Questions and Answers From the Top

A conversation with Magnus Jonsson

• By Security Products Staff
• Jan 24, 2007

BANKS and larger financial institutions are interested in making the most of the newest security technologies and analytical software solutions to better protect assets, employees and customers. There is a wealth of new and exciting products on the market today, but will these products solve the security challenges of the banking industry? We took a few minutes to visit with Pacom CEO Magnus Jonsson to answer this and several other questions.

There is a wealth of new and exciting products on the market today, but will these products solve the security challenges of the banking industry?

Q. Banks seem to have quickly migrated from simple alarm systems to more sophisticated integrated security solutions. What is driving this transition?

A. I think everything starts out as a cost savings exercise. IT professionals are always looking for ways to get the most out of their IP systems and to better use their investment in infrastructure and shared services. The migration from dial-up panels to IP not only reduces cost, but it also opens up an array of new and exciting features. Technology is an enabler, and security directors are just now beginning to realize how it can be leveraged to solve security and network challenges in the banking industry. Solutions for the financial industry is probably the most fashionable and misused sentence in the security marketplace. It seems that every manufacturer is trying to convince the market that it has specifically designed a black box to suit the exact requirements of that customer. When in reality, that same black box is presented as the ideal solution for government, residential, commercial (small and large), educational and transportation. This is what different industries need to be aware of and watch out for.

Q. What do you see as the No. 1 security challenge for banks?

A. I recently read banks lose more money in one month due to identity and account fraud than the companies spend annually on security systems. I don't know if that is true or not, but it does put the scope of the problem in some type of perspective. The challenge of immediately authenticating millions of customers in cyberspace, or in front of a crowded ATM is a growing concern for the banking industry.

Our job as a security product manufacturer is a bit more focused on creating advanced security solutions that protect people and assets in branches or remote locations all over the world. Technology gives us the means to remote manage alarm, access control and video surveillance functions from a centralized monitoring station. This creates cost savings for the bank and allows for better use of technology. The challenge of selecting the best security products and systems is not easy. Security directors have to not only be concerned with fixing today's problems, but they also must be willing to invest in products and solutions that can continue to expand and meet future growth demands.

Q. What are product manufacturing companies like Pacom Systems doing to meet the growing demand for more intelligent products and services?

A. Intelligence and analytics in security systems is a bit of a double-edged sword. The more complex we make our systems, the harder it will be to find integrators or in-house technical administrators who can install, maintain and operate the systems. It has become an industry-wide challenge and it's only going to get worse as more intelligent systems are introduced. Good technicians that are IT savvy can find more exciting career opportunities than installing a security system, so as we train these folks, we also lose them to better opportunities. However, as a security product manufacturer, Pacom must continue to introduce new ways to expand our open architecture for third-party development of business-critical applications. We also have a whole range of new tools and products on the horizon that will dramatically increase the possibility of optimal fit-and-forget installation.

Many manufacturers of security products develop systems for minimum requirements to reduce cost rather than building a platform for future expansion and increased capabilities. Pacom has a different approach in that we would rather build the product with as much future-proof design in mind as possible, even if it means a lower margin. Our experience allows us to assume customers eventually will want to, for example, upgrade firmware remotely to a dual-flash ROM, and they will need to be able to switch between two firmware versions remotely without the risk of compromised security at the site. Our systems are designed to accommodate that type of future applications.

Q. Since you took over as CEO of Pacom Systems in February 2006, what changes have you made to better address the growing market opportunity?

A. One thing is for certain, the security industry continues to change, and new product and solutions surface daily. Our mission is and has always been to create the best products and solutions in the market. Pacom Systems has a long and respected history in the financial marketplace. We have made this our main focus, along with the retail industry, because that is where our products and services add the greatest value. We also will continue to work closely with end users and system integrators to understand their challenges and make sure we are planning far enough ahead to offer real solutions to those challenges. Pacom also will continue to seek out and partner with best-of-breed technology manufacturers to ensure that our products deliver the communications, remote management and redundancy functions customers want.

Q. Since Pacom is a global company, do you see any differences in what banks from other parts of the world want in the way of security versus what U.S. banks want?

A. All bank security interests are fairly equal. Banks want security solutions that protect assets, people and customers. The technologies deployed may differ from location to location, but it shares the same goal. The maturity of technology deployment is a little more advanced in the United States and Scandinavia. However, other parts of the world are catching up fast because of global businesses connections.

Q. Share your perspective on the future of open systems versus closed or priority systems for the banking industry?

A. The fundamental issue is not just to demand open systems. The issue really is the entire industry needs to be working together to create the best solutions possible that can easily be integrated to handle the needs of any specific security challenge. End users and consultants want to work with companies that are forward thinking enough to ensure the products have some expected shelf life and can offer some level of connectivity with evolving technologies. It's astonishing how rare it is in the security industry that companies actually work to develop something new rather than just try to reinvent the wheel using the same protocols and procedures from the IT industry. I guess it is more important for the companies to say its products have the ability to communicate over TCP/IP rather than actually trying to comply with best practice and expertise in the IT space.