Farm Credit Canada integrates loan management tool into SOA

Farm Credit Canada plans to spend the next two years deploying a loans management application that will be integrated into its service-oriented architecture.

The Regina-based provider of financial services to Canadian agribusinesses said Tuesday it has chosen a module within the SAP For Banking portfolio to track the entire life-cycle of its loans, from origination to acquisition and maintenance. Farm Credit Canada has its own legacy system for the same purpose but has adopted a strategy of eliminating single-purpose applications over the next five years.

Paul MacDonald, Farm Credit Canada’s senior vice-president and CIO, said the company’s decision to adopt a service-oriented architecture (SOA) played a major role in determining how it would proceed with loans management. SOAs allow companies to link their various IT systems more easily and to reuse pieces of software in a variety of different scenarios.

“Many of us (in the financial services industry) are facing the same dilemma,” he said. “While it’s doing the job today, in order to move forward and leverage the value that SOA can bring to an organization, the old legacy platform just isn’t going to cut it.”

Farm Credit Canada’s vendor approval process included on-site visits from SAP who demonstrated the Loan Management product to its business users, MacDonald said. The financial services firm also visited SAP locations and set up technical proof-of-concepts to ensure the software would fit within its SOA environment. “There’s lots of marketing hype that says, ‘Of course my product works with SOA,’ but we needed to see that integration,” he said.

Although Loans Management is part of MySAP ERP 2005, its customers are not necessarily traditional SAP shops, said Richard Daukant, the company’s Canadian vice-president and general manager for financial services.

“It’s a mix and match where some may have built their SAP footprint, but a lot of them are modular-specific,” he said. “What we see very often is that the challenge is rapid time to market – they want to build, test and deploy new services very quickly, and have those SOA-enabled.”

Most financial services firms are focused on cost reduction and operational efficiencies, and a big problem area is managing the ways they conduct business with clients, said Randy Packham, SAP Canada’s national director for financial services.

“There are more channels that customers want to interact with,” he said. “There was an expectation at one point that as banks got customers to go on the Internet, it would reduce branch traffic. Now they’re getting into mobile devices, and a lot of banks are having challenges enabling the new channels.” 

MacDonald said Farm Credit Canada is now in the “blueprint” phase of its Loans Management deployment, though it has already conducted its design process work. While it should reduce rekeying of data across several systems, he said the transition should be relatively transparent to employees.

“Most users, particularly customer-facing users, will actually never see an SAP screen. They will be interacting through our corporate portal,” he said. 

Last fall, Farm Credit Canada signed a $36-million deal with ISM Canada, a subsidiary of IBM Canada, to extend the relationship between the two firms by five years. ISM will be responsible for infrastructure services, system maintenance, storage, backup and recovery, mainframe and server upgrades, and server consolidation.

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