November 04, 2003

- THE 30-SOMETHING-CENT SOLUTION -

Through direct mail, even antiquarians without Internet access can benefit from the latest advances in imaging technology. In the first quarter of 2004, KeyCorp (Cleveland; $86.5 billion in assets) plans to send its retail customers monthly statements containing check images. "We're also aggressively working with our corporate clients around the same kind of concept," says Allyn Pytel, division manager, banking operations, KeyCorp.

That's just one side benefit of having prime-pass image capture at its four processing centers, using an image archive from Mobius (Rye, N.Y.). "We're populating our archive with 5 million check images daily," according to Pytel.

Even though customers will no longer have to watch the mail for check images printed off microfiche, the bank has been working to ensure that the direct-mail channel retains its punch.

"We have selective inserting for third-party marketing material to be inserted as part of the statement stream," says Pytel. "We also have a pretty resilient statement-messaging capability, all the way down to sub-product codes."

KeyCorp uses applications from Exstream Software (Lexington, Ky.) to manage its direct-mail campaigns within the constraints of its privacy policies.

Through Exstream Software's campaign management software, according to Pytel, KeyCorp will use "all those systems of do-not-solicit and do-not-share and make sure that we can target a message directly to a customer."

- SUPERIOR RETURNS THROUGH STATISTICS -

In the U.K., Lloyds TSB (London; British Sterling 253 billion in assets) has 30 million competitive advantages, also known as current account (or checking) customers.

Based upon the transaction history of its current account holders, the bank has developed a behavior-scoring system designed to predict the risk of lending to existing customers. The internal scores will supplant the traditional credit bureaus as the first line of defense against credit risk. The scoring system draws information from its SAS (Cary, N.C.) data warehouse, which the retail bank also uses to spot trends, price products and support risk management.

Before, customers would spend 10 to 20 minutes filling out a form, which someone would then have to key into a terminal. Only then would the credit scoring system provide a general "yes/no" answer.

"We would go through 25 to 30 minutes of the process of capturing information, and then we'd find that the decision was a reject," according to Shahram Sharifi, credit risk director at Lloyds TSB.

Now, it's a more productive conversation from the start, based on the information and demographic data the bank already has. Furthermore, the banker-whether at the branch, on the phone or via the Internet-starts most conversations knowing how much Lloyds would be willing to lend.

With its informational advantage, Lloyds TSB does not intend to concede on price to brash Internet start-ups.

"We can compete on the price, with the most competitive in the market, for the customers whom we believe add value," according to Sharifi.

- CONSTITUTION STATE AMENDMENTS -

Although Connecticut isn't an easy place to be a banker, it's a lucrative one. To stay abreast of the competition, Liberty Bank (Middletown, Conn., assets: $2.2 billion) went for the whole bundle from S1 Corp. (Atlanta), which included a CRM and a profitability system. These applications connect to the bank's Aurum (Plano, Texas) MISER core banking solution.

This setup will prevent customer mishaps and make certain they're resolved."Now, with the addition of having notes attached to the customer's profile, you can see very clearly that the customer called the call center, did not receive a debit card and ordered a new debit card," says Bob Hoppenstedt, head of the personal banking division at Liberty Bank. "So when Mrs. Smith walks into the office, it's 'Mrs. Smith, is everything OK? Did you receive your card OK?'"

- THE VISION THING -

In order to compete, mid-tier financial institutions have to ensure that they know their customers as well as, if not better than, anyone else. That's why Republic Bank adopted the Vision Solution from S1 Corp.

Once this system is implemented, bankers will be able to see the entire profile of the customer, says Rita Lowman, executive vice president of the consumer bank, branch network and operational services at Republic Bank (St. Petersburg, Fla.; $2.73 billion in assets).

"We have what we call 'Delivery Plus One' service, and that's a customer satisfaction and service aspect that the Vision project will help us achieve," Lowman says.

After deploying the solution to its platform employees, the project will proceed to the tellers, the call center, the VRU and the online banking channels. "Our ultimate goal over the next 18 months is to be able to integrate the entire enterprise solution," according to Lowman. "When we look at Vision, we're looking at what's going to be able to enhance us today and five years down the road."

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