More than ever, the banking industry is faced with a growing array of regulatory compliance issues, an occurrence that almost inevitably raises information technology questions on regular basis. While for bankers, compliance and technology issues are obstacles to be overcome, for at least one local spin-off start-up firm, they are the essence of opportunity.

StrategIT, a Massachusetts firm specializing in technology consulting for financial services companies, will open its doors this week. Owners Robert Norton and Dana Zahka said their new company would provide banks and financial institutions with the expertise needed to “do more with less” through technology and “increase their returns on infrastructure investments.”

“Our clients need to do more with less – they are financially strapped,” said Norton, founder, executive vice president and chief operating officer of StrategIT. “Agency audits for banks can create a lot of stress on a small [information technology] department. We have the experience and the sensitivity to the uniqueness of their problems.”

Norton said technology today is “transformational,” meaning it is constantly changing at such a rate that businesses struggle to keep pace.

“Clients need to separate reality from dreams and more importantly, look at their return on investments and how it applies to the lines of business, especially business contingencies,” said Norton. “Transformation technology is sweeping the financial services industry … Technology is a moveable target,” he said, adding that businesses are forced to adapt to changes regardless of their financial situation or employee expertise.

“Trying to explain technology five years from now is like trying to explain fire to a fish – it doesn’t exist in the environment right now,” Norton said.

Many banks have invested in the future through technology by implementing online services and Web banking, but Norton said StrategIT would help banks prepare for any technological changes that may occur.

“Technology is constantly changing and it’s impossible to have a staff that is confident in every area all the time, so we offer an extension to these organizations with a focus on IT infrastructure – the heartbeat of the entire system,” said Zahka, founder, president and chief investment officer of StrategIT.

“With the economy the way it is, we have to fight with competition and we have to keep up on technology,” said Henry Greener, vice president and network architect at Eastern Bank in Lynn. “[Banks] need to make sure we can leverage technology to meet [government] standards, and we have to do that with less resources and less budget while complying with regulations like [the] Gramm-Leach-Bliley [Act].”

Requirements of regulations such as the USA Patriot Act must now be considered as banks assess and implement contingency planning, and Norton said banks should prepare themselves to spend time and money on infrastructure updates.

While some banks are overwhelmed by the process, and the budget, “We help our customers understand because of our experience. If we can supply the right tools for our clients then our success is ensured,” said Norton. “Corporate compliance has to do with data integrity. It is not an option.”

StrategIT is the sister company of Select – a 15-year provider of technology infrastructure solutions – and works to provide strategic guidance on infrastructure needs and help drive down costs while increasing the return on investments. Select is run by the same principals who have begun StrategIT, which will operate from the same office in Westwood.

“We need to constantly have our finger on the pulse of the industry,” said Zahka, who said StrategIT was created to help financial services firms stay current with new technology enhancements.

“It’s impossible to keep everyone at the bank up to date on new technology – we don’t come in and advise clients of what they should do, we take ownership and we take them to the next step,” said Zahka.

StrategIT’s strategy is to use the same technology but on a varying scale for different clients – the same methodology is used with a national corporation as it is with “mom and pop” businesses, according to Norton.

Eastern Bank, a Select client for over 10 years and now a StrategIT client, recently worked with the consulting team that is now forming a separate company. Greener said Select provided the bank with software and planning advice when Eastern consolidated five different bank operations centers into one building last year.

By preparing a wireless system in a “secure and efficient manner,” Greener said Eastern was able to maintain office capabilities with the help of the technology consultants while spending a one-time cost of approximately $10,000.

“Take a look at the risk – we were trying to move folks into a facility and that could have hindered the customer relationship. The reputation risk is so high, and we needed to remain competitive, and [the consultants now forming] StrategIT helped us to do that,” said Greener.

“When [banks] are forced to use public networks to move data around, they need to be secure. But what methodologies that they use … That is the product that we supply and we do it cost-effectively,” said Norton.

Attack and Defense

Greener said banks will have to adapt to e-commerce updates and security measures in the future also said that banks should be prepared to handle changing infrastructure needs and know what they need to remain competitive in the marketplace.

“It’s difficult to try and support and adapt to changes in the environment. [Eastern] can’t support a CISCO or Nortel [program] from a hardware standpoint,” said Greener. “We need to grow outward to reach our customers but grow inward to support them – StrategIT allows bankers to ask these types of questions.”

Kamil Alachi, vice president of StrategIT, said banks are looking for three things when it comes to technology – new technology to enhance customer service, security products and solutions to provide a good return on investment.

Alachi said banks are trying to go above and beyond current Federal Deposit Insurance Corp. recommendations and guidelines to provide customers with a greater service, but the challenge “is not only to deploy, but to align the technology with business initiatives.”

Complete functionality, a stable operating system and the appropriate technological requirements are established for a business before “we draft out the road map” for a client, according to Alachi.

At banks, information security has become a paramount issue, and Alachi said most of the concern is with protecting the consumer, especially on bank Web sites.

With remote worksites available today, Alachi said cyber-terrorism is a threat with which businesses must contend, and banks are updating their Internet security systems to make sure customers are not vulnerable to cyber-terrorism attacks.

According to Alachi, banks are constantly on a high level of alert with respect to the security of their systems and StrategIT hopes to work with many New England banks to study the business continuity and disaster recovery plans that are currently in place.

In the case of cyber-terrorism, Alachi said his team at StrategIT “plays the bad guy and we try to attack our customers so that we [find and correct weaknesses to] make sure they are no longer vulnerable.”

Upon completion of such a test, the StrategIT consultants conduct an assessment and institute planning and design phases.

Zahka said 80 percent of StrategIT’s business is expected to come from firms involved in the financial services industry, while other clients will likely be in the pharmaceutical and insurance fields.

Select clients already committed to working with StrategIT include Eastern Bank, State Street Bank, Fidelity Investments, Iron Mountain, MassMutual and John Hancock Financial.