San Antonio-based Business Bank of Texas (BBT), a de novo with $19.2 million in assets that launched last year, presented a unique business plan to investors: a commercial bank that would leverage technology to keep its overhead in check. According to Ed Lette, BBT's president, CEO and chairman, this focus on technology also provides the bank's business-only customers with the services that they demand. "It's a win-win situation," he adds. "Investors and customers are both getting what they want."
As the key to its strategy, BBT selected Sioux Falls, S.D.-based Precision Computer Systems' (PCS) Vision end-to-end core banking platform, opting for an outsourced implementation, which fits nicely within the bank's commitment to keeping overhead as low as possible. According to Lette, while banking regulations permit 50 percent of capital to be in nonearning assets, BBT has just 5 percent of its capital in nonearning assets. "We don't own anything," Lette quips.
Lette explains that the bank looked at a handful of other vendors in mid-2006, including Fidelity National Information Services (Jacksonville, Fla.) and McCoy Myers & Associates (Amarillo, Texas). But the "key reason we chose PCS Vision is that it supports our high-tech focus," he says, pointing to the scalability and flexibility of Vision's infrastructure -- which is based on Progress Software's (Bedford, Mass.) OpenEdge standards-based platform and relational database -- as a major benefit.
Lette adds that BBT also was impressed with PCS' overall applications -- including the vendor's InSight teller system, Virtual Item Exchange imaging solution, Merchant Capture remote deposit capture (RDC) system and Online Banking platform. He notes that these technologies will be critical to keeping the bank's physical overhead in check.
According to Lette, the biggest challenge for the PCS implementation was the fact that BBT, which uses both mainframe and Microsoft (Redmond, Wash.) Windows platforms, was a start-up. "We had to say, 'We don't know what our final product will look like, so turn on all the switches,'" he relates. This required PCS to be more flexible, Lette says, and it took about a month to reach what he describes as "something that we could call 'bank accounting.'" BBT went live with PCS Vision in July 2007.
True to BBT's business plan, more than 95 percent of the bank's deposits are received via RDC, Lette reports. Business customers run checks through a tabletop MICR reader/scanner at their own locations, producing check images. Then CAR/LAR technology verifies the MICR data. The check images are submitted through a Web-based application and processed through PCS Vision.
"Our customers [serve as] our branches," Lette explains, adding that customers are provided with the RDC hardware free of charge. "We don't have a teller counter."
Noting that RDC allows the bank to service clients beyond San Antonio, Lette says, "We can evolve and not spend money on branches." Lette adds that about 90 percent of BBT's customers also use the institution's Internet banking product. "They're checking on their deposits," he explains.
Through its relationship with PCS, BBT has accomplished its goal of growing the bank organically without a large brick-and-mortar investment, Lette continues. "[We're proud of] being paperless and providing a high level of service for our customers," he says.
Case Study Snapshot
Institution: Business Bank of Texas (San Antonio).
Assets: $19.2 million.
Business Challenge: Provide cutting-edge commercial banking products and services while minimizing technology investments.
Solution: PCS' (Sioux Falls, S.D.) Vision core banking platform.