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.
This article originally appeared in the August 2014 issue of BankNews magazine.
This article originally appeared in the August 2014 issue of BankNews magazine.