ANE Technology Services shifts focus to bank security
In some cases, it doesn’t take a hacker to breach a bank’s computer security system to access customers’ sensitive information. Just as much damage can be done by a knowledgeable caller simply asking the right questions of an overly helpful employee, says Joel Walker, president and CEO of ANE Technology Services.
Walker should know. He’s been the caller on the line, successfully pumping employees for information. His next call is to the bank’s president, to point out the institution’s security weaknesses.
“It plays on human nature that you want to help me,” said Walker, whose Johnston-based technology services and consulting company addresses security training issues as well as providing expertise on the latest systems.
“We may call and say, ‘We’re the bankers’ association; we’re calling to update our databases. Can you give me the name of your core processing system and also your loan processing software?’ The following day, we may call in and represent ourselves as a member of that organization and say, ‘We’re going to do some upgrades; we need your user name and password.’ And we get them.”
ANE, which in the past 18 months has broadened its market reach from Greater Des Moines into eight Midwestern states, has based its growth on helping banks protect their customers’ data. Following its merger in 2003 with Cedar Falls-based Prime Logic Technical Partners, ANE has doubled its client list to more than 200 community banks throughout the Midwest.
“We’ve turned our whole focus to information security and compliance in the banking industry,” said Walker, who said that niche initially represented about 20 percent of his company’s work. “Now, in banking, that’s all we do.” In Greater Des Moines, however, ANE continues to serve non-banking clients and provide a broad array of information technology services.
Technology-based intrusion threats and data thefts that have affected large companies such as LexisNexis and ChoicePoint Inc. have increased fivefold in the past five years. One of the key reasons, Walker said, is that it no longer takes highly skilled people to penetrate networks.
“Just as you can go to the Internet and download information on how to build a bomb, and we think that’s ludicrous, you can also go to the Internet and download how to hack into people’s networks,” he said. “And not only can you find out how to do it, but you can get automated tools that take the sophistication requirements out, and more and more people are able to do this type of thing because of that.”
One aspect of security ANE has begun addressing for banks is providing technology that detects the types of hacker attacks that firewalls are unable to stop, he said.
“We’re working with a lot of banks to get that type of equipment in. It’s a layer of security that many banks don’t have today.”
Another service the company provides is secure Web hosting and Web site development to meet banks’ specialized needs for infrastructure that ensures the security of online banking transactions.
Penetrating out-of-state markets has been much slower than Walker and his business partner, Tom Agnitsch, anticipated a year and a half ago. The company has been through several rounds of venture capital funding, including a $100,000 loan and a $50,000 grant from the state and $50,000 in venture capital through the Wellmark Venture Fund.
ANE’s original plan had been to expand into 12 states outside Iowa by now, and the company has failed to see the rapid ramp-up in employment it anticipated. ANE currently employs 28 people between its its offices in Johnston and Cedar Falls, with one- and two-person sales offices in each state it services. It had expected to employ up to 60 people by this time.
“One of the things we found was that Missouri bankers want to talk to other Missouri bankers for references, for example,” Walker said. “We used special reference pricing models that say, ‘If we install our services and do a good job for you, we will give you a discounted rate, but we’re going to want the ability to use you as a reference in the Missouri market.’”
In addition to establishing between 12 and 20 such reference relationships in each state, ANE also established ties with each state’s bankers association.
“As (bankers) began to understand that we had this special expertise, the good news began to spread,” Walker said. “It’s highly relational; bankers want to talk to other bankers. They don’t want to call an insurance company to see how well you did for them. They want to talk to another banker, preferably the same size as them, and in the same state.”
ANE’s clients typically range from $80 million to $400 million in assets, though that’s trending up to include banks as large as $2 billion in size.
“I think one of the biggest things that’s helped us to grow is that as the executive staffs at banks begin to become educated on the risks, they’re starting to take proactive action,” Walker said. “I think that’s one of our biggest areas of growth, because of that.”