Like a big-wave surfer getting stoked for a gnarly groundswell, Tom Burge has been preparing the IT shop at Union Planters (Memphis, $31.9 billion in assets) for its impending merger with Regions Financial (Birmingham, Ala., $48.6 billion in assets). Although Burge will not be CIO of the combined organization, which will take the Regions Financial name, he will oversee the bank's day-one operations in a push to prepare for the new competitive environment enabled by Check 21. Burge spoke with Bank Systems & Technology's Ivan Schneider to offer a progress report.
BS&T: What's the status of Union Planters' UP Excel project, a company-wide initiative to cut costs and generate new revenue streams from operations?
Burge: Over the last two-and-a-half years, that has been the bank's major focus - going through and rationalizing everything that we have done from an operational standpoint and making sure that we've deployed best practices. It's paid off by driving a little over $100 million to the bottom line. That's one of the things that makes us attractive, the fact that when you look at what we've done from an efficiency ratio, there would seem to be an opportunity to take a lot of the things that we've done and apply it to the new Regions.
BS&T: What's your status on Check 21?
Burge: We've got to decide, first of all, which vendor we're going to use to facilitate the actual exchange of images, and who our partners are going to be early on. I've had a lot of ongoing conversations with SVPCo [Small Value Payments Company, New York], because they really represent potentially the largest group of major banks to be able to exchange at a single point. But in addition to that, we've had conversations with Fiserv [Brookfield, Wis.] and even some of our local banks from the standpoint of getting into some pilots early on for image exchange.
BS&T: Will your bank's newly increased scale impact these decisions?
Burge: We already had sufficient volume to justify us trying to be a major player in image exchange, fairly early on. The scale here just makes it more of an opportunity for us to be a significant player. When you put us together, it puts us in the top 15.
BS&T: What's the branch opportunity?
Burge: The great thing about putting these two companies together is [that] there's not that much overlap - less than 75 branches. So it will provide our customers with a much more robust branch network.
There are regulatory issues coming up next year related to ATMs being able to support Triple-DES [encryption]. From that standpoint, both of us are looking at substantially upgrading our ATM networks, and we'll be undertaking those initiatives here over the next 12 to 18 months.
More than likely we'll end up deploying their teller platform system into our branches, which is a more robust sales platform than what we have in place today.