Microsoft Corp. systems are installed everywhere in the financial world, but it wasn’t always so. Not until about three years ago, with its Windows 2000 operating system, did the 28-year-old software company convince the industry that its larger-scale deployments would be mission-critical and not crash under stress. “Now we’re mission-critical from the data center to the desktop and even to devices as small as smart cards,” asserts William Hartnett, Microsoft’s general manager for commercial industries.
Yet no major financial institution has bought everything Microsoft offers. Most are still juggling complex amalgams of old systems and new, mainframe and distributed, batch and online, from Microsoft and many other suppliers.
Then there’s Lydian Trust Co. A small private bank in Palm Beach Gardens, Florida, Lydian had the luxury of choosing a single platform when it was chartered in 1999. Originally called VirtualBank, it was one of the first companies to adopt Windows 2000. Today it embraces Microsoft’s .Net Web ser-vices framework and is a minishowcase of the full package that the Redmond, Washington, software colossus is trying to sell to the biggest Wall Street firms.
“We started out very differently from other banks -- as an online-only bank on a Microsoft infrastructure,” notes John Studdard, senior vice president and chief technology officer of Lydian, which manages or advises on $3.5 billion of client money and boosted net income last year 165 percent, to $5.3 million. “We were close to the top of the Internet bubble and wanted to diversify quickly,” he adds. “The technology allowed us to do that.”
Lydian now has three business lines: banking (online, private and mortgage); wealth management consulting and advising, for accounts with balances exceeding $10 million; and a data services operation that is out of character for a pint-size firm.
“We control our destiny by keeping everything in-house,” explains Studdard. On top of that, the 30-employee tech department -- about 10 percent of Lydian’s workforce -- has built outsourcing systems to serve other firms’ mortgage-processing and wealth management needs. Says Studdard, “We don’t see a lot of choice out there.”
