In only 10 months, Bethlehem, Pa.-based Team Capital Bank (TCB) completed a dramatic technology conversion under the direction of Ghan Desai, the bank's EVP and CIO/CTO. Desai and his four-person IT team not only replaced the bank's core banking platform, but also its automated clearing house (ACH), wire, electronic funds transfer, merchant capture, data warehousing and reporting systems, as well as its business and consumer online banking systems, branch systems, public website, and mail and print operations.
The new systems went live successfully on Feb. 22, 2011, with no service interruptions and minimal issues for customers. "We received very positive feedback from our customers overall," reports Desai, who hired Raddon Financial Group (Lombard, Ill.) to conduct a post-implementation customer survey. "Some customers didn't even know we did a conversion."
The decision to pursue the technology overhaul came in the summer of 2009, says Desai, when he realized that the bank-in-a-box solution that TCB ($773 million in assets) had been using since its inception in 2005 couldn't keep up with the bank's rapid growth and didn't allow his team to control features. "Instead of a one-size-fits-all approach, we decided to go with best-of-breed technology options to grow our business and enhance our products and services without depending on one solution provider," he explains.
TCB now runs on Open Solutions' (Glastonbury, Conn.) DNA core platform, which runs on an Oracle (Redwood Shores, Calif.) database. The platform, according to Desai, has allowed the bank to incorporate open source technologies as well as in-house-created applications, including an ACH manager, a wire manager and an online banking manager. "You don't necessarily always need to spend money to get good technology these days," Desai insists. "We've built 15 applications since we went live with Open Solutions, and every one of those applications runs on open source. We did not spend anything other than the development time we put into it."
A self-proclaimed developer at heart, Desai says he spends a significant amount of time building applications for the bank, which is in line with his leadership approach. "I have a very hands-on role in helping TCB tightly integrate its customers, employees, systems and processes to position the bank to grow shareholder value in the next three to five years," he explains.
"We take a very unified view, not a siloed view, of the organization itself," Desai continues. "My team is involved with everything -- from branch operations, to deposit operations, to loan operations, to HR and, of course, IT and back-office operations, to working with all of the vendors that we've partnered with. It's a very holistic way of doing things. Every time we take on a project we look at it from end to end, and we get all stakeholders involved."
This approach -- along with a solid project plan and strong execution -- helped make the technology conversion a success, according to Desai. "The overall project I would describe as very transparent, so when something didn't go the way it was supposed to, we immediately sorted it out and mitigated whatever the issues were very quickly," he says.
That process included an exhaustive cost model, which consisted of breaking down all of the bank's operational costs into granular detail and assessing the overall total cost of ownership for each technology solution based on growth projections for the next six years, Desai explains. "It was very revealing," he says. "Some of the vendors made it very attractive in years one and two, and it seemed like a no-brainer to sign on the dotted line. But then in years four, five and six, as our bank grew and our number of accounts and transactions grew, we would end up paying an arm and a leg."
With the completion of the technology conversion, Desai relates, he and his team now are tackling a number of ongoing challenges, including keeping up with customers' increasing level of technology savvy. "Our customers, in many respects, are smarter than us in the sense that they have smartphones, iPhones and iPads, and they're looking at different apps," he says. "They're very technology savvy, so we have to make sure that our employees -- especially the customer-facing employees -- are just as savvy."
Desai has implemented an internal education campaign to make sure that TCB's customer-facing employees are knowledgeable about services and products and are able to talk with tech-savvy customers about tools and technologies. He stresses that staying current and hands-on with technology is a critical part of being a CIO or CTO. "You should become a student, teacher, customer, evangelist -- all those things. You really have to embrace technology and understand it," Desai says. "I have an iPad, a BlackBerry and I'm getting an iPhone. I tend to stay on top of those types of tools. I also keep an eye on my children -- Gen X and the Millennials -- what apps they're using and how they're banking. I look at what they're doing as consumers."
Despite his tech savvy, however, Desai is taking a cautious approach to certain technologies. "For the time being, we're really not participating in social media campaigns or in mobile banking. What our customers have told us in our recent survey is that they're not demanding that particular technology," he says. "We're watching which technologies are working and which ones the customers are actually using. We need some evidence that it's going to generate some results for us."
Another major challenge that TCB faces, according to Desai, is the same one that most banks face: security. "Every single online technology we've deployed, we've deployed it with multifactor authentication, which results in significant reduction and prevention of fraud and theft," he reports. Additionally, Desai deployed internal role-based access controls to give employees access only to the information and systems that they need to perform their jobs.
"It's a challenge, but it's one that we have to face," Desai says of combatting fraud and other security threats. "Otherwise we'd be compromising our risk assessment and compliance programs."
From Investment Center to Profit Center
Overall, Desai says, one of his top goals is to transform TCB's IT and operations from "an investment center into a profit center." And he's well on his way to achieving that goal with the help of Open Solutions' DNA Creator, which allows financial institutions to market and sell through an app store applications that they have created to banks that aren't in direct competition.
TCB is looking to start marketing some of its apps within the next three to six months, according to Desai. "We're looking to start with our ACH manager, which has cleared compliance hurdles internally -- we hired an auditor to look at that," he says.
The implementation of the new automated ACH workflow is part of Desai's continued effort to streamline operational workflow. "We're looking to add automated processes and more tightly integrate systems," he explains. "We think we can really leverage technology to scale the infrastructure of the bank without adding unnecessary human resources."
Desai also has put in place "light touch" processes in areas such as wire transfers, for which somebody in operations still needs to monitor the transactions. "We've automated the transmission part of it so we don't have to have human processes to download these wires," he says.
So far, Desai indicates, he is pleased with the outcomes of his team's efforts. "We've positioned ourselves pretty well right now to stabilize our operational costs and increase the more self-service products that our customers are demanding from us," he says. "We've created a scalable, resilient infrastructure that will allow us to support the bank as it grows."