The third life and inexhaustibility of banking software forerunner Baker Hill
Nearly 35 years ago, Baker Hill introduced software to solve persistent challenges in banking. The company’s solutions, over the decades, have been so disruptive and gained such affinity among bankers that the “Baker Hill” brand name has become synonymous or interchangeable with “banking software” in common parlance.
“It’s like Kleenex or Coke. I mean, there’s certain functionality within banking software that people just naturally refer to as ‘Baker Hill’ whether it’s actually Baker Hill software or not,” said John Deignan, president and CEO of Baker Hill. “That’s how powerful an impact Mark and Karen [Hill] and the team in the 80s and 90s had automating manual activity in banks. The level of brand recognition and the depth of loyalty built up among credit analysts, lenders, risk managers — all types of bankers — is a tremendously valuable foundation upon which we’re building the future.”
For scope, more than 20,000 bankers currently use Baker Hill products to manage $1.3 trillion in commercial lending and $153 billion in small business loans. The company runs over 15.6 million rules daily to monitor the financial strength of its clients’ commercial lending portfolios, and maintains the CRM and tracks all associated products for more than 37 million commercial lending customers.
The race to the future Deignan spoke of began for Baker Hill in 2015, when the software world shifted and cloud computing became the standard for most industries. Highly regulated industries like banking, energy and healthcare have lagged behind due to safety and security concerns, but those concerns have largely been addressed with new tech defenses. Private equity firm The Riverside Company recognized the opportunity and plucked Baker Hill from its 10-year residence within information services company Experian.
Now, with heavy private equity investment in new talent and technology — combined with significant veteran Baker Hill personnel (some employees have been with the company for 15, 20 years or more) — the company has moved into stylish new headquarters in Carmel, Ind., and launched its cloud-based Baker Hill NextGen® solution for lending, risk management, analytics and marketing. And that’s just the past few months.
Before any of the aforementioned advancements could happen, Baker Hill had to stand up an entirely new company infrastructure; forming administration and human resources, accounting and finance, sales and marketing departments and more — everything necessary to run a company that’s redundant within a larger corporation. Under the direction of CTO and COO Niles Bay, the company simultaneously migrated its entire client base from servers to the cloud within six months’ time in partnership with Microsoft® Azure. Company officials recount that Microsoft was incredulous about success in that timeframe, which is why they now promote the Baker Hill partnership through a case study.
“In a very entrepreneurial way and probably a bit of a defiant one too, we’ve gone back to our roots and shown the banking world that there’s a better way to do things and we’ve asked them to be a part of the next wave of disruption with us,” Deignan said. “We’ve taken all of our legacy products and rebuilt them into Baker Hill NextGen®, a singular platform that, coupled with renowned professional services, more directly meet the needs of the market today.”
Deignan explained that Baker Hill’s entire culture has shifted from more of a caretaker and maintenance culture as a division of another huge company, to one focused on technology and innovation again as a PE-backed, independent disruptor and challenger. In addition to creating a small time-zone development operation in India and merging with an Oregon-based analytics software company, Baker Hill has hired at a frenetic pace, growing its full-time employees by 85 percent. The company currently employs more than 200 people.
The competitive landscape for banking software is fairly crowded, but Baker Hill enjoys a healthy share — 20 percent of the top 150 U.S. banks and 20 percent of the top 25 credit unions, according to company marketing materials.
“There are other PE-owned and venture-backed companies out there that make some sophisticated software and keep us on our toes,” Deignan said. “The differentiator for Baker Hill is that we’re leading the industry where our customers and all consumers want to go. We’re helping them to eliminate the myriad of point solutions by offering a powerful comprehensive solution that’s just as elegant and easy-to-use, and letting them decide how they want to use it to improve and streamline their business.”