Umpqua Bank acquired three banks in the past five months. But those IT integrations already are a faded memory for CIO Colin Eccles, who has developed a repeatable process for IT mergers that he says enables the Roseburg, Ore.-based institution to complete them in no more than 120 days.
"We're very good at merger integration - this is a bank that's grown by acquisition since it started," Eccles says. "When we acquire a bank, we go in very quickly. We're very aggressive about completing the acquisition and the full conversion, bringing the accounts and customers across."
A recent merger with Evergreen Bank in Seattle was completed in 90 days, Eccles reports. Another, with Ranier Pacific, took 120 days. "We go in on closing weekend and quickly take control of the acquired bank," explains Eccles, who says he integrates the acquired bank's IT staff into his team and drops Umpqua technology into the acquired bank branches within 10 days. "We start bringing our products, services and branding into the bank so that on Monday it opens up as Umpqua Bank," he adds.
This fast turnaround provides several advantages. First, Umpqua ($11 billion in assets) can immediately open new accounts for customers in the acquired branches on its own platform. In addition, any existing Umpqua customer can walk into an acquired branch and be served seamlessly. Another benefit is that the branch associates learn to use Umpqua's technology immediately.
Eccles says he will consider the merits of a piece of technology an acquired bank is using if it appears to be superior to Umpqua's. "I would definitely want to look at it and see if we should integrate it into our platform," he says. "But then I'd want to retire ours immediately. We believe in the discipline of not building bridges and winding up with two of everything."
Or, as is the case with some very large banks, six or seven of everything. "If you end up with multiple platforms, how do you innovate if you have to build each new feature six or seven times?" Eccles poses. "That's why you have to integrate these with discipline and always maintain one platform going forward. Whatever you do, you only want to do it once."
It helps that some of the banks that Umpqua has acquired this year are considerably smaller than Umpqua and outsource most of their core processing to a service bureau. In those cases, "It's fairly easy to move them across," Eccles says. "But we're fairly aggressive at getting that done well within that short time."
Although each merger adds traffic and volume to Umpqua's primary and backup data centers, "We've been focused on ensuring our technology platforms will support the bank no matter how big we grow," Eccles adds. "My goal is to ensure that technology will never hinder bank growth, that we'll service the bank as it grows organically or through acquisition."
According to Eccles, he works closely with Brookfield, Wis.-based Fiserv, as much of Umpqua's core processing runs on Fiserv Premier software and IBM (Armonk, N.Y.) iSeries mainframes.
Innovative to the Core
Eccles points out that Umpqua Bank prides itself on innovation, starting with its Innovation Labs, where the bank tests new consumer-facing technology among its branch customers. Eccles notes that his technology organization's very name - Technology Advancement Group - is all about innovation.
"When I meet with my third-party partners and vendors, we always talk about what great ideas and thoughts they have," Eccles relates, adding, "If they're looking for a bank to try those out, we're always ready to partner with them and figure out how we can bring technology in, try it and use it to differentiate ourselves in the marketplace with real customers."
Eccles is part of an innovation group of nine executives who meet monthly to hear from vendors about their latest technology and about what the bank might do with it. "Many banks are more conservative, not ready to innovate to that extent," he says. "We look to drive innovation at every opportunity."
The latest technology Umpqua plans to bring to the Innovation Lab is a new videoconferencing system that customers can use to speak with experts who are not based in the branch, such as mortgage officers. Eccles reports that the bank has been talking to vendors, including Cisco, about what the right product might be.
Umpqua also is getting ready to formally launch mobile banking through Fiserv. According to Eccles, the bank is looking at ways to integrate the mobile banking channel with other channels, such as branches and online, in such a way that a customer could start a transaction in one channel, continue it in a second and complete it in a third. "We don't believe a lot of financial institutions have provided a holistic, integrated experience across all those delivery channels," he says.
But when it comes to internal IT, Eccles is in no such rush to innovate. "I'm more conservative when it comes to innovation as it relates to me delivering services to support the bank and the business," he says. "It's important to understand trends in technology and where technology is going, but I'm not going to do anything too quickly, lose control and therefore put the operational service at risk."
And all IT projects are prioritized and closely governed by the bank's technology steering committee. "Technology should not be making prioritization decisions; they should be business-driven," Eccles insists. "I'm fortunate in that I've got a very good steering committee composed of business executives across the bank that makes hard decisions as to what projects should and shouldn't be done."