Charlie's Blog

Recent Press

2011-08-23T17:01:00.001-05:00

Check out some nice mentions for Andera in the press recently:

Front page Providence Journal article (article)
TV Interview on WPRI's Newsmakers (video starts around 15:00)

BankSimple

2011-08-10T15:19:00.000-05:00

We’re thrilled to become part of the customer experience revolution that’s brewing at BankSimple (see their blog post and our press release from today). It’s exactly the kind of innovation that we wanted to drive when we exposed our account opening system as a development platform. We’ll be powering the application and funding risk management components of their online application, staying behind the scenes so they can tightly control their user experience and integration with the rest of their online banking experience. They're still under wraps but we're as excited as everyone else to see what they've got cooking.

Top Five Reasons Why Risk Management Should Buy Into Online Account Opening

2011-08-09T10:33:00.000-05:00

Andera's own Renee Chicoine was published today in the Credit Union Times arguing why a financial institution's risk management team should buy into online account opening. Click here for the full article.

Online account openers: cooks, dog lovers, and...gamblers?

2011-06-14T15:00:00.000-05:00

I've become very excited about opportunities to leverage the power of our 500+ customer network. FortiFI is a great example of how we're doing that, and we've also started tapping the Network on behalf of clients to help them be more successful with online account opening through data and best practices. The research that’s out there today about online account openers is generally survey based, while ours is direct observation of actual online account openers. The ground truth.

Next week, we'll hold a Webinar to unveil some initial findings that many will find interesting, and the invite is below. Expect a lot more as we dive into insights based on demographics, product types, regional markets, institution type, etc.

In the last year, we have processed millions of online account applications for over 500 institutions. Recently, we studied consumers who applied online to learn what separates them from the general population--and even we were a little surprised by the results. Did you know that Online Account Openers are much more likely than their peers to be interested in cooking, dogs, travel, and...gambling?

Wait until you see what else we learned about their wealth and income… The research shows that online account checking account openers are, indeed, a unique and valuable group of consumers--that you can target. Interested in learning more?

Register Now for the Webinar!

In Search of Online Account Openers

Tuesday, June 21 at 2 pm ET

FortiFI featured by NetBanker

2011-06-14T09:19:00.000-05:00

NetBanker had a nice write up this morning on FortiFI - check it out here.

FortiFI - The Official Announcement

2011-06-08T13:37:00.001-05:00

Today we officially announced FortiFI, the latest addition to our suite of customer acquisition solutions for financial institutions (view press release here). FortiFI is a new kind of fraud prevention system that uses real-time data patterns to stop online account opening fraud before it's too late, and fills a gap in the market we've observed directly through experience and customer feedback.

In a nutshell, the idea is that our 500+ financial institution customers represent a significant portion of the banks and credit unions who open accounts online today, which gives us an incredible look down into application patterns that are only visible at wide scale.

For example, let's say a fraud ring steals a victim's credit file, and uses it to apply for checking accounts at a number of different financial institutions with the intent of overdrawing them or utilizing pre-approved loans. The individual banks take the losses, report the identity to the credit bureaus, and by then the fraud ring is on to the next victim.

FortiFI is able to intervene early on, before most banks get hit – when it sees patterns representing elements of common identities or usage patterns multiple times across our customer base, it is able to flag subsequent applications in real time and quarantine them before they get through. Of course sophisticated fraud rings use patterns that are more complex than a common identity, and the beauty of FortiFI is that it is tuned to pick up on subtleties, learns over time, and adapts to emerging patterns automatically as the fraudsters evolve.

FortiFI will be pre-integrated with our account opening platform, as well as available independently through an API within our developer platform so that financial institutions using home-grown or competitive account opening systems can integrate with it seamlessly.

Introducing FortiFI

2011-05-17T17:00:00.000-05:00

Tomorrow at 2:00 EST, we'll be unveiling FortiFI, Andera's new fraud prevention service for online account opening. During this free Webinar event, Andrea Hunter from our product team will be introducing the product and its unique capabilities to reduce fraud by leveraging our network of 500+ financial institution customers.

Click here for the registration link: http://bit.ly/lqeZ7k

Growth Is Hard (Part 4)

2011-03-31T13:43:00.001-05:00

Back in 2008, I wrote a series of posts called Growth Is Hard in which I put some context around the growing pains we were experiencing at the time. You can see the posts here, here, and here. At the time, we had grown quickly from 50 to 200 clients, and from 20 to 50 employees, and for a few months experienced some well-publicized capacity (both system and support) issues that thankfully were resolved.

Since then, we have not been perfect but have generally executed well and grown steadily. Yet here I am writing a new post called Growth Is Hard (Part 4)--so what gives? Several trends have emerged recently which could all be filed in the "good" category. Our pace of customer adoption has increased significantly (see my last post on reaching 500 customers). We are seeing great traction on some new products in the pipeline. Transaction volumes are increasing as a result of an improving economy and financial regulation causing higher levels of bank switching. We have expanded our team significantly with world-class people. All good, right?

In the long term, absolutely. But in the short term, we are going through some growing pains again. Some clients have experienced several brief periods of downtime over the past few months, including two partial outages on March 29th. Over the same period, our turnaround times on certain implementation and support projects have increased, in some cases to frustrating and frankly unacceptable levels. We've seen this movie before and should have recognized the signs earlier--always easier in hindsight--so I wanted to use this forum to describe what's happening and what we're doing about it.

To provide some context, we just reached 500 financial institution customers, and it was only eight months ago that we surpassed 400. To support this type of accelerating growth, we have been making very significant investments in people and infrastructure--for example, we:

Are growing our headcount by more than 50% (from 60 to 90+ people), particularly within Client Services and Engineering
Made major commitments in our roadmap to configuration tools, scalability, and a modular architecture
Recently raised $10.5 million of fresh capital for future investment and to keep our balance sheet strong
Are developing tools to turn around common change requests in days or hours; Later this year we will be running a pilot program to put these tools directly into our customers’ hands for instant turnaround
Added or promoted several new key managers recently, including Ken Young as VP of Client Services, Fred Engel as Chief Operating Officer, Alayna Cohn as Director of IT, Alex Abramov as Chief Architect, Shawn Brandt as VP Engineering, Jamie Verdi as Director of Account Management, and Suzanne Reynolds as Director of Channel Accounts, all of whom have flawless execution as a primary objective and are focused on this every day.

Based on these steps, we expect steady progress and a return to normal service levels within the next 60 to 90 days, followed by constant improvement to new levels over the course of the year.

I know it's risky to talk about these issues in public and that some will choose to use the information against us. But transparency and trust are key values in our culture and we believe customers prefer knowing the real story and to know there are great people behind the scenes taking the issues seriously and working hard to make things better.

As always, customers and partners are welcome to call me directly at 401.574.4770 any time.

500 Customers!

2011-03-10T08:15:00.000-05:00

Today we announced that Salin Bank & Trust in Indianapolis became the 500th bank to select Andera for online account opening (press release here). This is a huge milestone for our team, as it's great validation for the hard work they put in every day, and for our clients, whose customer acquisition platform grows stronger with every financial institution that implements it.

It was only this past June when we passed 400, and once again it's humbling to see the pace of adoption continue to accelerate. Here's an updated summary of how we've grown:

Date	Customer Count	Elapsed Time
Feb '11	500	8 months
June '10	400	10 months
Aug '09	300	15 months
May '08	200	17 months
Dec '06	100	45 months

Why are so many financial institutions making the decision to acquire customers online? As this recent WSJ article (featuring a number of Andera customers) points out, the banking landscape is changing rapidly and institutions are looking harder than ever for low cost ways of establishing profitable customer relationships. That happens to be the mission our team is working incredibly hard to deliver on every day, and on their behalf and I want to thank Salin Bank and all of our 500 clients for their trust, support, advocacy, ideas, and occasional patience. We are still just scratching the surface and I'm incredibly excited about what's ahead.

GAC Conference

2011-02-28T08:31:00.000-05:00

Andera will be at the GAC Conference this week in DC. If you're planning to attend, be sure to stop by and say hello to Tom Nugent and Susan Moran in booth #121.

One Week Away: Developer Platform Launch

2011-01-13T11:34:00.000-05:00

Next week, we'll be making a major announcement about the launch of our developer platform for financial institutions and third parties looking to integrate account opening, risk management, funding, and other capabilities into any type of external applications. Here's the invite to the free Webinar event:

For five years, Andera has been advancing the technology used by hundreds of banks and credit unions for online account opening. Now you can build applications with the same software components that we use:
Leverage Andera’s secure, battle-tested web services interfaces for application risk management, funding, fraud prevention, reporting, and more.
Enable instant innovation by creating custom online forms, secure ACH and credit card based mobile apps, loan applications for tablets, identity verification and authentication for online stores or gaming, credit score monitoring--think big.
Save time and let Andera maintain integrations to core processing systems, OFAC and watchlist checks, ID verification from Equifax and RSA; decisioning through FIS Qualifile® or Equifax Decision Express, and many others.
Interested? Join us on January 20th at 1:00 EDT/10:00 PST for a one hour introduction to Andera’s new Software Development Kit (SDK) and get in our plans to share this technology with innovative developers of financial applications. Get ambitious--we’ll do the heavy lifting.

Register at http://bit.ly/AnderaSDK.

Expanding Our Team

2010-12-02T12:36:00.000-05:00

This week we announced we’re expanding our team by 40% to support our rapid growth. We’ve opened up 24 new positions across the company in product development, client services, sales, marketing, and finance. We’re looking for great people with a variety of skills, backgrounds, and experience levels who are passionate about customers and looking to make a difference in a growing, innovative company. A summary of open positions and benefits is available on our careers site, and we want to hear from you – please help us get the word out to any friends or acquaintances that might be interested in applying or learning more.

Forbes Profile

2010-10-07T14:04:00.000-05:00

Forbes did a nice profile of Andera in this month's issue highlighting some of our history and future strategy. Check it out here: Andera's Battleplan: Adapt And Conquer.

A Big Day

2010-09-27T17:09:00.010-05:00

We're thrilled to announce that we've completed a $9MM financing round led by Edison Ventures. The official press release went out this afternoon so I wanted to follow up here and provide some additional context.

We have been very focused the last few years on execution in our core business – online account opening and funding for banks and credit unions. This focus on execution has been key to our success, as we’ve seen our customer base grow from a handful of pioneers to more than 400 progressive financial institutions, our team grow to more than 60 world-class professionals, and our alliance partner list grow to include major industry players like Intuit, FIS, S1, Q2, Yodlee, and most recently Online Resources.

But our focused approach appeals primarily to banks and credit unions who already understand other aspects of online customer acquisition like online marketing and analytics. These financial institutions have figured out how to drive qualified prospects from online (and offline) ads and communications into Andera's account opening platform, and have incredible results to show for it.

But the majority of financial institutions in the U.S. are not experts in online customer acquisition, and are looking for a complete solution encompassing marketing and account opening that is predictable, easy to implement, and cost effective. In effect, a faucet for new customers that can be turned on and off as needed, without the need to manage multiple vendor relationships or maintain in-house resources.

And on the other end of the continuum are those (mostly larger) financial institutions who already have both marketing and technology capabilities and are interested only in integrating specific account opening components (like risk management, core integration, or funding). These institutions are looking for a modular technology platform with which their developers can integrate to accomplish particular account opening functions, which was the subject of my last blog post.

Our strategy involves developing solutions for each of these segments of the financial institution market, and allowing our clients to choose how much or little of their online customer acquisition process they want to outsource based on the marketing and technology capabilities they already have. We also will be broadening our platform beyond deposit products which have traditionally been our focus. And we intend to evaluate ways to leverage the incredible data in our database for purposes of fraud prevention and benchmarking, as well as other initiatives that will be announced as time goes on. You put all these together and start to see a powerful solution emerging for online customer acquisition, and today's growth capital will enable us to turn this vision into reality.

We are excited to be welcoming Edison Ventures as a new investor and partner. We’ve developed a great working relationship with them and are looking forward to the myriad resources they can bring to the table as we grow. Mike Balmuth (General Partner) and Samantha Roady (from the Edison Director Network and VP of Marketing for Gain Capital) will be joining our board as part of the Edison investment and we are happy to be gaining the benefit of their insight.

We’ll be actively recruiting across the company for great people over the coming months, so please keep an eye on our job openings and don’t hesitate to get in touch if you’re interested in joining our growing team.

And lots more to come, so stay tuned.

What's Our Mobile Strategy? It's All About The Developer Platform.

2010-08-23T09:59:00.000-05:00

Customers and prospects often ask us about our mobile strategy, so I wanted to share our plans here. Currently, our users access our consumer- and bank-facing applications through a standard browser. A few pioneers access our applications from browsers on their smartphones, but it’s a small number and the experience isn’t optimized yet for the small screen. However, rather than invest in developing a proprietary mobile app for each platform, we’re focused on decoupling our existing user interface from our core services, and exposing those services to third parties in the form of a developer platform.

This is similar to what Twitter, Yodlee, and many other companies have done with their architectures – offer a user interface, but allow others to build their own UIs on various platforms for various creative use cases.

For example, some Twitter users access their service through Twitter’s own Web site (www.twitter.com), or their more recent proprietary mobile apps (Twitter for Android, etc). But many other Twitter users access the service through third-party apps like TweetDeck, Twidroid, Foursquare, and Seesmic. Some of these are desktop apps, some are mobile, some are Web clients, and some are not even traditional Twitter apps but rather unrelated applications that integrate specific Twitter functions into their user experience. Yodlee does the same thing – their customers (mostly large banks and personal finance sites) can either license Yodlee’s own end-to-end application, or if they want to offer a custom experience (e.g., Mint), they can write their own UI and integrate it to Yodlee’s underlying functions for payments, account verification, or aggregation.

Platforms are converging – the differences between mobile and desktop are way fewer than three years ago, and will continue to diminish until the distinction loses meaning. Today, what is “mobile?” Clearly BlackBerry is mobile. Installed apps for Android and iPhone are mobile. But what about mobile-optimized Web apps, or the upcoming wave of HTML5 Web apps that look and feel like locally-installed mobile apps? How about applications written for iPhone that run on an iPad — are those mobile? Apps are apps, device distinctions are becoming less meaningful, and things are changing really fast.

By opening up their systems and not betting on a particular platform or proprietary application, Twitter and Yodlee don’t need a specific “Mobile Strategy.” They leverage the ecosystem of third party developers to build apps for various platforms in response to market needs, some of which address mobile use cases. This is the essence of our strategy. We’re offering a developer platform to third parties, starting with select APIs this Fall and eventually encompassing our whole suite. We’ll work with developers of mobile applications, desktop applications, tablet applications, and applications for platforms we don’t know about yet. These developers will come both from financial institutions writing their own account opening applications, as well as from vendors creating apps for financial institutions or consumers.

Got an innovative use for our SDK? Contact me at ckroll@andera.com.

400 Customers!

2010-07-07T14:29:00.000-05:00

400 customers! It was only 10 months ago that we announced the signing of our 300th customer, and seeing the exponential acceleration of our customer base continues to be both humbling and amazing at the same time.

Here's an updated summary of how we've grown:

Date	Customer Count	Elapsed Time
June '10	400	10 months
Aug '09	300	15 months
May '08	200	17 months
Dec '06	100	45 months
Mar '03	1	N/A

We also recently added a customer in Alaska, giving us customers in every state except Delaware.

Why are we continuing to see such accelerating growth in adoption? Financial institutions are realizing that online is an increasingly important channel for customer acquisition. Simply put, consumers are used to shopping online today, and banks or credit unions who still require a branch visit or the submission of paper forms by mail to establish new accounts are neglecting an irreversible consumer trend. Surprisingly, as a recent analyst report by Javelin (also see recorded Webinar summarizing the report) pointed out, still fewer than 1,500 banks and credit unions support online account opening, or less than 10% of the industry overall. In that context, it's easy to see why adoption is accelerating and should continue to do so for some time.

NetBanker: PNC's Online Application "Virtually Perfect"

2010-05-05T14:22:00.000-05:00

Thanks to NetBanker for the nice review this morning of the Andera-powered online account opening application for PNC Bank. In his blog post, Jim Bruene called it "virtually perfect," said it "went off without a hitch," and in a comment sure to make our other pages jealous, said it "has the best account-opening confirmation screen I’ve ever seen." We appreciate it!

Read the full blog post here.

Reg E

2010-03-29T08:51:00.000-05:00

Congratulations to the Andera team for rolling out support for Reg E compliance well in advance of the July 1 deadline. Reg E requires that consumers be given the chance to opt in to overdraft protection on new accounts, and has been a hot topic for financial institutions this year. Andera has developed a standardized approach available at no cost to all customers, as well as a white paper with details.

Update on System Issues

2010-03-17T12:14:00.002-05:00

Update (as of 10/19): All systems have continued running smoothly since the issue was resolved on Wednesday. The root cause has been determined to have been a defect in the replacement switch that was provided by HP, which caused issues with another otherwise functional switch in the network. The problematic switch has been replaced and all systems are stable.

Update (as of 2:00 EST): All systems are back up and functioning properly. We are continuing to monitor the environment closely and remaining cautious until the root cause analysis is completed.

We have had some system issues today and I wanted to provide an update and some explanation here - Andera customers have been receiving regular communications from our Operations team but I thought I would add some color commentary.

On Monday, we had a hardware failure with one of the switches that sat between our Oracle database and storage array. A redundant switch picked up all the traffic so the issue was limited to some performance problems during a two hour window when configuration changes were taking place. A replacement switch was delivered yesterday, and scheduled to be put into production during the maintenance window already scheduled for this Sunday.

Unexpectedly, this morning we had a hardware failure in the backup switch. Given that redundancy was not to be restored until Sunday, this has caused a connectivity issue between our database and storage array, causing a full system outage that is currently ongoing. Our Ops team, along with engineers from HP, are focused on getting yesterday's replacement switch into operation and restoring service. We will then conduct a full root cause analysis to figure out how two switches can fail within a couple of days of each other. We have some theories but need to investigate more closely once the system is back up. One thing that we do know for certain is that this is a hardare issue, not a capacity problem.

We have made very significant progress on system performance and resiliency over the last year, so this is out of character for us given the stability we've achieved over the last twelve months. Of course, we take this very seriously and fully understand the impact any Andera system issue has on our customers and partners.

I will post another update here once we have more information. Apologies for the inconvenience and thanks for your patience.

2009 Recap

2010-02-02T16:12:00.001-05:00

With 2009 in the books, I wanted to recap a few of the highlights.

New Customers. We had another strong year-end, with 51 financial institutions choosing Andera for online account opening in Q4 alone, well in excess of our previous record of 35 set in the previous quarter. This continued momentum brought our overall customer total to 358 as of Dec 31 '09.

Retention. We continued to see high retention among our customer base, with an 89% renewal rate. Renewing 9 out of every 10 customers is great, especially in this environment, and we hope to improve on that even further in 2010.

Implementations. We made significant improvement in both launch pace and quality during the year, with 14 customer go-lives in December alone, a new monthly record.

Satisfaction. The Q4 satisfaction survey results are in, and our customers gave us an average overall score of 4.1 out of 5.0, with all scores increasing from the mid-year '09 survey. 76% of customers responded as satisfied (4) or very satisfied (5). In areas where we have historically been weak in the past, Cycle Time (turnaround time for support requests) improved to a 3.5 out of 5, up from 3.2 in our mid-year '09 survey, and for system performance (an area where we had some well publicized problems early in 2009), it's great to see our focus pay off as 94% of customers gave us a 4 or 5.

There were many other achievements throughout the year, as well as some areas that didn’t go so well, but these are just some of the highlights. We are very excited about plans for 2010 and look forward to unveiling some very significant initiatives in the months ahead.

New Uptime Report

2009-12-21T08:31:00.003-05:00

In the spirit of transparency, we've opened up our monitoring site to the public so that up-to-the-minute information regarding uptime, availability, performance, and system status would be readily available to all. The data is conveniently linked from our client login page, or can be directly accessed at:

http://www.mywebreports.net/andera.html

We're interested in customer feedback on the site, so please let me know what you think.

The Strong Get Stronger

2009-12-08T09:24:00.000-05:00

With the number of bank failures increasing, we frequently get asked how our customer base is holding up. Our informal observation has been that our customers have held up well and if anything we've seen our base get stronger. We finally did some research to validate this observation and found the results to be unequivocal: Over the last few years, Andera customers have been involved in 115 merger or takeover transactions, of which 109 were on the acquiring side.

This means Andera customers are overwhelmingly strong and getting stronger, and are the ones taking advantage of market turmoil to grow in this challenging economy.

To explain this, one theory is that by definition, Andera customers value deposit relationships and generally tend to use their deposits to fund loans. The banks that are failing (of course I'm generalizing here) have been the ones who have funded their loans with high cost liabilities, brokered deposits, or hot money - NOT the ones who have focused on core deposit growth.

This all reinforces the position that online account opening is a low cost channel to acquire high quality core deposits (and by extension, an enabler of success in tough times), and the results speak for themselves.

Q3 Recap

2009-10-02T10:17:00.003-05:00

Congrats to the Andera team on another exciting and outstanding quarter. We welcomed 35 new financial institution clients during Q3, bringing our net total to 318 - the pace of customer additions has continued to increase each quarter to record levels, which we think is a function of growing industry awareness of the online environment as a sales channel, not just a servicing channel, along with the progress we've been making toward simplicity in all aspects of our product licensing and implementation. Excited for a strong end to '09 and beyond!

Performance Continues To Improve

2009-08-31T07:57:00.003-05:00

Our ops and engineering teams have made very significant progress this year on system performance and response times, moving from what was admittedly sluggish performance at the beginning of this year, to what could now be called downright quick. We have more work to do, especially with some of the queries in our Management Console, but on balance we are well within our target range for most pages and well ahead of where we were in just the weeks and months past.

The data from last week for our consumer-facing application (account opening workflow), shows that 95% of pages were returned in 2.4 seconds or less, and 99% of pages were returned in 4 seconds or less. This data excludes pages with third party depencies (ID Verification, core system integration, etc) but is a good proxy for the performance of our system, and reflects very significant progress over similar measurements from earlier this year.

We're continuing to make progress on the Management Console (reporting) side as well, with some improvement already made and more to come, so stay tuned.

Two Interesting Customer Factoids

2009-08-30T09:11:00.002-05:00

Like many other financial technology vendors, Andera's early adopters and initial customers were primarily credit unions, while traction with banks took longer to develop. Over the past eighteen months or so, despite market turmoil, we saw momentum among banks overtake credit unions, and as of this week, with the signing of our 309th customer, we now have more bank than credit union customers for the first time (155 vs 154).

Another interesting factoid is that we now have customers in 46 states, plus the District of Columbia, with only Delaware, Vermont, Hawaii, and Alaska missing.

300 Customers!

2009-08-07T13:21:00.003-05:00

Andera passed a major milestone today with the signing of our 300th customer. Our entire team is deservedly psyched and should be really proud of what we're accomplishing. As these milestones come and go we never lose site of what's important - that we keep our promises and ultimately provide great service to the clients who entrust us with their online channel and increasingly scarce budgets. This is an exciting time and I want to congratulate our awesome team!

Webinar Recording Now Available

2009-07-01T15:25:00.001-05:00

A recording of last week's Webinar featuring Javelin, Alliant CU, and Frost Bank is now available (requires registration):

http://www.andera.com/index.cfm?Action=solutions.demoAndMore

Today's Webinar

2009-06-23T15:49:00.003-05:00

Today we sponsored a Webinar entitled "The Untapped Channel: Trends and Best Practices in Online Account Opening." We were expecting a good turnout given the topic, the speaker lineup (Ed Langel from Alliant Credit Union, Jimmy Stead from Frost Bank, and Mark Schwanhausser from Javelin Research), and the free copies of Javelin's recent report on account opening we were giving away. But we were totally floored to have 1,000 people register, 700 of which actually attended today. What a crazy, enormous turnout.

Mark presented some key findings from his recent report, followed by Jimmy and Ed who both presented case studies of their institutions' successful efforts to use the Web as a sales channel. I wrapped up with some closing thoughts followed by group Q&A.

The funniest part was when one of the attendees must have accidentally hit the video conference button within LiveMeeting which apparently caused a live video of her smoking a cigarette to pop up on every other attendees screen. Distracting? Yes. Memorable? Totally.

Given the enormous turnout, we're going to make every effort to follow up with everyone who attended to send out the Javelin report. If you attended and haven't heard from us in a few days, send an email to afs (at) andera.com.

COCC Conference

2009-06-10T16:16:00.002-05:00

Andera will be at the COCC client conference this week in Massachussets - if you're there, stop by and say hi to Brian Connolly.

Deposit Boom Over?

2009-06-10T15:35:00.006-05:00

Interesting article here on the recent boom in bank deposits. However, I think we may be seeing this come to an end. Our new account transaction volumes peaked in March, which coincided exactly with the bottom in the stock market, as people sought out bank deposits while the market was moving down, and started moving away from deposits once the market turned up. Our transaction volumes have remained down about 15% from their March peak, which suggests money has continued moving away from banks and cash, hopefully a positive macroeconomic sign. Absent another major market correction, competition for deposits may start heating up again.

Partnership with Digital Insight

2009-06-10T13:59:00.003-05:00

On Monday, we announced a new partnership with Digital Insight, a major online banking vendor and a unit of Intuit. Through this partnership, Andera's online account opening and funding platform has been seamlessly integrated with DI's online banking system, and is being offered by DI to their large base of 1,600 financial institution clients. Our teams have spent the last several months coordinating roles, responsibilities, and processes, all in an effort to optimize the implementation and support experience for clients and to maximize their post-launch success.

The first joint customer was Legence Bank, who was nice enough to participate in our press release, and whose positive experience was real validation for the preparation done by the DI and Andera teams before going to market, as well as for our new Edition lineup which further contributed to an easy implementation process. They were a terrific first customer, engaged and on the ball, and were up and running within just a couple of weeks. Since then, we have seen similar experiences with a number of other joint clients.

Needless to say, we at Andera are very excited about this partnership. We've had a long and storied history with DI over the years, including several of them as competitors, and if you've been reading this blog long enough you'll recall I've always thought we'd be better off on the same team. Now that we've gotten to know them so well, their people are terrific, absolutely fanatical about customer experience and satisfaction, and totally committed to their clients' success. We're looking forward to a long and successful relationship.

Accenture Article

2009-05-14T08:49:00.003-05:00

Terry Moore from Accenture published a great article in American Banker this week which is a must-read for any bank marketers interested in turning their online channel into an engine for sales and growth. Excerpt below, and you can read the full article here.

"Banks have been slow to exploit the kinds of Web-based strategies retailers and other industries routinely employ to attract new prospects. Instead of focusing on driving high volumes of customer traffic to their sites and converting that traffic to product sales, as retailers do, banks have overemphasized commodity features on their sites, such as bill payments and account transfers."

Update: Here's another link to the article that doesn't require a password.

Too Candid?

2009-05-05T09:42:00.006-05:00

Javelin Research published a great report today on Online Account Opening which covers the market, the business case, the value proposition, and ten different vendors, all in a lot of detail. We don't have distribution rights so I can't give away any of their conclusions, but I will say that Andera was portrayed very favorably. If you can swing the price tag for the report, I'd highly recommend making the investment.

One area we got knocked on was our occasional growing pains that I have described on this blog. At the risk of getting in trouble for quoting the report, Javelin said:

Kroll is admirably forthright for acknowledging Andera’s problems, but the growing pains are a cautionary note in an industry that demands reliability.

After reading this, it occured to me that after being very candid about our problems, I should take the opportunity to also be very candid about how we've addressed them and the significant progress we've made.

There have really been two trouble spots for us as we've scaled our company:

System Capacity. As I chronicled here, issues occurred in February, as we saw an unprecedented and unexpected spike in transaction volume that we didn't properly plan for. We now believe the spike was due mostly to macroeconomic factors related to an increase in the national savings rate, that caused people to pull money out of securities (stocks, bonds, etc) and into cash, in the form of savings and money market accounts. Because of this surge in volume, our system occasionally slowed to an unnacceptable speed at peak periods (in some cases 14 second page response times) and even came down a couple of times over a couple of days.

As I chronicled here, we immediately reprioritized our ops and engineering teams, and challenged them with completing an already aggressive full year of upgrades in three months. The first of these upgrades was rolled out within a week, and with it came a material improvement in response time, along with a complete restoration of system stability (no more outages). More upgrades were rolled out along the way which continued to shave multiple seconds off response time, and last week we were back down to sub-five-second second page responses (at 95% percentile), which is within our target range. As of now, we have two major upgrades left (one related to our database and another related to our load balancing architecture) to round out our plan, both of which will further improve things. We believe we are today in a comfortable place, and given our new capacity planning and scaling framework, well positioned to tackle any level of higher volumes going forward.

Implementation Capacity. More than a year ago, in January of 2008, we found ourselves overcommitted as a result of faster-than-expected sales. Sounds like a good problem to have, but that didn't make it any less hard to solve. In blog posts here and here, I outlined the issues and our plan to resolve them, which among other things, included doubling staff on the implementation team and overhauling our implementation process from the ground up. It took some time for the changes to take effect, and with all the team growth there continued to be some slippage as people were coming up to speed and learning curves were being overcome. But by the middle of 2008, things were clicking and the shackles came off as we saw monthly launch count double from five to ten during the summer, more than enough at that point to handle new clients and deplete the backlog. Since then, things have continued to accelerate, but we have handled the volume well given our new team structure and improved processes, so there really has not been an implementation capacity issue for quite some time. Additionally, the new Editions we announced recently will further improve things, as many of our new customers going forward will benefit from much more streamlined setups, as evidenced by our recent two week implementation for a Premium Edition customer.

All of this is not nearly to say "mission accomplished," since things will continue to evolve and the challenges will change. But I am saying that I feel like we are quite well positioned to handle future growth now, unlike where we were a year or more ago. This is also not to say that we are perfect today - we're not, and like any company that operates in the real world, things still slip through the cracks and we do make mistakes. But fortunately these instances are manageable and relatively infrequent, and I think most importantly, we recognize the importance of minimizing them.

So am I wrong for being so candid on this blog? I hope not - I know it will turn some people off to find out we have issues, but I hope it convinces a much larger group, which recognizes that every company has issues, that ours are under control, taken seriously, handled competently, and less bad than most other companies out there.

Equifax Issues

2009-05-01T09:20:00.003-05:00

It's been reported in the news recently that Equifax experienced a power outage last weekend which has affected some of their data services. We've seen sporadic issues throughout the week with their eIDVerifier platform which many of our customers use for identity verification. The impact has been more applications than usual being rejected or going into Review status based on the data we are getting from Equifax. We are monitoring the situation, which you can read more about here.

Early Feedback On Editions

2009-04-23T16:50:00.003-05:00

Our first Premium Edition customer signed off today after just a quick two week implementation process. Here's an excerpt from an email they sent us (which I'll keep anonymous since we don't have permission to announce them):

As for the site, thank you so much for all your hard work and for making this project one of the easiest projects I’ve done. The working documents were wonderful and very easy to work with and understand.

This is great validation for our new Edition framework, and justifies our team's hard work developing packaged solutions which can be quickly and easily configured. It's early yet for our new Edition lineup, and we'll need to see a lot more go like this one, but the early returns are promising and our team is justifiably pumped.

Mass High Tech Article

2009-04-19T19:16:00.002-05:00

Nice mention of Andera in recent Mass High Tech article.

Announcing Our New Product Lineup

2009-04-14T11:50:00.004-05:00

Today we announced a revamped product lineup that packages our solution into four different Editions. The press release describes the new Editions, and there is much more detail on our Web site behind our registration form.

The reason for the change was simple. Previously, we offered a single solution with a long menu of choices, which put the burden on our customers to select the features they desired. Over the course of several years and more than 200 implementations, we found that our customers were falling naturally into several buckets, with large or complex financial institutions having a very different set of needs than smaller institutions or ones who just wanted to get up and running quickly. And we only had one implementation process and technology platform to serve both of these distinct groups, which means the smaller or less complex ones were put through a longer and more involved process than probably was needed, which came through loud and clear in many of our post-launch satisfaction surveys.

So we have now bucketed our solution into four Editions to meet the widely varying functionality and price points we have observed in the market. To give you an idea, our new Community Edition is an entirely new offering that can be up and running in a matter of weeks. Compared to competitive solutions, Community Edition still has a robust feature set, but we have limited many of the configuration choices to what we consider best practices based on our experience. In the middle we have our Premium and Premium+ Editions, with the primary difference between them being that Premium+ Edition includes robust integration to leading core and Internet banking systems, while Premium Edition is a non-integrated solution. These two mid-range solutions represent a great compromise between configurability, cost, and time to market, again based on our experience and industry best practices. Finally, Enterprise Edition represents a robust offering with all of our available functionality, integration, and configurability.

We have also updated our pricing model to line up with these Editions, in response to feedback we were hearing from the market:

The first change we made was to define fixed setup fees for each of these Editions, rather than a wide range of setup fee possibilities based on configuration choices made during the contract process. Setup fees increase with each subsequent Edition, but have been reduced across the board (even in the new Enterprise Edition, the new setup fee is significantly lower than a comparable configuration under our old pricing model). And the fixed nature of the setup fees means that once you're in an Edition, you can add any features supported for that Edition at no additional cost.
The second change we made was to tier our transaction fees based on Edition, with the higher Editions involving higher transaction fees. Previously, we had one set of transaction fees regardless of the functionality involved.
The net result on pricing is that customers with basic needs now have a low cost solution not previously available, while customers with more complex needs will end up paying more over time, but only in proportion to the value delivered, and all should save money in the short run.

Finally, we have had some questions from existing customers regarding what impact this change may have on them. You will be getting a communication from us on this subject, but the short answer is that these Editions represent a bundling of functionality that is already available to you for purchase or via the standard upgrade cycle, so you're not missing anything functionally. We have done this primarily to streamline the sales and implementation process for new customers going forward based in large part on your feedback. Your existing pricing is locked in throughout the term of your contract, and you will only see the new pricing model when your contract next comes up for renewal.

Take a look at the info on our Web site, especially the more detailed info behind our registration form, and let me know your thoughts. I'd love to hear your feedback, good or bad. If you're on Twitter you can reach me at @CharlieKroll, or else my email address is ckroll@andera.com.

DI Conference

2009-03-27T12:50:00.002-05:00

Planning my trip to the Digital Insight conference in San Diego this weekend. Drop me a line if you're going to be there so we can meet up.

Analysis Of Account Ownership Verification

2009-03-15T07:20:00.008-05:00

I'll be co-presenting with Yodlee at the upcoming NACHA payments conference in Orlando in a few weeks, and wanted to share some of the slides I've been working on. For background, we have a successful partnerhip with Yodlee in which we integrate their account verification technologies into our online account opening application. This enables us to verify ownership of the held-away account when processing the initial deposit transfer.

For example, say I'm opening a new account at one bank, and funding the initial deposit by transfering funds from an existing account at a different bank. The new bank is going to want to make sure that I actually own the existing account from which I'm withdrawing the funds. Unlike in the credit and debit card world, those capabilities are not readily available in the traditional infrastructure of the interbank transfer (or "ACH") world. This has opened up an opportunity which Yodlee has solved, and we have integrated their solution.

The focus of my presentation at the NACHA conference is analyzing the impact of ACH account verification on the online account opening transaction. We'll be reporting on some very interesting stats, some of which I wanted to summarize here.

The first effect is transaction size. In summary, banks who verify account ownership are more comfortable allowing large transfers, which as you can see in the graph above, consumers readily welcome and utilize. The data shows that, in February, our average opening deposit with verification was over $16,000, versus just shy of $4,000 without verification. This unmistakable difference points to the enormous value of verification. And on a related point, this ability to support larger transfers through verification has become increasingly important recently as the credit crisis has caused household savings rates to increase, and therefore caused our banks' opening deposits since December to skyrocket. Both these effects are shown in the slide above. Another effect of verification I'll be highlighting is on abandonment. It makes sense that the more steps you impose in the account opening process, the more people will drop out before completing. Account verification, and funding more generally, is one of the primary places where people tend to abandon, so I wanted to try to quantify how big an issue this is.

For background, we define an "abandoned" application as one where the applicant is approved based on the bank's rules, but chooses not to complete. We then define the "abandonment rate" as the number of abandoned applications divided by the number of overall attempts (failed + abandoned + completed).

Additionally, I should explain that we offer two approaches to verifying account ownership. The first is called "Instant Account Ownership" which leverages Yodlee's account aggregation technology to verify ownership in a single session by validating the user's online banking credentials at the external institution. The second method is a more traditional approach referred to as "Trial Deposits" where two small deposits are made at the external institution, for which the user has to then come back and verify the amounts in order to prove ownership. As opposed to the instant approach which can be easily completed in a single session, the trial deposit process can take 2-3 days (thereby encouraging higher abandonment). Of our financial institution customers requiring account verification, nearly all offer trial deposits as an option, while 60% also offer the instant approach.

As you might expect, the banks who do not require any funding at all see the lowest abandonment rates at only 3%. Next are banks who allow funding but do not require verification, who see 10% of their applicants abandon. Then there are the banks who require account verification. Those who offer a choice of Instant Account Verification and Trial Deposits see abandonment rates of 16%, while those offering only Trial Deposits see a higher rate of 23%. This gradual progression from 3% to 23% makes intuitive sense as you can see the impact of greater and greater intrusiveness in the process.Lastly, I thought it would be interesting to highlight some additional miscellaneous stats about our experience with account verification.

As the slide above indicates, when given a choice of the instant or trial deposit method, 59% of users choose the instant approach. The fact that 41% still choose challenge deposits, despite the inconvenience and delay, indicates that some people are still not comfortable sharing their online banking credentials at other institutions, which should not be surprising.

The next point above shows the penetration we've seen among our customer base for account verification. A year ago, when our partnership with Yodlee was still relatively new, only a very small percentage of our funding transactions (0.1%) involved verification. By the middle of last year, as our financial institutions started recognizing the value of verifying account ownership, penetration rose to 13% of overall transactions. And by the end of least year, the trend continued as the share of verified transactions grew to around 27%.

And finally, the last point below is designed to demonstrate the accuracy of account verification. It takes on average 1.5 verification attempts to process one ACH transaction. This is primarily caused by (a) the effect of abandonment, as a small number of users will abandon even after verifying, and (b) some inaccuracy in the instant approach, as it may take several attempts with your online banking credentials to get the verification right.

In summary, the data points to pros and cons from account verification, with the pros of higher balances and lower risk generally outweighing the cons related to higher abandonment. I think all these findings are intuitive, but I thought it would be helpful to try to quantify some of these effects. If you're planning on being at the NACHA conference in a few weeks, the folks from Yodlee and I will have lots more detail to share on these findings, and I hope you'll stop by and say hello.

Twitter

2009-03-12T09:10:00.002-05:00

I've started using Twitter and finally see why people love it. I'm @CharlieKroll in case you want to follow me there.

(A Little) New Space

2009-03-11T15:43:00.005-05:00

Anyone who has visited our office recently knows that we're squeezed in pretty tight here, and it's only getting worse as we continue actively growing our team. It may sound cool for a growing company to be bursting at the seams, but the reality is secretly not that great considering the dwindling meeting space and lines for the bathroom. Until we find a new home, to avoid having to make new employees stand (just kidding) or sit in the kitchen (maybe), we're taking over a small amount of new space up on the 4th floor, which will hopefully look a little nicer by the time it's painted and touched up.

Update On System Upgrades

2009-02-24T12:08:00.003-05:00

I wanted to provide an update on our system upgrades after last week's issues. The first phase of our upgrade program was completed successfully last Thursday, and our preliminary analysis is showing a significant improvement to system performance (roughly 50% faster page response times at peak periods), along with the restoration of stability (no incidents reported despite continuation of record load). While there is still work to be done, these results are very encouraging and customers are reporting a significant improvement in system performance.

Last week's upgrades included adding additional servers to the application tier to provide more capacity, making changes to session management to improve performance, software changes to improve data access and retrieval, and segregating application servers to further isolate specific software components.

Phase 2 is scheduled to be completed during an extended maintenance window this weekend, involving additional capacity expansion, upgrades to our load balancing infrastructure, additional software changes to further optimize processing, and extensive database maintenance to improve query performance.

Phase 3 is planned for later in March, in which we will complete the migration of our Oracle database from the current Windows-based environment to a new 64-bit linux platform, on improved hardware.

As mentioned in my previous post, we had planned these upgrades to take place over the course of the full year, but given the issues that surfaced last week, we made the decision to reprioritize and get firmly ahead of things by deploying the planned upgrades on an accelerated schedule.

I'll keep you posted as the additional upgrades progress.

Today's System Issue

2009-02-17T17:37:00.002-05:00

We have been battling with some system issues recently which have been caused by an unexpected spike in volume, described in my last post. Frankly, our capacity planning did not anticipate such rapid growth in transaction volumes. The result has been frustrating slowness recently, especially at peak times, and in the case of today, some downtime.

We know this is unacceptable and are taking strong action to address it. We had already planned significant investments and upgrades to our infrastructure over the course of 2009 - but as a result of these recent issues, we have accelerated all of those upgrades to take place over the next three months, with measurable improvement materializing much sooner. This reprioritization may cause some short term tradeoffs with our product roadmap or support turnarounds, but ultimately we believe this is the right decision.

Keith Roberts, our VP of Operations, will be providing a more detailed update on our plans to customers shortly via email. Additionally, you're welcome to contact him or me directly with questions or concerns.

Volume Surges In January

2009-02-09T13:12:00.005-05:00

We saw a significant surge in account opening volume in January as our customer base grew and as existing customers competed even more aggressively for new accounts. Here's an updated view, courtesy of analytics site Compete, on our aggregate system-wide traffic stats. The data shows a greater than 50% month-over-month surge in unique visitors across our customer base during the month of January, which even caught us a little by surprise given the magnitude.

Separately, I've been delinquent in my blogging duties recently due to a busy schedule, but I promise to get caught up. I'm likely to go silent again for a couple of weeks as my wife and I are expecting our second child any day now.

2008 Year End Recap

2009-01-07T09:15:00.002-05:00

We announced yesterday some details on our 2008 year-end performance, which was mostly very positive despite the challenging economy. As usual, I thought I'd provide some context here beyond what we put out in the press release.

We really are enormously proud of the stats we highlighted in the press release. Doubling revenue and transaction volume, while maintaining positive cash flow, despite the inevitable learning curves and ramp-ups related to doubling headcount, and all against the backdrop of an historical economic downturn, is a testament to the strength and commitment of our incredible team.

However, as I've mentioned previously, we do operate in the real world, so of course not everything was rosy. For example, we found ourselves overcommitted at the beginning of the year with new customers, and struggled to balance too many projects with too few resources. We also really dropped the ball with some customers, especially as our team was expanding rapidly, and we did see a dip in our customer satisfaction scores as a result. Additionally, our data center infrastructure didn't scale as well as we had planned over the summer and we experienced some painful outages. The list goes on but with each mistake I hope we learned a lesson and adjusted accordingly.

Also, sales held up very well through the fourth quarter, but we were not immune to the market downturn. Like most other companies, we saw uncertainty in our pipeline that caused some deals to get pushed into '09. Sales were steady throughout the quarter, reinforcing the unique value of our solution in a tight credit environment, but we didn't see as big a relative surge in December as we've seen previously.

We have a long list of things we want to improve upon in 2009, like accelerating the turnaround on support requests, empowering our account managers to more proactively advise customers on best practices, meeting various price points in the market through a series of "Editions" with varying functionality, and improving system performance and response time. We also have a full product roadmap with exciting new features that will continue to push the boundaries of what an account origination system can do. And once again we're out of space in our office, despite doubling our square footage twelve months ago, so we'll have to figure that out at some point also.

Best wishes for a happy new year.

Six Go-Lives Today... A New Record

2008-12-19T19:44:00.003-05:00

Congratulations to our Implementation team which set a new record with six customer go-lives this week. It wasn't that long ago that we were struggling to break five per month, and 2 per month before that, so today's record represents great progress. Well done!

Winter Weather

2008-12-19T18:52:00.002-05:00

Believing we were one of the few companies left who hadn't cancelled its holiday party this year, wouldn't you know the weather came along and cancelled it for us. We were all set for a big bash tonight at the Federal Reserve in Providence, complete with the holiday carnival that has become a tradition the last few years, but the 8-10 inches of snow in the forecast and city-wide parking ban gave us no choice but to take a raincheck. We'll make up for it next year!

Happy Holidays

2008-12-13T09:55:00.004-05:00

Yesterday, Santa (a.k.a. Matt from our QA team) visited the office to meet the kids of Andera, including my little guy Parker (sitting on Santa's lap below). With some help from Photoshop, courtesy of Lisa from our Implementation team, you can see a good time was had by all. Happy Holidays!

An Interesting Pattern

2008-12-10T07:59:00.003-05:00

We got a call recently from someone who introduced himself as a private investor, who asked for a list of our bank customers. We referred him to our Web site where some are listed and asked why he was asking, and what he said we found very interesting. Apparently, when mutual banks go public, any account holders get preference in buying into the IPO. I remember this from my time living in London in the late 90's when it seemed like nearly the whole mutual savings industry converted to a public company structure, one bank at a time, and there was sort of a craze going on with people opening accounts at lots of banks in hopes they could participate in the IPOs.

Anyway, according to him, he has been doing the same thing here in the U.S. and found that there's a high degree of correlation between those banks who go public and those banks who use Andera for account opening. He says he knows because he has opened accounts online at many of them, and was pleased that he didn't have to travel any more to conduct his business. So, apparently he was asking for a list of our customers since he thought that would be an indicator of future IPOs.

Of course, I have no idea if this is true and am just relaying an anecdote. But I thought it was an interesting correlation that, if true, would demonstrate what we have always believed to be a higher degree of progressiveness among our customer base.

Meet Up In Orlando?

2008-11-17T04:01:00.002-05:00

I'll be in Orlando this week for the annual BAI Retail Delivery conference and would love to meet up with any customers or prospects while there. If that's you, send me an email (ckroll@andera.com) so we can coordinate.

Innovation Economy

2008-11-06T07:22:00.002-05:00

Nice mention today for Andera in Xconomy, although it's something of a good news/bad news story as it highlights the deep economic problems here in our home state of Rhode Island especially among traditional industries. But as bad as things are economically, I'm always a little skeptical of statistics where Rhode Island is first or last in any ranking - given the tiny population and sample size here, even small events can have disproportionately large swings in our rankings.

Partnership With MoneyAisle

2008-10-27T07:11:00.003-05:00

Last week, we announced a partnership with MoneyAisle that I wanted to provide some more context for here. Their Web site, http://www.moneyaisle.com/, allows banks to bid in real-time for consumer deposits. It's like LendingTree but on the deposit side and much, much better - unlike LendingTree, which is really just a lead generation service, MoneyAisle allows banks to actually compete for and capture deposits using a powerful, proprietary auction system.

MoneyAisle is building a network of hundreds of banks to participate in the auctions, while at the same time building a critical mass of users looking for higher rates. And their timing couldn't be better - despite the market turmoil, as I've alluded to here before, banks are seeking deposits more aggressively than ever, which means service providers that help them do that are well positioned in this market.

MoneyAisle's model is to bring depositors and banks together, which is then where Andera takes over. We worked closely together on an integration that allows MoneyAisle users, when matched with a winning bank, to "accept the offer" by instantly opening and funding their new account. It removes all the paper and manual effort from the process, is compliant with applicable regulations, and is totally seamless for the end user.

Banks in the MoneyAisle network can take advantage of this fulfillment service in two ways:

Express. Very low cost and quick to set up, this approach is ideal for banks looking to get up and running without a major commitment of dollars or time. It lacks some of the customizability of our standard platform, and for our existing customers, has separate reporting and back end interfaces, but delivers all the functionality needed to complete a MoneyAisle auction.
Standard. Our standard platform has also been integrated with MoneyAisle, so current Andera customers can complete MoneyAisle auctions without a new Andera implementation or contract (ask us for the "MoneyAisle Integration Option").

We're exciting about this relationship and believe it's a great example of two partners bringing together complementary technologies for a powerful solution that is clearly in demand today.

And by the way, congratulations to the folks from MoneyAisle on being named "Best In Show" at Finovate recently. Well done!

Activity Surges In September

2008-10-16T15:59:00.004-05:00

Back in July, I highlighted the rapid growth we were experiencing in our transaction activity, and I wanted to provide an update since then. According to www.compete.com, our usage continued to grow with another significant surge in the month of September. This can be attributed primarily to the dislocation in the banking sector, with many more people than usual establishing new financial relationships as a result of bank failures or concerns.

As I mentioned back in July, we wouldn't usually publish stats on our volume, but this Web site somehow already does, so I thought it would be worth showing their analysis here.

How About Now? You Guys Still OK?

2008-10-09T08:15:00.002-05:00

With financial markets continuing to deteriorate, I'm getting more and more calls from people wondering how our business is holding up. I commented on this a couple of weeks ago when it seemed like the world was falling apart, a time when it was hard to imagine the outlook for financial services getting any worse. Since then, markets have gotten worse, credit is still frozen, and a recession is now all but a certainty.

And in the midst of all that, I'm happy to report that our business is still strong. For every bank or credit union in our pipeline that has put off a purchasing decision, we have had another prospect tell us that opening accounts online just became their top priority. Financial institutions seem to understand that growing core deposits in this market is an absolute imperative.

And the numbers help tell the story. We added 22 new customers during the three months ending September 30, marking our best Q3 on record and one of our stronger quarters ever. This brings our total customer count to 231. And with only a few months to go before the end of the year, we are still on track to hit an aggressive set of goals, including revenue growth of at least 80% over last year and transaction growth in excess of 100%.

We held a Webinar this week for credit unions interested in trends in online account opening. Despite our moderate expectations for attendance, we were thrilled to have 60 credit unions register, and 50 actually show up. I think that's a good leading indicator that interest in new account growth will remain strong, despite the market meltdown.

Of course we need to be prepared for a very adverse change in our business, but as of today, we're just not seeing it. As usual, I'll keep you posted.

The Bailout Bill

2008-09-28T20:11:00.002-05:00

I was talking last week to a credit union CEO who taught me something interesting - many community banks suffered significant losses on stock they held in Fannie Mae and Freddie Mac when the two were nationalized, but that those losses couldn't be written off for tax purposes since community banks typically have no offsetting capital gains in other securities.

Think about that - if you make $10 in Stock A and then lose $5 on stock B, you're going to pay capital gains tax on just $5 in gains. But if all you do is lose $5 on stock B without having gains in stock A, you don't experience any tax benefit. That's the situation that community banks are in - they lost money on Fannie and Freddie stock, without having any other gains to offset. So as expensive as their losses were, it's doubly bad because there's no tax deductibility for the losses.

That is, until the "bailout bill" draft that was published this weekend and expected to be passed tomorrow. I downloaded the text from CNN and actually read most of it. One part that caught my attention was Title III starting on page 96, which specifically says that any loss by financial institutions in Fannie or Freddie preferred stock can be considered as a deduction from ordinary income. Clearly, this is a direct response to the situation I learned about last week, and will be big news for banks who suffered as a result.

This bill will be fully disected by the media, especially the more controversial parts like limits on executive compensation, but I thought I'd make mention of this potentially obscure provision since I figured it might get less attention.

How's It Going? You Guys Okay?

2008-09-22T06:53:00.004-05:00

People have been asking me recently about whether our business has been impacted by the recent turmoil and restructuring in the financial services industry. From a distance, this probably looks like a terrible time to be selling to banks. But the reality is that it's been a mixed bag, with some positive and some negative effects to our business.

The Good. As evidenced by last night's announcement that Morgan Stanley and Goldman Sachs are both converting to bank holding companies in order to build core deposits as a more stable source of funding, it's clear that in this market, deposits are king. And what does Andera do? We help banks grow deposits and acquire new deposit customers. So amidst all the chaos, the relative value of our service actually goes up in an environment like this.

The Bad. We have seen some banks in our pipeline delay contracts due to uncertainty and a temporary hold on discretionary spending. This time of year (late summer, early fall) is usually slow for us in terms of new sales, so it's hard to measure the impact exactly, but we can point to at least a few isolated cases of deals we felt good about get pushed one or two quarters out. We have also had one customer fail and default on their fees. It was a smaller credit union that has since been merged with a larger one, so we haven't written off the balance yet. This happened three or four months ago, with no other failures since, so actually you could look at this as good news too - one failure out of 225 customers is not a bad ratio.

It's not a coincidence that the high profile failures have primarily been in the investment banks, which operate not at all like commercial or retail banks. Investment banks almost shouldn't have the word "bank" in their names. They have come to operate more like hedge funds in recent years, utilizing enormous leverage to amplify profits and losses on proprietary positions, resulting in high relative returns when the market was on their side. Traditional commercial and retail banks generally do not employ leverage or concentrated positions outside of their core business - many do not even hold the mortgages they originate. So in an environment where the credit markets freeze up, the vast majority of banks will be just fine, for one thing because they have core deposits on their balance sheet, and for another thing because they don't have the same short term funding requirements that investment banks do.

This quote, from an AP article this morning regarding Morgan Stanley and Goldman Sachs, sums it up nicely:

The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.

So the new financial world will be one where balance sheets are stronger, leverage is lower, and returns are more predictable. This world favors traditional banks and credit unions who make up the vast majority of Andera's customer base. And the number one priority for many financial institutions going into 2009 will be growing core deposits, which should be highly positive for our business.

Deposit Insurance

2008-09-17T06:28:00.004-05:00

Despite the recent unprecedented market turmoil in the financials, I've been surprised to not see more new account applications funded with $99,000 in decent days. This has been widely predicted in the media due to uncertainty about retail banks in general, particularly after the IndyMac failure and the heightened concern over WaMu.

The thinking is that consumers with large (greater than $100,000) deposit balances at individual financial institutions will start diversifying those balances en masse to fall under the $100K limit at different banks, thus preserving full FDIC (or NCUA) insurance coverage. If this were happening, we would expect to see an unusually high level of new accounts opened across our customer base with just under the $100K insurance limit, and while we have been seeing a few more than usual, it's not looking like a systemic trend.

There are at least two potential explanations for this I can think of:

The predictions are wrong, and people are generally comfortable leaving their entire balances with individual banks
The people worrying about risk are not going to be opening their new accounts online, and will prefer to go into a branch environment

I'm not sure which is right, or if I'm missing others, but I'd welcome your feedback by email (ckroll@andera.com) or comments to this post.

Updated Funding Statistics

2008-09-12T07:33:00.004-05:00

Last summer, I posted a summary of the trends we were seeing at the time in our initial funding transactions, and I've been meaning to follow up with an update since then.

So this morning I took a look at our activity during the month of August '08, and found the following:

When given a choice, 66% of applicants funded by credit card (34% by ACH)
Average ACH funding was $5,031.77
Average Credit/Debit funding was 469.14

Interestingly, compared to the stats from last summer, a few things have changed.

First of all, credit and debit cards are becoming more popular as a funding method, moving from 58% last summer to 66% now. At two thirds of all transactions, this has to be considered an overwhelming consumer preference that cannot be ignored.

Secondly, the average ACH transaction size has come down significantly ($10,320 down to $5,031), probably reflecting the general shift away from direct bank models focused on high yield, high balance accounts over the past year (although we have recently seen a resurgence as bank liquidity has become harder to come by). Backing up that assertion is the fact that credit card transactions, which are not typically used to fund high yield accounts given the variable costs involved, saw little change in their average size ($435 up to $469).

Symitar Conference

2008-08-26T07:46:00.002-05:00

This week, Andera is returning to the Symitar conference as an exhibitor for the third year in a row. If you're in San Diego this week for the show, stop by our booth and say hi to Kevin Conway and Ted Brown.

Red Flag Alerts

2008-08-25T15:18:00.003-05:00

We're distributing our position paper to clients today on Red Flag alerts related to the FACT Act. Here's an excerpt:

With the FACT Act mandatory compliance date of November 1, 2008 quickly approaching, Andera has developed a robust approach to protecting your institution and its clients from identity theft. Andera and its partners have the ability to screen for every applicable suggested Red Flag as well as unique Red Flags that it has developed according to industry best practices and its experience operating in an online environment. The attached document details the screening performed by Andera and its partners that is related to the Red Flags suggested in the FACT Act.

Let me know, or contact your Andera sales or account manager if you'd like to receive a copy of the paper.

Going Green

2008-08-21T15:07:00.003-05:00

It turns out that opening accounts online is very good for the planet. We calculated that our customers are collectively saving 300,000 pages of paper each month by moving their process online, based on current transaction volumes. According to my (shaky) math, I think that's the equivalent of 600 reams, 60 boxes, or roughly three whole trees per month. The picture below only has 41 boxes, but that should get the point across.

Growth Is Hard (Part 3)

2008-08-06T18:41:00.003-05:00

When I started this blog, I promised to make this an open forum for me to display our blemishes as prominently as our accomplishments and accolades. I know it seems like a lot has been going right for us recently, with some major customer launches, big partner announcements, and significant market momentum. But as I have described in previous posts, we have our share of problems and are finding growth to be, simply put, hard.

As I've publicly chronicled here, we've gone from fifty customers to over two hundred in a relatively short period of time. And over that same short period we've grown our headcount from twenty to more than fifty.

And amazingly, I've never met a person that has experienced company growth like that without the accompanying growing pains. The amazing part is that even when you know what to expect, you cannot avoid some level of disorganization and miscommunication when you are adding people rapidly and building management where there was none previously, regardless of how talented, smart, and dedicated the team may be.

Anybody who knows me is aware that I think and talk about this constantly, and am obsessed with shielding our customers from any chaos we may have internally. But it doesn't always work. Fortunately, the great majority of our customers are well cared for and happy. But we admittedly have a handful of customers that, despite our best efforts and intentions, do not get the service or treatment they deserve or expect. Sometimes this takes the form of an implementation that takes longer than planned. Or a core integration that simply doesn't work. Or a support call that never gets returned. These are all things that, in isolation, are easy to fix and avoid. But when you put hundreds of customers and projects together, there is just no way I know to perform at 100% all the time. And I take this personally because anything short of that cheats the customers not getting our best.

Here's an excerpt from a note that an unhappy customer sent to a member of our team today:

I have read the blog your CEO generates listing the wonderful experiences that other customers have had with your product. I keep restraining myself from clicking on the “comments” icon, and submitting my personal views on the product and relating our experience.

I'm sorry to say that this customer has a right to be mad, and since they didn't want to comment on my blog, I'm doing it for them. Among other things, we didn't properly communicate that they were going to be an early adopter on one of our more recent core system interfaces, which is standard operating procedure for us. And the integration didn't go well. Core integration (especially for account opening) is complex and sometimes messy stuff, even with a standard adapter, and this particular customer's integration was ugly. And then today, after we thought the worst was behind us, a freak connection failure occured with one of their third party decision services due to incorrect credentials. Which never happens because it is so easy to prevent. So, as if regaining their trust wasn't going to be hard enough after the core integration issues, today's one-in-a-million credentials issue will make it that much harder, if it's even possible at all now.

Why in the world would I talk about this here? Partly because it's on my mind. And partly as a reminder that, as well as things are going, and as happy as most of our customers are, we operate in the real world and are not perfect. I've heard people call growing pains like these "the kinds of problems you want to have." Maybe, but that doesn't make them any less hard, or make us any less committed to solving them.

If nothing else, I guess the message is that we take these things seriously, and are not just another vendor who doesn't care. That will be little consolation to the customer above who is unhappy with us today. But I'm optimistic we'll get the chance to regain their trust and prove why circumstances like this are so rare for us.

Recent Customers In The Press

2008-08-06T17:37:00.002-05:00

Interesting article here in Bank Technology News recently highlighting two of the more progressive online banking services to be launched recently. Note the nice mention of Andera toward the end. These launches were also covered on Netbanker here and here.

Partnership with Open Solutions (It's Official)

2008-07-24T20:02:00.004-05:00

Today we formally announced our partnership with Open Solutions (see press release here), which was not-so-subtly pre-announced (with permission, of course) back in April at their client conference. This relationship has been a long time in the making and we're glad it's finally official. Up until recently, we were relatively unknown within their client base, but that has already started to change in just the short time since the client conference as buzz has been building. If you're an Open Solutions client, stay tuned for updates on the integration - I promise it will have been worth waiting for.

Usage Up 45% in June

2008-07-10T15:31:00.005-05:00

I wouldn't normally share our traffic stats, but analytics site Compete already does somehow, so I wanted to highlight the user growth we've been experiencing. Notice the 45% monthly jump in users from May to June, and the 375% jump in users over the past twelve months. These users are primarily bank customers opening new accounts.

Today's System Issue

2008-07-08T15:49:00.003-05:00

If you're a client, it's probably no secret that we've had a couple of brief system outages over the past few days, lasting around 5 or 10 minutes each. Our team has diagnosed the issues and undertaken short term steps to make sure they don't occur again, plus accelerated some longer term performance improvements originally slated for later this year.

I just wanted to acknowledge the issues here, let you know how seriously we take them, and apologize for the inconvenience. Problems like these are rare for us and we're going to make sure they stay that way.

50 Employees

2008-06-27T05:53:00.003-05:00

We passed another major milestone this week, reaching the 50 employee mark for the first time. Gabriel Forti and Jennifer Mathieu both started on Monday and can both lay claim to being number 50.

It wasn’t that long ago that our headcount was 20, and there's no question we've had our share of challenges managing through that growth and shielding our customers from it. On balance though, I think we're doing a good job, and I want to commend our team for staying versatile, positive, and energetic in the face of almost constant change and enormous pressure. Our (very) low employee turnover is a great sign of how well we’re doing – many companies growing at our rate develop a revolving door which makes growth and continuity that much harder.

We are eons ahead of where we were twelve months ago in terms of our scalability, our processes, and our technology. As I keep saying, we have a lot further to go, but our progress this year has been awesome thanks to the hard work and dedication of our team, now 50 strong (and growing).

CheckingFinder

2008-06-03T08:05:00.002-05:00

After being named a "Best In Show" winner at Finovate last month, CheckingFinder.com has officially launched this week (see their press release here). FirstROI and BancVue have collaborated to produce this awesome site which allows consumers to search for and open checking accounts yielding unique rewards (such as interest rates as high as 6.0%) from community financial institutions across the country.

Andera's technology has been integrated to support the seamless opening and funding of accounts originated through the site. It's an innovative arrangement for us that leverages our platform capabilities in new ways, and we're happy to be a part of it.

Check it out at www.checkingfinder.com - I guarantee any account you find there will be way better than your current checking relationship.

Our 200th Customer

2008-05-23T12:31:00.004-05:00

We announced today the signing of our 200th customer, which is a huge milestone for us. It was only six months ago that we signed our 150th customer, and seeing the exponential acceleration in our customer count is both humbling and amazing at the same time.

Here's a summary of how we've grown:

Date	Customer Count	Elapsed Time
May, '08	200	6 Months
Dec, '07	150	12 Months
Dec, '06	100	17 Months
Jul, '05	50	26 Months
Mar, '03	1	N/A

Does that mean we're going to add another 50 customers in the next four months? I'm not counting on it, since the summer months are typically slow(er), but as usual I'll let you know.

An Unusual Approach

2008-05-02T06:30:00.003-05:00

Well this is new.

I saw a startling commercial on CNBC this morning featuring some apparent retirees and other geriatrics looking into the camera talking about how insecure online banking is, and saying they'd only be willing to bank online if their bank implements an out-of-band authentication system called PhoneFactor. The commercial asks the viewer to call their local bank President and tell him or her they need this thing. And the Web site associated with the ad is an HTML form that offers to send off a fax (yes, a fax) to the bank President of your choice.

I have no idea what to make of this campaign, but I'm pretty sure it's not going to work. Give them credit for originality, though.

By the way, if you do find yourself on the phone with your local bank President praising the merits of out-of-band authentication, maybe let them know while you're at it they should also look into online account opening from Andera. On second thought, maybe you should just look for a hobby instead.

Getting Ready For Finovate

2008-04-28T21:00:00.002-05:00

It's not easy to deliver a meaningful demo in five minutes, which is one of the reasons Finovate is such a great format. It forces the presenting companies to distill their message into a very concise format, and no good app should be too complicated to show quickly. It's also a little frustrating as a presenter, because I have to gloss over all sorts of cool stuff that the audience is going to miss, much of which is central to our value proposition.

And anyone who is familiar with our product knows that on the surface, it looks incredibly simple. Without being able to talk about everything that goes on behind the scenes, like the risk scoring, core integration, workflow, dynamic rules management, analytics, funds transfer processing, and things like that, it's easy to miss how revolutionary our technology is.

When you forget all the rocket science, what we have in its most basic form is a very simple user experience that is designed for consumers sitting in their bedrooms who in most cases are first time users of our system. Unlike online banking or bill pay systems, where users learn the functionality over the course of repeated uses, ours is generally a system that a user comes into contact with exactly once, the first time they open their accounts with a bank. There are exceptions for existing customer account opening, but generally this is one and done.

So it has to be really simple, and that's what I'm going to show tomorrow. And if you see it and assume you could "just build it," come see me afterward, since we're hiring.

Mike Huckabee Flies Commercial

2008-04-25T19:29:00.006-05:00

For some reason, Mike Huckabee would have been about the last person I was expecting to sit next to at the airport yesterday in Atlanta. But there he was. Notice the matching toothy grins.

SymEast Conference

2008-04-17T14:33:00.003-05:00

We're in Memphis this week at the SymEast users conference, our third year in a row. Ted Brown is working our booth, and Kevin Conway will be presenting an overview of our solution for Symitar credit unions tomorrow afternoon in Grand Ballroom C. If you're in attendance, be sure to stop by and say hello.

Partnership with Harland

2008-04-17T13:43:00.002-05:00

I know we've announced a number of new partnerships recently, and from a distance it may seem like little more than marketing hype between companies looking for PR. I've seen plenty of "partnerships" like that come and go at other companies. But let me tell you, each of our recent partnerships are grounded deeply in substance that has little to do with publicity, and everything to do with seamless integration and joint solution development for mutual customers. And our new partnership with Harland (see today's press release) is a great example of that.

We have worked informally with various business units within Harland since 2006, when we developed a real-time integration to their UltraData core processing system that today supports more than 20 credit union clients, including some of their largest. That same year we also announced a partnership with Cavion, an Internet banking vendor that was subsequently acquired by Harland. Recently, we assembled a beta group of banks on Harland's Phoenix core system, and expect be releasing that integration to other Phoenix banks shortly once the beta is complete.

And all this was done prior to today's announcement with Harland, before any formal relationship existed between our companies. So today's news has been a long time in the making, probably not very surprising to anybody within the Harland ecosystem, and I hope viewed as good news to all the Harland clients who have been waiting for them to make an announcement like this.

Partnership With Open Solutions

2008-04-08T09:30:00.000-05:00

We're in Orlando this week to announce a partnership with Open Solutions at their annual client conference. The formal joint press release hasn't been distributed yet, but we're not keeping it a secret either, so look for the official PR coming out soon.

The idea behind the relationship is two-fold. First, we will be working together with them to build and support real-time integration to their bank and credit union core systems. We have a lot of experience building core integration both with and without the cooperation of the core, and let me tell you, it works a lot better when they're involved and motivated to see it go well. The second pillar of the relationship is a joint marketing relationship, where OSI will represent Andera to their customers and be able to answer questions about the integrated solution.

We're in the process of securing a beta customer or two to participate in the initial integration, which we expect to be in general release later this year for all OSI core customers.

It's no secret that OSI recently announced a similar sounding partnership with a certain competitor of ours whose name starts with "u" (with that announcement arguably timed more strategically to fall right before the client conference this week). I think it's a good sign that OSI is hearing so much account opening buzz within their customer base that they agreed to partner with more than one company.

If you're at the OSI conference this week, stop by our booth and say hi to Kevin Conway, Ted Brown, and Brian Connolly.

BarCampBank New England

2008-04-08T07:38:00.002-05:00

Not having ever heard of a BarCamp before, I was skeptical when Morriss Partee from EverythingCU.com sent me an invitation for this past Saturday. It was described as an "un-conference" with no formal agenda, with the idea being that if you get enough smart, interesting people together in a room under a theme (in this case financial services), the conversation will evolve and leave everyone knowing more than before they came. That certainly happened.

Other attendees beat me to it and have already presented great summaries of the day (see Ron Shevlin, Morriss Partee, Andy LaFlamme, and Ginny Brady). I was glad to be included, and now that I know what to expect, for those of you in New England, don't be surprised if you get an invitation from me to attend next year.

What A Testimonial!

2008-03-07T08:49:00.003-05:00

Thanks to Bill Chapin at M&T Bank for providing such a glowing recommendation on my LinkedIn page:

“Charlie and his team were a pleasure to work with. We implemented our Online Account Opening product in Sep '08 [sic]. We worked with Charlie and his team for over 1 year in the planning and design. His team never complained about the many meetings and questions we asked. His team was by far the best vendor relationship I have experienced. They met all dates, promises and helped whenever asked to provide a quality solution.”

Bill reminded me that this is his personal recommendation, not that of M&T Bank who doesn't give endorsements. Thanks Bill! We (along with ChexSystems, our partner for the M&T relationship) appreciate it.

IBM On Account Opening

2008-03-02T07:58:00.006-05:00

Anyone notice the new IBM ad in this week's BusinessWeek? The message on the prominent two-page spread begins with:

"IBM is helping banks reduce the time it takes to open an account to minutes rather than hours or even days."

We couldn't have said it better ourselves. IBM is coming at the problem from the perspective of enterprise integration and real-time enablement of legacy systems, versus Andera who approaches the problem from an application perspective. And while their focus on account opening is an example of a larger emphasis they are putting on enterprise integration more generally within banks, their efforts are totally complementary to what we are doing - in many of our implementations for larger banks, the limiting factors preventing true real-time enablement and straight-through processing are constraints within the bank's legacy infrastructure, due to antiquated architecture that IBM can help update.

So with IBM (and others) focused on that end of the problem, plus the innovations we're making on the application side, the vision of a comprehensive, end-to-end, fully real-time account opening solution becomes possible for even the largest banking institutions. Plus, seeing a high-profile spotlight on account opening from IBM on page 2 of BusinessWeek means the niche we started carving six years ago is an idea whose time may finally have arrived.

Boston Globe Article

2008-02-27T14:38:00.002-05:00

Providence was profiled today in a Boston Globe article on progress the city has made toward becoming a tech and entrepreneurial hub. The Providence Geeks, a great organization I'm proud to be a member of, was covered favorably, as was the Slater Fund (one of our investors), and Andera even had a brief mention - although if you didn't know better, you might think from the article that Andera was (still) a Web development firm. And yes, it's true, our first office 8 years ago was in close proximity to a needle exchange, among other colorful neighbors. The neighborhood has come a long way since then.

I agree with the spirit of the article, that Providence has made a lot of progress and can now lay claim to an increasingly significant tech scene. Check out the article here (the Andera mention is on page 2).

Partnership With Financial Fusion

2008-02-26T13:11:00.003-05:00

Today we announced a new partnership with Financial Fusion, a division of Sybase. Financial Fusion provides online banking and other enterprise systems to large banks nationwide. The relationship is an extension of our strategy to partner with leading Internet banking vendors, aimed at extending the functionality of our account opening solution, as well as expanding the accessibility of our solution within the marketplace.

Separately, I'm gearing up for a well-deserved vacation the rest of this week. I'm behind on a few other updates I've been meaning to post here, which I'll do when I get back.

Finovate Startup

2008-02-05T08:41:00.000-05:00

We're headed back to Finovate - this time it's their Startup conference in Silicon Valley on April 29, '08. We're excited to again be chosen among an elite group of presenters. And if it's anything like the first Finovate last Fall in New York, it will be a great event and definitely worth the price of admission for anyone interested in the next generation of financial technologies. See details of the event here, and drop me a line if you're planning on attending or being in the area.

2007 Year In Review

2008-01-28T11:44:00.000-05:00

A little late, but I thought I'd summarize some of the highlights from the year just ended:

We signed 70 new financial institution customers during the year, bringing our total customer count from 103 to 173 at year end '07, and widening our lead as the #1 provider in the market
We grew revenue by 71% over 2006
We achieved full-year cash flow positive for the first time
We grew headcount by 50%
We grew our implementation launch pace by 40%, to 4.2 per month in 2007 (up from 3 per month in 2006)
Customer satisfaction with our implementation process remained at record levels of 4.2 out of 5.0, as graded by our customers immediately after their go-lives
We grew our transaction count (comprised only of successful, funded applications) by 114%
We processed initial deposits of $109 million during the year, up 62% from the previous year
We had no monthly violations of our service level agreement (99.5% uptime)
We announced and implemented key partnerships with Yodlee, S1, and others

Overall, it was a great year. As I've been sharing in recent posts, we have our share of challenges for the year ahead, but in general things are going well and we're continuing to fire on all cylinders here.

New Aite Report

2008-01-28T11:30:00.000-05:00

A new report from Aite Group examined IT spending priorities among credit unions, and found online account opening to be among the top priorities. Here's an excerpt from Aite's press release this morning:

According to the report, titled "The IT Priorities of U.S. Credit Unions," credit unions are often early adopters of technology and tend to be more technologically savvy than banks of a similar size. Among the major solutions approximately one-third of the top 1,200 U.S. credit unions are likely to deploy or replace over the next 24 months are commercial lending solutions (35%), customer analytics (33%), online cash management solutions (27%), core banking systems (27%) and CRM (27%). The study also found that online account opening, customer analytics and online member service tools are among top priorities. Surprisingly, technologies such as remote deposit (8%) are a low priority.

Credit Crunch

2008-01-23T14:30:00.001-05:00

I've had some questions recently about how the current market turmoil, particularly among banks, is affecting our business. What I'm hearing from bankers is that our solution actually gets more attractive when the credit markets dry up, because consumer deposits (which we help banks gather) become a more attractive source of funding. Alternates such as securitization and wholesale borrowing are both only practical in healthier credit markets, so the relative value of consumer deposits goes way up in circumstances like we're seeing today.

Would love your feedback if you agree or disagree with this.

Growth Is Hard! (Update)

2008-01-19T10:00:00.000-05:00

As I recently alluded to, we've had a rough couple of weeks. We've found ourselves as a company in a position I always promised I would never let happen - being overcommitted. Fortunately, most of our customers remain well-supported and happy, although there's a segment of our implementing customer base that is admittedly not getting the attention they deserve or expected. This is nothing more than bad planning on our part, and we've spent the last couple of weeks focused completely on how to resolve the bottlenecks, quickly.

Some of the steps we have taken include redistributing the project load among implementation managers, bringing on Keith Roberts as VP of Operations, significantly accelerating our implementation team hiring plans, instituting some more efficient process changes, and expanding our software development team. These steps, among others not mentioned, will fully address the implementation capacity issues in relatively short order. The result of all these changes will be to effectively double our implementation launch pace, from the 4.2 go-lives per month we averaged in 2007, to over 8 in 2008. That should let us get back ahead of sales this year, and give us the foundation to crank it up even further if sales outperforms expectations again this year, like they did last year.

Some people ask me why I'm so open about things like this. As I pointed out in my very first blog post a couple of years ago, I want this to be an open forum for me to display our blemishes as prominently as our accomplishments and accolades, and I hope this balance helps signal our commitment at least to doing the right thing. I know posts like this could (will) be exploited by our competition, but all I can say is that by the time they get the message out that Andera is overcommitted, we'll have already solved our problems, and they'll still have theirs. Although they won't be talking about them.

The offer is still open for any clients (or potential clients) concerned about this to call me, any time. I'm at 401.621.7900 x11 or ckroll@andera.com.

Update On Our Core System Integrations

2008-01-09T15:39:00.001-05:00

When someone asks me what separates us from other account opening vendors, I always include among our top differentiators the depth and breadth of our integrations with bank and credit union core systems.

We have always been very serious about core system integration, starting with our first Fiserv Summit integration in 2004, to today when we have more core systems integrations than any other account opening vendor. And not only are our integrations more numerous - they are the deepest (richer functionality) and most standardized (fully pre-built and configurable) in the market.

I'm happy to report that we recently added Fiserv XP as a business partner, and will be wrapping up our integration to their new XP2 core system a little later this year. XP becomes the latest in a successful line of partnerships we have with various Fiserv business units, which include Summit, IntegraSys, USERS, AFTECH, and VISION.

Additionally, we have a number of additional core integrations on our release schedule for 2008, most immediately including Fiserv CBS, TotalPlus, and Harland Phoenix, among a number of others a little later down the line.

Growth Is Hard!

2008-01-09T08:47:00.001-05:00

In the spirit of openness, let me talk about some issues we're facing here and what we're doing about them.

As I mentioned, we had a pretty spectacular end to 2007, which means basically that we had a lot more clients sign up with us than we expected in even our most aggressive forecast. It's a good problem to have, but it's causing some short term constraints which I know at least some of our clients are feeling. I apologize for this, and want to be on the record saying we recognize the issues and take seriously the need to address them.

I think we have always been known for our high degree of responsiveness and commitment to client satisfaction, and believe me, that philosophy remains intact. Keith Roberts, our new VP of Operations, has been charged with expanding our implementation capacity and correcting any temporary issues with our responsiveness, and I think you'll start to see results soon.

If you're a client and want to talk about this, you're welcome to call me any time at 401.621.7900 x11. Now, back to work...

Welcome, Keith Roberts

2008-01-03T10:02:00.000-05:00

First of all, let me apologize again for neglecting my blogging duties in December. We had a pretty spectacular end to the year and were all pulled in a lot of directions, myself included. As promised, I expect now to get back to the business of blogging and letting the world know candidly what we're up to at Andera.

First, I need to announce an important addition to our management team. Keith Roberts has joined Andera as Vice President of Operations, a new role for the company. Under Keith, Operations will encompass Implementation, Support, Networking, and Information Security. Keith comes to us from Tuition Management Systems, where he managed an operational team that grew significantly over his 7+ years with the company, prior to its recent acquisition by Key Bank. Keith will be a key addition to our team, and his experience and perspective will be instrumental in helping Andera get to the next level.

At the same time, Craig Wilke will become Andera's Vice President of Products, a role which will allow him to focus fully on our product roadmap, including ownership of all features and functionality going forward. A key aspect of this role will be working more closely with customers on the next generation of Andera's products, including a soon-to-be-formed Strategic Client Advisory Group.

Happy new year!

New Branding

2007-12-19T11:57:00.000-05:00

It's been a very busy month, and I apologize for not keeping up recently with my blogging duties. I've got a lot to say, just not a lot of time to say it, and I promise to make up for lost time after the new year.

Anybody paying attention may notice that we launched our new corporate branding this morning, starting with our logo and Web site, and permeating all of our messaging, collateral, and positioning. This was a big effort, and very important as we position our company for the future.

Among the changes you may notice:

We have adopted a tag line. "Always Open" reflects our commitment to open systems and technology, while at the same time reminding our customers and prospects about the need to always be opening.
We have dropped the "New Accounts Online" product name. We found our customers referring to our company and our product interchangeably as "Andera," and that the name "New Accounts Online" held little mind share among the constituents we polled. As other providers of Software-as-a-Service ("Saas") have done before us, we are purposefully blurring the lines between company and product, and formally establishing our positioning simply as "Andera."
We have updated our logo. It still resembles the old logo, and we have maintained the basic font and swoosh, but we have tightened it up, made it bolder and crisper, and more representative of the strength we want to reflect.
All of our marketing collateral (including marketing Web site) has been redesigned and re-written to reflect updated messaging.

Hopefully you like the changes, and I'd welcome any feedback (negative or positive) you'd be willing to share.

Our 150th Customer

2007-12-03T15:53:00.001-05:00

Welcome (and thank you) to Cambridge Savings Bank, who today became our 150th signed customer, truly an exciting milestone for us. Jennifer, we appreciate your business and look forward to working with you and the CSB team.

Finovate Video

2007-11-18T11:16:00.001-05:00

Videos of each of the Finovate demos have been posted online - anybody curious to see my demo can check it out here.

Going To BAI?

2007-11-06T09:06:00.000-05:00

Kevin Conway and I will be in Las Vegas next week for BAI Retail Delivery. We're there just to meet customers and partners, so drop me a line (ckroll@andera.com) if you'll be there too.

New Partnership with NCR

2007-11-05T11:05:00.001-05:00

Our announcement today with NCR eCommerce represents another step forward in our strategy to partner with leading Internet banking vendors. Under the partnership, Andera becomes the preferred provider of online account opening & funding solutions to NCR's broad base of Internet-banking clients.

They invited us to participate a couple of weeks ago in their annual client conference, and I was struck by how much their clients seem to love them. That's refreshing to see, in a world where banks unfortunately seem to be liking many of their technology and processing vendors less and less. Fortunately, Andera shares NCR's same commitment to responsiveness and customer satisfaction, so I'm optimistic that mutual clients will find the partnership to be a good fit all around.

Broad Versus Deep

2007-10-20T16:42:00.000-05:00

This week took me to the IA Systems client conference in Saratoga Springs, NY. Andera was exhibiting there as an IA Systems business partner, and I had the pleasure of co-presenting with the always amicable Dinesh Sheth, CEO of uMonitor, on trends in the account opening market.

Dinesh and I agreed about most things, including the need for a good account origination system to span a theoretically unlimited range of banking products - consumer deposit accounts, commercial accounts, trust accounts, brokerage accounts, loans, and others.

Trouble is, unless you are providing a very rudimentary origination platform or a simple framework, each of these account types has their own very specific workflow, integration, regulatory, risk, and 3rd party requirements to consider. Building a system that deeply addresses a broad range of account types is, simply put, a really hard thing to do.

But based on increasingly clear market demand, it's where we're pointing our roadmap. We are already underway with a beta customer integrating rich capabilities for commercial, small business, and trust accounts, for general release in Q1 '08. And we recently signed our first brokerage customer who should be going live around the same time.

But what about loans? We have long established interfaces to lending decision engines like Equifax Decision Power, Experian Scorex, Instant Prescreen, and QualiFile Credit for rich cross selling of credit products. And we also have integrations to loan origination systems such as APPRO (in production) and IA Systems (coming soon), both excellent systems and quite common among our customers. But is this enough? Do financial institutions want separate, best-of-breed systems to support different account types, no matter how integrated they are? Or will the ultimate answer be a single account origination platform that supports deposit, loan, and all other products?

The answer will probably depend on what segment of the market you're talking about. All else being equal, smaller financial institutions will probably have a preference for a single platform if the functionality is sufficient for their needs. Backing up this thesis is the traction we've seen in the smaller end of the market from MeridianLink promoting a combined deposit/loan application system. From what I have heard, they don't go nearly as deep with deposit account opening or funding as we do, nor do they go nearly as deep with loan origination as APPRO or IA Systems do. But having even light implementations of both in one platform seems to be a message that is resonating.

I'd love your perspective on this, if you've got any thoughts you'd be willing to share. Post a comment or just send me an email directly (ckroll@andera.com).

Yodlee Summit

2007-10-11T08:47:00.000-05:00

I'm in San Francisco with Yodlee at their annual Customer Summit, debuting the new Yodlee/Andera integrated solution. I talked about this when we formalized our alliance over the summer, and in the short time since, before the integration was even complete, five customers have signed with either Yodlee or Andera for the combined solution. And now we're just weeks away from the first two of those customers going live.

As a reminder, the combined solution leverages Yodlee's strengths with funds transfer and funding account verification, alongside Andera's strengths with account opening, decisioning, and core system integration. The application is essentially Andera's online account application platform, with Yodlee's components integrated seamlessly behind the scenes.

Response at the conference has been very positive thus far, and when taken alongside all the other amazing things that Yodlee is showing their customers here, they are really an exciting company to watch.

Finovate '07

2007-10-02T19:37:00.000-05:00

What a great event Finovate turned out to be. They picked 20 of the "most innovative companies in the financial, banking, and lending industries," and gave each 7 minutes to DEMO their product or technology. No powerpoint, no prepared speeches, no Q&A - strictly demos, in rapid-fire "speed dating" style.

Among the 20 companies, two major themes were present.

First, several companies fell into what some call the PFM ("personal financial management"), like Quicken over the web. Pure plays in this space were Jwaala, Geezeo, and Mint, while Digital Insight and Yodlee were more integrated providers that demo'd some type of PFM built into their broader suite. Each were eye opening, and you really have to see them in action, but once you do, it's obvious why this kind of thing is a good idea. It made particular sense to me in the Digital Insight case, who has obviously done a tremendous job of collaborating with the Quicken team from their new parent company Intuit already, because their new functionality is really awesome. I had heard rumors about how well DI's new release showed, and seriously, it looks terrific. I'll be curious to see how standalone PFM (like Jwaala, Mint, and Geezeo) ends up faring relative to the more integrated providers. In either case, this is real Web 2.0 stuff finally coming into financial technology, a very welcome introduction.

The second major theme was wireless, and to my knowledge all the early players in wireless banking were here - Firethorn, Clairmail, mFoundry, mShift, and Monitise. The battle lines are being drawn between WAP (wireless browser based) and client (installed software on the mobile device), with Clairmail I believe being the only one to lay claim to offering both. Firethorn's approach is compelling, given their partnerships with some of the major wireless carriers, but all companies showed well and have unique and viable approaches. My understanding is that wireless adoption is coming more from the banks than from consumers still, with consumer adoption being still very light, but one suspects that will change over time.

Outside of those two major themes, Mortgagebot debuted a jaw-dropping new portal to help consumers find the best mortgage. They have enlisted 250 of their 1000+ financial institution customers to participate in this marketplace, and the idea is simply terrific. Serious kudos to them. iPay debuted a new wireless payment option via SMS, which is quite cool, while CheckFree showed the new, integration between home banking and bill payment formed by their acquisition of Corillian. Prosper and LendingClub showed their respective approaches to social lending, which I also really happen to like as an idea. I wish Zopa had been here to round out the social lending triumverate, since I am intrigued by their model as well.

I presented Andera's online account opening and funding platform, including our new integration with Yodlee's funding account verification service, and was seriously overwhelmed by the response. The attendees were all engaged, and I got great feedback during the networking session afterward. And I actually ran out of cards - how cool is that.

Congratulations to Jim Bruene and his team for an event well done.

Come On, Galaxy

2007-10-01T12:42:00.000-05:00

I know they say imitation is the highest form of flattery, but couldn't the creative people at Fiserv Galaxy have come up with their own presentation graphics for their competitive account opening product, instead of taking ours?

If you look closely at the slide below, taken from a recent Galaxy presentation on their online account opening product, you'll see four (can you find them all?) of Andera's standard presentation graphics on one slide, with CashEdge's "drop-off" graphic smushed in the middle. These are the actual graphics from Andera and CashEdge, not even close copies, making it sort of funny and amazing at the same time.

Galaxy, if you're going to compete with us, we'd appreciate if you'd come up with your own graphics.

Bank Technology Summit

2007-09-25T21:08:00.000-05:00

I was in Memphis today speaking at the Bank Technology Summit hosted by Jimmy Sawyers and the rest of the folks at Securas. The event was well done and I was glad to be a part of it. One of the better give-aways I ever saw was the 42" high def plasma TV - not too shabby. Ran into some familiar faces in the vendor exhibitor hall, including our friends from Q2 Software.

Audience was primarily community bankers, and the recurring theme I heard was "Our CEO is demanding we start opening accounts online, but our compliance people say it wouldn't be compliant." Fortunately, having done this once or twice before, I offered to walk them through each of the applicable regulations and show how what we're doing is not only compliant, but arguably less risky than what they're already doing. Every bank will have to get comfortable with the various issues at their own pace, but it's clear that mainstream adoption will continue to accelerate, particularly given the level of buzz in the market now, and even more so as questions of regulatory compliance and risk management become more widely undertsood.

The title of my presentation was "Online Account Opening - The New Imperative" and it went through some of the background, business case, market trends, and regulatory impact of online account opening, along with some real-world aggregate results our customers have experienced. I'll be doing a similar presentation at the IA Systems conference in a few weeks in Saratoga as part of a joint session with uMonitor, which should be interesting.

Must Read For Anyone Interested In Software

2007-09-25T09:18:00.000-05:00

I'm obsessed with the Joel on Software blog (thanks Stephen Thompson for introducing it to me a while back) - anybody with an interest in software development is crazy not to read it. Problem is, if I linked from here to every one of his posts I found fascinating, I'd be at it all the time. So add it to your RSS feeds, and I promise not to keep bringing it up.

For a particularly insightful example of why he's so brilliant, check out this recent post.

Harland Conference

2007-09-21T10:42:00.000-05:00

We're at the Harland Client Conference this week in San Diego and boy, what a great show. It's a good example of what I think a client conference should be. First of all, the turnout is terrific. Rather than having each of Harland's business units hold their own conferences at different times and in different places (i.e. Fiserv), Harland does one big show for all their clients. Second of all, the vendor floor sessions (where attendees walk around the various vendor booths) are limited to narrow windows of time, several times a day. Other shows have the floor open all day for the whole conference duration, assuring tired vendor reps and sparse attendance at any given time. Third of all, everyone seems quite engaged here and we're getting a lot of good questions from attendees. Fourth, San Diego is a great city. Perfect!

I'll be presenting on a panel Saturday morning along with our client Amplify FCU. They're on the leading edge of a number of hot emerging trends, not only with account opening but also with PFM (personal financial management) and mobile banking as well. You won't find a more progressive credit union.

Here's Ted and Brian manning our booth, partially missing and mangled from sheer overuse.