Setting the bar high in finance technology

August 23, 2010
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If you sign a loan document, purchase a certificate of deposit or open a checking account anywhere in the U.S., you may see the work of Dennis Adama’s Grand Rapids company, Compliance Systems Inc.

But you might never know it.

“We don’t sell direct,” said the lanky Adama, whose giant office windows overlook an endless stream of traffic on East Beltline Avenue SE.

“So how does this little small company in Grand Rapids, Michigan, have customers in all 50 states? Our software is designed to be components of other people’s software. So our business strategy from the beginning was to partner with those companies that deliver technology to the U.S. financial industry.

“We are a component of the overall system that is being delivered to individual banks or savings and loans.”

Compliance Systems works with the largest technology providers in financial business, Adama said. Consolidation over the past 15 years has seen Fiserv Inc. and FIS become the largest players in the business, followed by another CSI customer, Jack Henry & Associates, and several others the same size, Adama said. The industry accommodates another 10 to 15 smaller firms, he added.

“There’s probably not one of them out there that we don’t have some level of relationship with,” he said.

The company recently partnered with Integra Software Systems, a Tennessee loan origination software maker, to produce an application that can be used for loans across the board, from government-backed mortgages to commercial loans.

Adama said that users of CSI’s software, built for Microsoft’s .NET Framework, mostly fall into the community bank category, savings and loan, and credit union categories, with assets under $4 billion to $5 billion.

“We really can document transactions with any type of financial institution, whether it’s a savings bank, state charter banks, national charter banks, mortgage companies, mortgage brokers. If there is a transaction there that’s governed by state or federal regulations — generally, we’re there,” he said.

“The U.S. financial industry is the most highly regulated financial industry in the world,” Adama added, “They have to comply with a myriad of state and federal regulatory issues.”

This summer’s passage of new regulations for the financial system are sure to keep CSI busy, he added.

CSI has 40 employees, including lawyers, regulatory experts and software developers. The majority are based in Grand Rapids, but the company has offices in Southfield, and in Florida and Minnesota.

“What we do is such a unique niche, it’s very difficult to go out and hire somebody off the street that knows how to do what we do,” Adama said. “I think one of our successes is our ability to keep employees, grow employees. We’ve got a pretty good team here.”

It is the smallest of three U.S. companies who provide similar products for every state, Adama said.

“It doesn’t matter how big the organization is. People still do business with people they trust and they like,” he said.

“One of our competitive advantages — along with our technology — is our culture. What I tell our partners is we’re going to be the best partner you’ve ever had.”

When CSI started in 1993 as a spin-off of Great Lakes Business Forms, he said, the business was overwhelmingly based on paper with just a smidgen of software-related revenue.

“When we spun off and purchased this product grouping, it really was specifically to take it all electronic,” Adama said.

Today, the company is looking not just at today’s digital delivery systems, but at tomorrow’s.

“What we’ve done to help us grow is a philosophy that says if you’re not working today on where the market’s going to be three years from now, you’re probably going to lose,” Adama said.

“We’re always looking ahead and looking for the new opportunity. We have very good business partners, so part of the process is sitting down and talking with them and finding out where they want to be.”

Adama grew up in Newaygo as the eldest son of Richard Adama, a World War II U.S. Navy veteran who worked in the construction trades, and his wife, Doris, a school nurse. Adama has two sisters, and his late brother, Carl, was the mayor of Newaygo.

At Newaygo High School in the late 1960s, Adama was a member of the football, basketball and track teams. It was the high jump where Adama excelled, breaking Class C records at the state meet his junior and senior years. Named to The Detroit News All State Track Team, he competed in California as one of the nation’s top six high jumpers after graduating in 1970.

Adama was recruited to Indiana University. There he became a three-time Big Ten indoor and outdoor high-jump champion. He placed second and third in the NCAA indoor and outdoor meets in his senior year, and cleared seven feet or higher 20 times while a college athlete.

He qualified for the Olympic trials in 1972. In 1976, he qualified in high jump, and, in 1980, for decathlon. Then, with a master’s degree in physical education, he became Indiana University’s assistant track coach. Adama was inducted into the Muskegon Area Sports Hall of Fame and also into IU’s sports hall of fame.

“In the ’70s, I really wanted to focus on track and field. I was focused on competing,” he said. “In those 10 years of competing, I learned a lot about how to be successful, how to manage your time, how to set goals, how to set intermediate goals. And a lot of those principles, they’ve really helped me.

“Sometimes in business, it’s not giving up that counts. There’s been lots of times in the 17 years where there’s been tough times. You just hang in there. You step into the darkness with faith and you keep going.”

But after 10 years of competing, Adama — married and about to become a father — called the coach who had recruited him.

“I was on the phone with him and I said ‘It’s time for me to go out and get a real job.’ He said, ‘I’ll hire you.’”

Shortly afterward, Adama became a Banker Systems sales representative in northwest Ohio.

“For five years, I really learned the business,” Adama said. “I got up every day and called on every bank, savings and loan and credit union in northwest Ohio. So I really learned the business on the street.

“In the early 1980s, Banker Systems came out with the first personal computer that did loan origination. And I was very successful in selling it.”

Then his brother, Carl, was in a car accident at the age of 23 and became a quadriplegic. Adama decided to move back to Michigan and took a job at Great Lakes Business Forms, where he worked for eight years.

“It gave me the opportunity to learn how to develop software,” he said. “I really learned it through trial and error. I have a master’s in physical education. I’m not an attorney. I’m not a software developer. But I had to chance to learn an awful lot about the business. You work hard in life, and one thing leads to another.”

If ever Adama is hesitant about leaping with faith into the darkness, inspiration is not far away. In his office, he keeps a set of photos of his brother, each one revealing a different mood. Carl Adama, who had his own athletic success on the Newaygo High School basketball court, died 10 years ago.

“Any time I’m feeling sorry for myself, I can look at that,” Adama said.

“He fought back, learned AutoCAD and started designing homes, had his own business designing homes here in West Michigan. He’s an example of where you had a lot of adversity in life, but, man, he really had it, and he didn’t let it stop him. He was a good father, raised a daughter. He was on the board of directors of the church. He was mayor of the town. He ran a business. That’s a pretty full life.”

Eight years ago, Adama and his wife, Barb, took up golf.

“Through most of my life, I’d look at golf and say, ‘Golf, get a sport. Go sweat. Go do something.’

“It’s really a lot of what we do and the nice thing about it is that we do it together. And we do a fair amount of travel.”

For 19 years, the Adamas chose various islands for their vacation time.

“We’ve been through most of the places in the Caribbean … but we like different things,” including their place in Leland.

At Compliance Systems, Adama has set the bar at a height that he believes will bring success to the “little company in Grand Rapids.”

“The goal wasn’t to be the biggest at what we did. The goal was to be the innovator,” he said.

“I’m not really interested in having a company of hundreds of people. I’d rather have fewer employees that are well compensated and are very, very competent. I think we can compete more effectively that way.

“I can’t outspend our competitors — ain’t going to happen. But I can be better at building relationships, and I can make decisions quicker. I can be more responsive. And I can be smarter about how we do things. We’ve done well with that.”

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