January 07, 2003

When First Niagara Bank needed an all-purpose technology solution for delivering retail and commercial banking services via branches, telephone and the Internet, it turned to S1 and its Enterprise Solutions platform.

First Niagara began using S1's personal banking solution in July, and the commercial solution in October.

S1 provides a common platform for Buffalo, N.Y.-based First Niagara's retail, small business and corporate banking business, allowing real-time integration between online, phone center and in-person transactions at branches.

The enterprise platform also provides an open architecture to better integrate with proprietary and third-party application providers, such as CheckFree, which became First Niagara's bill-payment provider when the bank converted to S1.

Previously, the bank had employed separate platforms for retail and commercial banking, but decided to go to a single supplier, noted Frank Polino, senior vice president and chief information officer at $2.9 billion First Niagara.

The S1 deal builds on a longstanding relationship the bank has enjoyed with S1's SDI subsidiary, which provides branch automation and call center applications.

S1 provides services on an ASP basis, but offers the bank the option of bringing the technology in-house later on.

The S1 platform is geared toward small businesses. Features present in systems used by large corporations, such as identifying employees authorized to make company payments, are often missing from those sold to small businesses.

Over the past year, S1 has invested in technology to allow small business to perform these functions online, said Steve Ely, senior vice president of worldwide marketing at Atlanta-based S1.

S1's commercial banking solution is intended to strengthen commercial customers' online banking experience.

New features include online customer enrollment services for accounts, bill payment and other company-oriented self-service functions. A check services module allows commercial customers to manage the stop payments procedure with initiation, view and cancel stop features.

The S1 system also includes complementary functions such as check inquiry, issue file upload and positive pay.

In its first two months of using S1, First Niagara saved $14,000 in electronic fund transfer fees alone, Polino said. The bank also stands to save at least $100,000 in annual postage once it introduces electronic statements.

A common platform also simplifies the task of integrating First Niagara's systems with those of the banks it's acquired over the past two years.

"It makes us a more attractive acquirer that we have a common platform," said Polino.

Since 2000, First Niagara has acquired Albion Savings and Loan, Cortland Savings Bank, Cayuga Bank and Bank of the Finger Lakes (the latter deal is expected to close in January). Cortland and Cayuga converted to S1's platform in mid-November. The first three of those banks lacked Web banking, Polino said; Finger Lakes already offered online banking but not bill payment.