Transforming the Commercial Lending Process through Innovation: Automated Financial Systems, Inc.

“We have the experience, expertise, and dedication to innovation you need to transform your commercial lending business.”

Automated Financial Systems, Inc. (AFS^®) is the industry leader in lending and risk management solutions for financial institutions. AFS provides the industry’s only fully integrated commercial lending system designed to process multiple types of loans on a single, real-time, multibank, multilingual, multicurrency system. Integral to the core AFS lending solution is its unique straight-through processing capability encompassing the lending process from Origination through Servicing.

An Exclusive Talk with the President of AFS, John Shain:

What was the impetus to create AFS?

The company started 45 years ago to address, specifically, the fact that there was no standardization in how banks accounted for their commercial business. AFS set out to create standards to manage a bank’s commercial loan portfolio that didn’t rely on the “old” manual ways, and sold that standardized process to a great many banks. Since that time, we have never stopped innovating commercial lending processes, and have introduced a number of systems culminating in the fully digital and mobile AFSVision^®, the industry’s only enterprise-wise, straight-through processing commercial lending system to any type of loan.

When we started, there were 14,000 individual banks; today there are about 5,000. Banks have become much more complex and much larger than anybody ever thought they would. Throughout this period, AFS has played a major role in helping the banks in their consolidations and acquisitions by providing a consistent, enterprise-wide process. We have more than 300 active installations at the top 100 U.S. banks, translating to tens of thousands of people who use our software or have access to it every day.

We are a major provider of services to these banks, which rely on our systems to run the software that supports their day-to-day business. And while it’s intense in terms of security and capabilities, mostly importantly it’s about the dependability that AFS delivers.

Can you talk about the challenges you face in this highly volatile industry?

Consistently keeping up with the incredible pace of technological advancement and market practices/trends is our focus. Historically, AFS used to license our software to a bank, which would install it and then be responsible to manage it. Around 15 years ago,we realized we had to invest in the future in order to anticipate the changes that were coming in terms of architecture, security, access to data, the structure of data, high availability of data, redundancy of data, and disaster recovery. As a result, we built a hosted private cloud solution where we managed all of that delivery for the banks; we are now the largest hosted private cloud processor in commercial lending software in the United States, and probably in the world.

We continue to invest an enormous amount of time, energy, and capital into R&D and our staff in order to stay ahead of technological advancements and security concerns as well as stay abreast of changing market practices. This is something that we embrace. AFS consistently invests at least 25% of revenue on product development, with over $300 million to develop and evolve AFSVision. Our 5-year strategic plan calls for an additional minimum investment of $10 million annually in new capabilities and enhancements. We are active participants and partners with our customers, understanding their needs and goals—it’s all part of being in business today.

What are the greatest attributes of your company?

Our greatest assets are people; the people who provide the skills and insight that combine technological advancement with financial industry knowledge. Our staff is growing here in the United States and we develop all our products in-house. We believe that our staff dynamic is a real asset and differentiator because most of our competitors don’t have the reservoir of skill and knowledge that our team has.

With our people comes innovation. We continue to be the market leader and we know there’s always competition trying to knock us down from that position and we have to keep competing every day. We are not only a leader in the technology, but we’re a leader in how banks use the technology to actually enhance their profitability both from a cost and revenue perspective. I think our product strength is a real differentiator, and that strength stems from our commitment to innovation. We have a culture of innovation that allows people to continue to develop, to think outside of the box, to partner with our customers.

And there’s where we really differentiate from our competitors—the collaboration that exists between AFS and our customers. The consistent energy that we put into learning about the market and our customers’ goals, as well as educating and training them is a huge differentiator in terms of their being successful and leveraging our capabilities.

You mentioned partnering with your clients, do have a recent example you can share?

We partnered with BB&T to deliver AFSVision as part of their overall internal process transformation initiative to resounding success. The success was largely due to the fact that from day one AFS was engaged in all stages of the project, including the initial design and process planning, providing not only the technology, but also the expertise and guidance to collaborate and execute the implementation and integration throughout the Bank.

It was a massive undertaking, consolidating numerous systems with hundreds more impacted. With our partnership approach, everything was implemented over one weekend on time and on budget. The Bank now has a true enterprise-wide, end-to-end, straight-through commercial processing solution that is digital and mobile enabled.

What is the future roadmap of AFS?

I see the market converting to a digital mobile world where the customers have 24/7 access to their data, their cash flow. We have given our customers the ability to compete in that world and we continue to invest in critical areas like security and digital/mobile access.

AFS uses software from Google and the services of leading security companies from around the world to ensure that we can provide the level of security that’s required, not only in the United States but around the world. We’re also very mindful of the issues surrounding regulatory compliance. We’re deeply involved with the regulatory community, making sure that from a service and capability standpoint, we’re ensuring our clients meet the regulatory burdens they carry—today and tomorrow.

Each day, every day, AFS deploys its resources to solve bank problems, defined as broadly as it needs be. I think we’ve done that very successfully for the last 45years, and our customers know they can depend on us.

Meet John Shain

President of Automated Financial Systems, Inc. (AFS), the market leader in the provision of commercial lending solutions and industry benchmarking in commercial bank risk, operational performance, and pricing to top tier U.S. banks. Under Shain’s direction, AFS has leveraged its dominant domestic market position by developing and delivering the AFS hosted private cloud network called AFSCommerce^®, which has grown into the nation’s largest real-time, straight-through lending process. Shain has over 35 years’ experience in the financial services industry and he is a contributing author of articles to various banking and management publications and is a frequent speaker on the subjects of commercial banking and the coordination of risk, pricing and the data components of the credit delivery process.

“On a global scale, AFS has what no other provider can offer. A relationship with AFS gives you access to a solutions provider with a world-class track record of over 45 years in the financial services industry.”