products at the customers or members most likely to purchase through the distribution channel with the highest probability of having your message heard.

Whether customers or members, employees, or management, One View enables each of these constituencies to take action on the information created.

Creating actionable information is a complex process involving multiple systems, technical know-how, and business acumen. The best solution providers help simplify the complexity for their customers through the available of industry standard open technology such as web services and integrated best in class applications.

Jeff Whelton manages marketing strategy for Harland Financial Solutions – Core Systems. For more information, contact Whelton at jeff.whelton@harlandfs.com., visit www.harlandfinancialsolutions.com, or call 800-365-3356.