Commercial banks play a critical role in any modern economy. Their significance cannot be underrated since they enable other entities within their region of operation to flourish, as well as accelerating economic growth. Due to their existence, small business enterprises are in a position to receive adequate financing to launch developmental initiatives and other operations. In some instances, financial institutions and local businesses collaborate resulting in productive financial outcomes. In Alabama, such associations are common, and they are meant to ensure that both parties receive substantial benefits. The association between firms and financial institutions, is due to certain elements such as providing loans, enhancing security and marketing initiatives among other reasons. The initiation of a collaboration between Integrated Legacy Solutions (ILS) and Republic Bank is beneficial towards elevating the level of client confidentiality in the banking system and has also culminated in great economic and financial benefit.
Integrated Legacy Solutions (ILS) is a company situated in Birmingham, Alabama. This business is currently the prominent provider of technological components used in image and data migrations and conversions which has turned out to be very resourceful for financial institutions. In 2017 alone, the number of projects at the institution increased by 36% due to 127 novel client developments (Businesswire, 2018). To this end, the historical projects established by clients in this company have almost reached 500 which is close to 305TB that represents management of customers in up to 36 states. Moreover, the business is involved in conversions and also data migrations especially in the event that financial institutions are merging or in a situation where acquisitions are taking place (Businesswire, 2018). Banks have reiterated that part of the reason why they have opted to outsource the resources provided by ILS is based on the strategic initiative in reference to data migration and conversion readily provided by the entity. Besides, the company`s capability to move legacy data in a faster and more efficient way and also in a less costly manner has managed to attract many financial entities to seek its services. Some bankers have indicated that prior to partnering with the technology company they assumed that full conversion processes would have to be undertaken especially on data which was quite stressful for them. ILS has turned out to be the company that any financial institution that seeks to continually generate substantial economic benefit can rely on.
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Based on information obtained, ILS was initiated in 2013, by Kris Bishop, and prior to its acquisition by NXTsoft, the company only had 17 employees (Cission, 2015). Even more remarkable is that it has succeeded in archiving up to 500 projects with more than 160 clients spanning across various sectors of the economy with banking institutions being part of the most loyal clients. Upon ILS` acquisition all employees were retained by NXTsoft. It is also important to mention that the OmniView Browser created by ILS is what attracts most of its clients. Also, the business can be categorized as belonging in the technology industry. Being part of NXTsoft has led ILS to embrace three key components to manage operations. The first one involves, securing data. This is one of the top concerns of the banking industry in the contemporary world (Cission, 2015). Many incidences of hacking have impacted greatly not only on the banks but also the financial economy as well. A financial entity with a secure system is not bound to fail. Cybersecurity management as well as initiation of training mechanisms have been initiated. Connecting client`s data is the second main objective. The FinTech landscape that houses ILS is now in the process of advancing new exciting resolutions that are meant to empower banks as well as other financial institutions (Cission, 2015). The data connectivity solutions which almost every bank is after is what ILS readily provides. The third chief objective is optimizing a client`s data. Through data analytics, ILS is now in a position to eliminate various barriers which ensure bank specific results are attained.
The collaboration between Integrated Legacy Solutions (ILS) and Republic Bank is one of the most popular relationships that has existed in the financial sector and which has been economically viable in the long run. The association was created after Republic bank`s acquisition of First Commercial Bank. The main reason why the two entities collaborated was the bank`s requirement of the OmniView Browser whose significant aim was storage of in-house legacy systems resulting from some acquisitions. Republic bank required a system a system capable of retrieving check images reports, statement images and other affiliated documents (Cission, 2015). The idea of undertaking time data conversion mechanisms was bound to be a very costly incentive and, hence, the bank deemed it fit to adopt ILS`s system. One element that can be adopted here is that due to the seamless system provided by ILS, extra costs that could have been shifted to the bank`s customers were avoided and this had a beneficial impact on the economy. Further, the process made the acquisition possible and less strenuous. The partnership between the business and bank is also resourceful since it managed to enhance the banks overall operations and augment the IT strategy (Cission, 2015). Normally, data conversions are bound to take months and even years to undertake while using traditional approaches, however, through the integration of the OmniView Browser, the process is likely to take an even shorter duration such as several days. Further benefit derived from the association between both entities is the idea that the bank was able to undertake federated searches, and also maintain hardware and software components. More significantly, the security advantage posed by the partnership cannot be undermined whereby ILS is capable of providing better security solutions to assist the Republic bank during the period of acquisition and even after the process is complete.
Despite the seemingly good relationship established between Republic bank and ILS, it is important to consider that some risks were posed by the two entities coming together. For instance, operational risks are likely to affect the association between the businesses. ILS is responsible for computation and record keeping during the duration of collaboration and this implies that in the event that some details are misplaced due to irregularities in the system, it might be impossible for the bank to retrieve such details afterwards (Kidwell, Blackwell, Sias & Whidbee, 2016) . Legal risks also have to be considered in this situation. In the event that ILS does not fully comply with the contractual obligation offered by the bank, they are liable to face litigation. Also, counterparty risks emerge in the same scenario whereby there may be non-performance on the part of any of the two parties to the contract (Kidwell et al., 2016) . For example, adverse price movement may make it difficult for either party to fully deliver the promises made. Moreover, systemic risk is likely to occur in the event that government policies change within the period that both parties to the contract are in association with one another.
To sum it up, the initiation of a collaboration between Integrated Legacy Solutions (ILS) and Republic Bank has managed to stimulate economic and financial benefits. ILS being part of the fast emerging Fintech entities in Alabama has been resourceful in providing lasting technological solutions to financial entities such as the Republic bank. Besides the data migration capabilities that ILS has to offer in this case, there is an even greater possibility that the business will providing lasting safety solutions to the bank especially in the event of its new acquisition. It is, nevertheless, fundamental to note that operational, legal, counterparty and systemic risks are also likely to be posed by the collaboration, though their magnitude is not significant enough to deter this association. Relationships between local businesses and banks should, therefore, be encouraged owing to the great assistances they are likely to initiate.
References
Kidwell, D. S., Blackwell, D. W., Sias, R. W., & Whidbee, D. A. (2016). Financial institutions, markets, and money . John Wiley & Sons.
Cission. (2015, July 27). Republic Bank Successfully Leverages Integrated Legacy Solutions’ OmniView TM Universal Image and Data Browser. Retrieved from http://www.prweb.com/releases/2015/07/prweb12866564.htm
Businesswire. (2018, January 3). Integrated Legacy Solutions (ILS) Increased Bank Image and Data Migration Projects 36% in 2017. Retrieved from https://www.businesswire.com/news/home/20180123005335/en/Integrated-Legacy-Solutions-ILS-Increased-Bank-Image
