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EXCLUSIVE: Zions Bank reaches milestone with TCS Bancs core banking project

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  • EXCLUSIVE: Zions Bank reaches milestone with TCS Bancs core banking project

Zions Bank, the first taker of TCS Financial Solutions’ Bancs core banking system in the US, speaks exclusively to IBS about the project progress so far and the next steps.

Zions Bank, US - Zions Bank reaches milestone with TCS Bancs core banking project

Zions Bank, US – Zions Bank reaches milestone with TCS Bancs core banking project

Utah-based Zions Bancorp, a large regional bank, is now 18 months into a project aimed at standardising on the TCS Bancs core banking system across eight subsidiary banks. The bank is implementing the latest release of the system, version 14.

The core systems implementation effort began in 2013, and is expected to span five to seven years. The transformation, dubbed Future Core, has been divided into three stages: consumer lending, commercial lending and deposits. ‘We have now completed the consumer lending specifications, and are nearing completion of the commercial banking specifications, with this expected to finish in the next two or three months,’ says Aaron Schlenz, the bank’s senior vice-president, core programme management.

In the original plans, commercial lending was to be implemented first. As the effort progressed, it became clear that, due to the complexities and activities around commercial lending, it would be more sensible to start with consumer lending. This was not a difficult change for the project, as the first phase was a combined requirements effort for both consumer and commercial. ‘Consumer lending tends to be more straightforward than commercial lending, and therefore requires fewer US localisations,’ states Schlenz.

Furthermore, Zions has been undergoing standardisation across its commercial lending operations. ‘Commercial lending operations centres are being consolidated, and back office processes are being reviewed and harmonised,’ says Schlenz. The reduction in commercial lending operations centres – from more than a dozen locations to two – will simplify the implementation of Bancs. Zions is also replacing its commercial lending front-end systems, with a project underway to replace a number of legacy loan origination applications with an offering from Linedata Capitalstream.

Managing the risk of the implementation has been a top priority for Zions’ management and board of directors. One of the bank affiliate CEOs was promoted to president of the enterprise, tasked specifically with the responsibility of ensuring the project ran smoothly. In addition, Zions hired a programme director experienced in core banking transformation. Additionally, the conversion approach for each release is devised early on, with various options being considered to reduce and mitigate conversion risks. Zions is not utilising a consulting partner in the role of ‘systems integrator’, as TCS and Zions have partnered on most of the integration activities; however, Zions has turned to consultants in specific targeted areas. Major consulting firms have provided assistance in areas ranging from accounting system modifications to testing preparations.

‘There is strong support from executive management of Zions, which is key for a successful outcome. Executive sponsorship and accountability goes all the way to the top,’ states Schlenz. There is a stakeholder advisory board that has representatives from Zions’ affiliate banks across all businesses, which plays ‘an important communication role as its members get information out to their respective departments’, continues Schlenz. Additionally, there is a programme steering committee, with Joe Reilly, Zions’ chief information and operations officer, at the helm, plus senior executives from TCS. The committee provides oversight of project execution and the strategic components, including scheduling, determining implementation processes, and customisations. Finally, there is an executive review group that provides top-level executive oversight of all major programmes.

The implementation team will be carrying out the training and conversions; additionally, there will be a team to ensure the business and operational readiness of Zions’ locations and staff.

To facilitate effective interaction between the Zions and TCS teams, the participants have been engaged in ‘cultural sensitivity’ and ‘team building’ training. Schlenz regards this as a vital component of the project. From the outset, the bank was aware of the cultural differences of Zions’ eight affiliate banks and the implementation risk that such a structure would present, so ‘it was reassuring that TCS suggested a training course to address this’, he comments.

When the entire operation is completed, Zions believes its back office structure and systems will provide it with a competitive advantage, particularly from the standpoints of:
•    client centricity – the ability to gain new customers at lower costs, an improved 360-degree view of the customer, simplified customer and employee experiences;
•    operational efficiency – less rework due to straight-through processing, easily configurable screens and workflow, fully automated processes with fewer manual touch points;
•    product innovation – application of features and functions across deposit and loan products, faster time-to-market through product configuration, improved product bundling and relationship pricing;
•    IT simplification – improved ability to optimise and leverage existing infrastructure, reduction of service interruptions, better utilisation of highly skilled technical resources, and high availability and business continuity improvements.

by Tanya Andreasyan.

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