Union National Community Bank, Mount Joy, Pa., was at an impasse. Its core processing platform was hindering its speed to market, hence limiting its ability to compete.
"Our previous in-house processor was limiting our ability to offer a high level of products and services," said Michael Frey, executive vice president and chief operating officer at $300 million Union National Community Bank, a seven-branch institution serving Lancaster County, Pa .
"We were not structured to truly understand our customers' needs," Frey added. "As a bank, we were far from broken, but not necessarily in position to move ahead the way we wanted to."
Instead of investing in expensive technologies, UNCB instead began looking for a partner, one that "offered a full range of solutions, great technology resources, and would understand our business needs while keeping one eye on the future," said Frey.
UNCB chose Metavante, a Milwaukee-based outsourcing solutions provider.
Metavante developed a cost model that justified the technology expenditure and evaluated earnings opportunities for UNCB.
The analysis identified more than $1 million of potential revenue for UNCB through proposed process improvements.
In mid-2000, UNCB began its Quantum Leap 2000 initiative. It transitioned from its outdated core processing system to Metavante's Windows-based client/server platform, which supports deposits, loan and financial control processing; 1099/1098 processing; and interfaces to other vendor solutions, credit services, and wealth management applications like corporate and personal trust accounts, invest/CFA and personal cash management accounts.
By November 2000, all modules had gone live, including BankerInsight, a sales and service solution that provides an extensive customer view for more personalized sales and service interaction; PCTeller, a DOS-based teller system that provides immediate access to current account information; and a centralized data warehouse providing access to business data for operational and management reporting.
The core of the system is the data warehouse. All transactions are fed into the repository, and later extracted for various reports, tracking vehicles and monthly updates.
The data warehouse is also the foundation for UNCB's new customer relationship management strategy-to identify the most profitable customers, and accurately pinpoint the most valuable products and speed them to market.
"Before, we used a shotgun approach to push products to our customers," Frey said. "Now, we run reports to analyze and understand our customers' needs, and can target specific products and services that both meet their needs and help us make intelligent sales."
"We understand that CRM is not a panacea for happy customers," Frey added. "However it will help us deliver appropriate products and services to the right customers through the appropriate delivery channels."
CRM is proving more cost effective than simply acquiring new customers.
"Even our less profitable customers will benefit from CRM as we do not want to push them out our doors; they are still our customers," Frey said.
Later this year, UNCB will upgrade its CRM system to include a marketing customer information file, an approach to learning relative profitability at a household level.
The previous CRM application mined the services and expenditures of a specific customer base and spreads costs over that sample. The new application drills down into individual households to get a view of spending and account activity.
"It will increase our organization's intelligence to make better targeting efforts," Frey explained. "It is a more proactive response to their needs, as opposed to the reactive approach we were using."
Since installing Metavante's core processing system and CRM strategy, UNCB has not only improved its outdated and limited technology, but also built a foundation to support a much needed customer relationship management strategy.
"We want to be viewed as a financial solutions community bank," Frey said.
"We now offer a high level of personalized service and are positioned to make money in the future."
The bank is well on its way to achieving the $1 million in promised new revenues, and expects a return on its investment within 12 to 18 months.
Further, more efficient operations supported by the processing system have increased UNCB's yearly non-interest income by 50 percent over last year.
An online banking service, complete with bill payment, will be operational within a few months.
INSTITUTION: Union National Community Bank
ASSETS: $300 million.
BUSINESS CHALLENGE: Offer new products and services and better understand customer needs.
KEY QUOTE: "We now offer a high level of personalized service and are positioned to make money in the future." - Michael Frey, executive vp and COO