'Tech Plan Should Reflect Business Strategy.' (Furash and Co. Managing Director Jose S. Lantigua Discusses Bank Industry Technology) (Interview)
Tucker, Tracey, American Banker
Jose S. Lantigua, managing director at Furash & Co., Washington, says today's bankers are searching for ways to use technology to create revenue opportunities.
With this in mind, bankers are investing heavily in communication networks, branch delivery systems, and core banking applications software, says Mr. Lantigua.
A bank technology and information management consultant for nearly 20 years, Mr. Lantigua has been involved in many computer systems projects at large financial institutions.
The executive spent eight years as a consultant at International Business Machines Corp., where he advised banks on knowledge-based systems for retail banking, marketing systems and software vendor evaluation.
Prior to working for IBM, Mr. Lantigua was a director at a major data base software company, a technical support manager for a microcomputer company, and project manager for office automation at Blue Cross and Blue Shield of Florida.
Mr. Lantigua joined Furash last July, and is lending the company's bank technology practice.
He spoke recently about what technologies he sees as most important in the banking industry.
Q.: What issues are banks facing today with regard to technology?
LANTIGUA: One of the key things banks are doing today is replacing core systems. There's a lot of work being done by some of the leading vendors to do two things. One is to make applications much more distributed in the client-server type of environment. And the other is to create an environment where data, both internally and externally, can be integrated in the organization.
Most banking organizations today are trying to make the shift from a transaction-based, customer service type of organization to a sales culture-type of organization.
In order to do that effectively, banks must have more comprehensive information on customers and products. They need information not only from core systems but also from peripheral applications, such as cash management, electronic funds transfer, and mortgage applications.
As banks get into new lines of business, such as mutual funds and other investment products, there's also a need for the exchange of information from these multiple lines of business, which are usually on multiple systems.
This is the "information warehouse" concept, an environment where you have a set of products, tools, and methods that allow you to store information from multiple sources.
Q.: Will large and small banks increase their use of client-server technology?
LANTIGUA: There's a definite trend to decentralize not only data but transaction processing, and much of the application intelligence.
It's becoming increasingly easier for developers to create applications that are client-server based. And it's cheaper to implement applications on a smaller platform, providing a variety of advantages, including redundancy of data and redundancy of hardware. It makes a lot of sense for applications to be distributed throughout a wide area network.
Q.: What must banks consider when planning for the implementation of technology?
LANTIGUA: They need a plan for implementing the technology that reflects their business strategy. If you have a well-defined business strategy, it's a fairly easy process to develop a definite technolgy plan, and and then to develop implementation projects from that plan.
We find that many banks don't have a well-defined business strategy and certainly business strategy and certainly have not implemented a detailed planning process down through the business unit level. We find that there are gaps in the busines objectives that really need to be filled before we're able to determine what the right technology strategy is.
Q.: Do you suggest banks reengineer when they implement technology?
LANTIGUA: We always recommend that some reengineering be done in conjunction with technology. …