In the ever-changing financial landscape, bank executives are often faced with many looming questions. These questions may involve operational decisions for their bank, including whether a hosted environment is a good fit for them versus self-managing their own environment. They might also consider if moving to a service bureau for processing would be more efficient and the right move for daily processing. Either way, they must also think about how their staff will feel about these changes.
When considering moving to a hosted environment and possibly adding service bureau processing, many factors must be considered. Ransomware, malware, and viruses are just a few of the technological threats that financial institutions face. A hosted environment affords them increased peace of mind, with top level security at an affordable price. Data centers at their core allow the bank to put their security concerns in the hands of a team of professionals, relying on their expertise. This option spreads out the costs of those additional layers of security among a group of hosted banks. The routers, firewalls, and exterior security that are put in place cannot be mirrored, without great expense, within an in-house environment. In some ways, this benefit alone might be enough to prompt all financial institutions to flock to a data center; however, there are other considerations. What level of control will the bank maintain over the products they want to use? Can the bank still decide when programs are updated? Will select bank personnel still have administrator access of the environment? Regarding firewall control and website access, can a bank dictate what they want to access via the web or what is blocked?
The selection process for a hosted vendor requires in depth due diligence and is key to ensuring that they meet and exceed all the bank requirements and desires for the service. One of the most critical advantages to a hosted environment is the high level of security and protections from outside attacks on their servers and data. Updates to software, firewalls, and servers done behind the scenes and after-hours allow the bank staff to work with little concern or disruption to their daily work. The reallocation of the costs associated with maintaining an in-house environment allows the staff to focus on the business of banking and critical strategic goals.
Going beyond considering a hosted environment, the discussion of adding service bureau processing can be highly volatile. One of the biggest concerns management faces is the apprehension of staff. Is this move intended to reduce staffing numbers? What will happen to my job? In addition, there may be questions about the lack of control over posting files and end-of-day (EOD) processing. In general, people tend to feel a lack of control when they cannot see or manage a process on their own. Moving to a service bureau can certainly evoke these worries. Looking beyond those concerns by digging deeper into the advantages will uncover the true benefits of a service bureau.
Top performing bank employees are often in the backroom, tackling the task of posting, balancing, and processing the files of the day. Taking those talented employees and allowing them to work towards the strategic goals of the bank, working directly with the customer base and helping to launch new products and services, can help expand a bank’s portfolio quicker and more effectively. New products and services require extra time, talent, and management. Oftentimes, banks shy away from launching a new product or service due to the lack of time or personnel required to properly manage and market it. A service bureau can get those full-time assets out of the back room, at a minimal cost. In addition, a service bureau processor affords the bank much easier management of vacation and sick time, as the processor handles the posting of all daily files and processing during EOD. A coveted, non-tangible benefit is the staff knowing they can clock out on time each day. With recent regulated changes made to same day ACH windows, along with customer demands for longer service hours at the bank, a service bureau could benefit both customers and staff.
Let’s wrap this up with this final thought: when considering potential service providers for these options, look for a partner. You should seek out a company who communicates with your staff on daily processing progress, current cyber threats, and how they are protecting your data. Find a vendor who listens to your needs and exceeds your customer service expectations.
Please contact David Bauer, the Director of Customer Relations, to learn how Insite Data Services (IDS) hosting solutions, along with IDS On-Time processing, can partner with your bank to help your bank meet and exceed your goals for future growth.
About Automated Systems, Inc.
Since 1981, Automated Systems, Inc. has been a leader in providing innovative core banking, digital banking, and data processing solutions to community banks nationwide. An array of integrated applications provide partnered banks with tailored, cost-effective, competitive choices. ASI delivers industry-leading technology backed by unparalleled in-house conversion, training and support teams; paving the way for progressive, top-notch customer service. ASI corporate headquarters are located at 1201 Libra Drive, Lincoln, NE 68512, 1.800.279.7312. For more information about banking solutions from ASI, visit www.asiweb.com.
About Insite Data Services
IDS data application hosting services combines secure and cost-effective core banking applications, enterprise-class servers and storage, and proven virtualization technology. IDS hosts all of the bank’s servers in secure data centers that use state of the art security systems including identity verification and biometric scanning. Insite Data Services also offers IDS On-Time, a full-service solution dedicated to back-office bank processing. These operations experts allow partnered banks to focus on their most important asset, their customers. For more information visit www.insitedataservices.com.