Banking On Technology

For VARs developing solutions for companies in the banking and finance industry, that has a double meaning: According to VARBusiness' 2002 State of the Market research, 25 percent of solution providers say the banking and finance vertical market is going to account for at least 10 percent of their revenue this year. More than 20 percent of solution providers also count banking and finance among the top three vertical markets that present the greatest market opportunity for them in the next three years.

As financial-services organizations continue to expand, whether through mergers and acquisitions or sheer growth, they're finding their legacy IT systems no longer suit their needs. Their technology has either become too complex to manage or it has become outdated. Systems from two companies that have combined might need to be consolidated into one manageable environment. Whatever the scenario, opportunities exist for solution providers.

What kinds of solutions are these customers pursuing to create greater efficiencies? Following are four technology areas that could help you break the bank.

Voice-Over-IP: A First For FirstBank

Faced with increasing phone bills and costs to maintain an older system, FirstBank, a privately held chain of banks based in St. Louis, was ready to make an investment that would save it money. With nearly 140 commercial and consumer branch banks throughout California, Illinois, Missouri and Texas, FirstBank sought the expertise of a local solution provider to replace its Lucent Partner key system with a Voice-over-IP (VoIP) system.

Metropark Communications, also based in St. Louis, is helping FirstBank deploy 3Com's NBX 100 Communications System throughout its branches. The first system was installed in November 2000. Deployment throughout all of FirstBank's branches will continue during the next five years, says Paul Zack, network analyst at FirstBank.

"Large companies like FirstBank are not typically adopters of first tech, and we traditionally sell cutting-edge technology to early adopters," explains Glenn Conley, president of Metropark, which will also be available for any necessary troubleshooting. "We sold them on voice over Ethernet."

To date, 15 of FirstBank's offices have been wired with VoIP systems, which cost approximately $9,500 a piece. The financial institution is in the process of switching all its data communication to VoIP over its wide area network. That is expected to reduce long-distance costs by 30 percent, Zack says.

The system can also be maintained remotely because that function can be handled via a standard Web browser.

"Ease of maintenance is the ROI," Zack says. "It reduces the time the technicians have to run around for voicemail upgrades or resets, or a change of numbers. At the rate we're growing, we're not reducing the number of techs, but the amount of time they spend on projects will be reduced so the same number of field techs won't be spread out too thin."

SAN Solution Eases Server Management

With a growing number of applications, Lowell, Mass.-based Enterprise Bank and Trust, a subsidiary of Enterprise Bancorp, was having difficulty managing all of its servers. But despite its small size,with 10 branches throughout Massachusetts and $675 million in assets,Enterprise Bank and Trust turned to a grand solution: a storage-area network.

The bank runs its core banking applications and stores records, such as loans and customer deposits, on a Unisys mainframe. With help from Computer Resolution, a VAR and systems integrator in Bridgeport, Conn., the bank purchased a Clariion FC4500 midrange storage disk array from EMC. Computer Resolution then integrated that into the new environment.

"In essence, we won't outgrow it," says Steve Irish, executive vice president at Enterprise Bank and Trust. "We're not a Citibank or a Fleet, but we're the first in our area to have this."

For now, two Compaq servers will use the SAN system. By the end of the year, an additional three to five Compaq servers are expected to be on the system to meet storage capacity needs. Several Hewlett-Packard desktops were also purchased as part of the deal.

"As more and more application servers are being deployed, rather than managing them individually, we can manage them on the EMC storage area network system," Irish says.

Enterprise Bank and Trust can now consolidate all of its storage into one platform, says Kathleen Agid, director of sales at Computer Resolutions. The new system, which costs roughly $250,000, makes servers easier to manage.

Of course, problems could still crop up, but Irish feels comfortable with EMC and its solution. "Because it's EMC and it's a company right here in Massachusetts, we have confidence in their engineering abilities," he says.

Bank Strikes Gold With CRM

Merchant First Bankcard, (now known as Landmark Merchant Solutions), based in Schaumburg, Ill., provides electronic merchant bank-card processing to nearly 5,000 small businesses, both e-commerce sites and brick-and-mortars. Merchant First Bankcard, founded in 2000, had been using a proprietary system developed by its CIO to manage its sales and support-call-center functions. But in time, it became apparent it needed a more reliable and customizable system to help it streamline operations through the automation of tasks and to reduce downtime they had been experiencing.

Merchant First Bankcard turned to FrontRange's GoldMine FrontOffice CRM tool, then it hired JDS Group, a FrontRange solutions partner, to assist in the development of a new way to track current and potential bank customers. That was done with a component of FrontOffice called GoldMine Sales and Marketing.

"We do a lot of telemarketing with B2B sales and contacted more than 1 million merchants in 2001," says Merchant First Bankcard CIO Allan Lindsay. "We do that in our SQL server database."

GoldMine's product is primarily used as a sales and marketing tool to enable sales executives to generate sales from the wealth of information they already have on their existing databases, says Dean DeLisle, vice president of sales and marketing for Chicago-based JDS Group.

"Let's say you talk to a potential customer today. That person may not, for whatever reason, get back to you right away," DeLisle says, "but in two months you can pick up the business from where you left off because you have all the necessary information in front of you."

Lindsay says he was impressed with the level of customization he was able to achieve with the FrontRange products,and with a minimal amount of training. "I knew JDS Group had the experience with FrontRange's products, but I was able to take the product out of the box, install it myself and understand how it interfaces with our SQL server," he says. "[JDS was there should I need help."

With the addition of network and telephony servers, the entire system cost Merchant First Bankcard approximately $250,000, Lindsay says.

"The ROI has been excellent," he adds. "I'm running it [with another network admin, supporting 80 users. The two of us work on help desk, troubleshooting and development issues."

Alpine Bank Checks Out Digital-Check Imaging

There came a point when mailing cleared checks back to customers no longer made fiscal sense. At a rate of about $2 per package,multiplied by 100,000 customers per month,Alpine Bank of Colorado, Rifle, Colo., believed that integrating digital-check imaging within its IT system would help retain its customers by providing better and faster service while saving the bank money. With digital-check imaging, the bank posts deposited checks online and mails copies of imaged checks on a single statement.

"Digital-check imaging has been the best bang for my buck," says Kevin O'Brien, AS/400 systems administrator for Alpine Bank, which has 28 branches throughout Colorado with $800 million in assets. "It's been a tremendous savings in the handling of paper and research time for the bank employees, as well as meeting customers' needs better. It's a whole lot faster for customers to look up their checks on the Internet than to store the documents in files."

Alpine Bank had been using a Microfilm system as of 1999 before turning to Monett, Mo.-based Jack Henry and Associates, a solution provider and developer of software for the banking industry, for its ImageMax digital-check imaging system. Jack Henry integrated ImageMax with its existing Silverlake system, which helps manage overall operations. Now, postage on imaged statements requires only one stamp, with most envelopes weighing between 1 and 2 ounces.

The ImageMax software cost $300,000. For storage, Jack Henry purchased two IBM 3995 optical libraries for Alpine at $100,000 apiece. But it's been worth the large up-front expense. O'Brien says the bank has realized an ROI of a half-million dollars since deploying the new system.

In addition, Alpine Bank can add more customers without having to increase its staff. The solution also cuts down the need for finding physical storage space for checks.

"Customers don't even have to call the bank for their checks," O'Brien says. "They can do their taxes at midnight and find that check they wrote to the heart association."

O'Brien firmly believes digital-check imaging is a trend that's catching on throughout the financial community. "This gives us a competitive edge against other banks," he says. n