A financial institution’s IT systems must be constantly refined in order to manage modern banking. This evolution has always been about finding ways to make IT processes more efficient, cost effective and compliant while providing the tools the staff needs and the services customers want.
As banks look at upgrading their networks, changing or renewing vendor relationships, the moving target of compliance and the pace of technological advancement, senior management must weigh its decisions based on the future. Will the solution they choose position the bank for scale, growth and to meet budget requirements? The decision often comes down to two primary options: virtualization and cloud solutions. With the Great Recession behind us, IT spending is becoming more of a priority, especially for projects that improve efficiency.
Banks are discovering how virtualization helps them work smarter, not harder, while cutting costs. Faster systems save time and, inherently, money. By increasing the amount of database transactions systems can perform, banks can see improvements in workload capacity and speed, which can translate into more work getting done faster.
The cost of maintaining a sprawling server farm can be overwhelming, both fiscally and in the eyes of regulators. This is why $206-million Pensacola, Fla.-based bank holding company Five Flags Banks Inc. chose to move its IT network into a flexible, virtual environment. In doing so, the bank holding company has been able to immediately unclog information pipelines, save time and strategically position the organization for future growth.
Scale Up, Not Out
The three banks that comprise the Five Flags Banks — Bank of the South, The Warrington Bank and Bank of Pensacola — each have two locations and they share two data center co-locations between them. Each institution is a community bank with a great track record and loyal customers. With six total branches and 65 employees among them, it was crucial that Five Flags implement a system that would minimize the amount of manual, tedious tasks required of a sprawling, complex server network.
“We were previously working with an IT provider that was not banking-centric, and it can be difficult for those providers to understand the regulatory environment we operate in,” said James Brammer, ISO and Information Systems Committee chairman of Five Flags Banks. “Examinations are getting tougher and tougher; we needed a system that would afford us cost savings and a more efficient means of running our IT environment and maintain our compliance at the same time. Through a complete network evaluation with Safe Systems, we discovered the efficiency gains the bank could make by moving to a virtual environment with a company that adheres to the same regulatory standards that are required of us.”
Five Flags consolidated its server farm into virtualized server hardware at the co-location facility all three banks share. In a virtualized IT environment, documentation reporting and management oversight are vital. Prior to the implementation, Five Flags needed to manually verify patch updates machine by machine, often relying on rudimentary reporting capabilities to ensure its systems were up to date. The bank now has a single portal to access the status of its entire virtual network at any time, including virus updates and critical application patching such as Adobe and Java, keeping ahead of regulators.
“This move from legacy servers to a condensed, virtual environment was a huge undertaking,” Brammer said. “However, it was one of the easiest implementations we have ever done, and one in which we saw an immediate 75 percent time savings by operating in an automated setting. This conversion has made operations simpler, faster and more redundant. By replacing the ongoing maintenance and management of outdated systems with virtual servers, the bank has saved a significant amount of time and, ultimately, money.”
The virtual IT network consolidates multiple operating system environments onto single servers supported by fully redundant off-site backups. This simplifies back office operations, increases response time to changing business demands and improves business continuity planning by providing high availability for mission critical servers. Combining this back office technology with Safe Systems’ FFIEC-compliant IT management toolset, NetComply, allows Five Flags to outsource day-to-day IT functions and management to a hosted environment with Safe Systems and its SOC 2 Type II audited facilities.
“Manually updating patches is a headache and third-party software can be expensive,” Brammer said. “Five Flags had grown into and out of its original hardware and needed to take a more proactive approach to keep ahead of audit and regulatory requirements. Safe Systems provides us with a simple, more redundant and compliant infrastructure that runs effortlessly behind the scenes with 99.9 percent uptime with a team of experts available for support.”
For Five Flags Banks, the key was to get in front of regulatory demands, while ensuring the technology investment would be fruitful. Investing in new hardware only to see it become obsolete two or three years down the road represents a financial risk to any business, one that the bank can now avoid by implementing a system with the economy of scale. Through virtualized infrastructure, and its partnership with Safe Systems, Five Flags found a means to keep pace with emerging technology and compliance standards, extend IT longevity and position its operations to meet future growth.
Danny Johnston is CEO for Safe Systems, a national provider of compliance-centric IT support and hosted services for financial institutions. For more information, visit www.safesystems.com.
Copyright (c) August 2014. BankNews Media.