John San Filippo
Jack Henry Connect 2022: The Shanon McLachlan Interview
By John San Filippo
Starting with its technology modernization initiative in February, through its recent partnership with Google, Jack Henry has made a string of significant announcements in recent months. To put it all into credit union perspective, Finopotamus spoke with President of Credit Union Solutions Shanon McLachlan, whose title prior to Jack Henry’s recent rebranding was president of Symitar.
APIs and Open Banking Mean Easier Integration
McLachlan told Finopotamus that Jack Henry is placing major emphasis on application programming interfaces (APIs) and open banking. “What it means to Symitar clients is continued and even easier integration, whether it's with third parties they choose or partners of ours or products of ours,” he said. “We've got clients right now that are going live, doing implementations with more integrations than we've ever seen in the past. And they're telling us, it's just that much easier than it's ever been [to create those integrations].”
As part of this push toward easier integration, McLachlan said the company has created a website called JackHenry.dev that documents the various ways that third parties can integrate to Jack Henry products. He noted that by using resources available on that site, third-party developers can develop respective Jack Henry integrations. “A company that’s interested [in integrating to Jack Henry products, including Symitar] can start learning and doing their coding right there,” he said.
McLachlan explained that the long-term goal is to merge all of the APIs for all Jack Henry products into a single, unified platform. He added this approach will also make it easier to identify and build additional APIs as needed.
McLachlan said that data streams play an important role in Jack Henry’s modernization. “Think about the real-time events that are occurring and that are feeding into the platform,” he said. “Historically speaking, you might do a batch integration. You might say, ‘I want to pull this data, but I need that data two, three, four, 10 times a day.’ But if you've got all of the data from all of the members’ accounts, and now you’re subscribed to balance changes, for example, the only thing that happens is we push a message to you that says ‘Shanon's account has changed.’ Now the balance is right. You don't have to get all of that other data. You don't have to waste all that extra overhead and it's real-time or near real time.”
A More Complicated Environment
“Anything that was built 20 years ago is dated. Anything that was built 10 years ago is dated. And anything that was built 10 months ago is dated,” noted McLachlan. “You have to continue to evolve [the technology] and you have to build the platforms in a way that you can evolve. Otherwise, you're stuck. You may not be stuck today, but you're going to be stuck soon.”
McLachlan acknowledged that legacy technology still plays an important role in this evolution. “You've got stuff that's been around for a while, but it's proven and it's rock-solid,” he noted. “It's a trusted engine. We have to leverage that.”
While core processing platforms are, by design, created to be all things to all people, no credit union uses all the features built into any given core. McLachlan said that Jack Henry’s long-term strategy includes “componentizing” the core so that each credit union gets only the features they need, which in turn leads to greater processing efficiency.
“When you think about componentizing – deconstructing – the core, picking out just those things that I'm really going to use, why would I want the extra overhead carrying along the stuff that I’m not going to use?” McLachlan added that this will eventually lead to credit unions having the option to replace what have traditionally been core built-ins with third-party components of their choosing.
But Finopotamus asked: Will that lead to credit unions having too many technology choices?
“A lot of credit unions that I'm talking to have been telling me, ‘Give us your best practices,’” said McLachlan. “‘Tell us how you think this would run best, but let us have those options because we might have a specialty need, or we might have a specialist in that area who wants some other piece. Give us that option, but tell us your best practices so we can avoid the confusion.’” This will lead to Jack Henry playing a more consultive role in such decisions.
Tech Support Challenges?
Finopotamus then asked McLachlan about the technical support implications of potentially having 700-plus credit unions each running a different flavor of Symitar based on the vendors and components they choose.
“There are areas that are going to complicate support for sure,” admitted McLachlan. “But while we're deconstructing and componentizing [the core], we're building an instrumentation. We know through the instrumentation, you've got these seven components, these three are somebody else’s. So, we'll be able to look at that.” He referred to this as “unified observability.”
McLachlan added that he expects to see self-service diagnostic tools improve dramatically in the future. He said he also expects to see tighter relationships between Jack Henry and third-party vendors. “I think you'll see our VIP (Vendor Integration Program) step up a notch,” he said. “Are you integrating into the components? Now we've got a whole new level of partnership that's there.”
Today and Tomorrow
Finopotamus asked McLachlan when Symitar credit unions can expect to see the results of these modernization efforts.
“That's an interesting question because part of the modernization, we don't want you to notice,” he explained. “We want it to be seamless. But there's the user experience component of it, too. We're working on a couple of modules right now,” he said, pointing to wires and mortgage investor servicing as two examples. He added that while the user experience with these two components will be greatly improved, there will be no technical effort required to deploy them. “The user experience will expose new capabilities,” he said, “but it won’t be, ‘Oh my goodness. I have to hook up something to something.’ We've already done that.”
Regarding Jack Henry’s planned shift to Google’s public cloud, McLachlan said he expects this approach to lead to greater access to technology for credit unions of all sizes. “When you look at the total scalability of the public cloud, that's what it's all about. But then you also get the horsepower and security and audit across the whole platform.”
McLachlan said there’s a difference between simply running legacy software in the cloud and building specifically for the cloud. “We're building for the cloud,” he said. “If you don't build it to take advantage of the elasticity [of the cloud], you're not going to get the scalability.”