Agreeable Alliances

By Newkirk, Kristine M. | Independent Banker, October 1997 | Go to article overview

Agreeable Alliances


Newkirk, Kristine M., Independent Banker


Partnership complement your product lines

Service expectations at banks are high. Many customers today expect to get their money from an ATM, access their checking accounts on personal computers, place their savings in mutual funds, get rewards from their credit cards and qualify for loans electronically.

A few years ago offering such a cornucopia of services would have seemed out of reach for most community banks. Now the task is easier, say community bankers who do so by ferreting out servicing contracts and partnerships with the pros. Business alliances help community banks quickly and efficiently engage in activities they might otherwise avoid because of size limitations, or lack of resources and expertise.

Whether through structured contracts that provide service guarantees and management oversight or through less formal vendor-contractor arrangements, partnerships can help your community bank expand its service offerings at affordable prices.

ELECTRONIC BANKING

Electronic banking is reaching its stride at smaller banks as well as larger ones thanks to a surge in third-party providers and servicers. Basic electronic options-such as voice response systems-and even more sophisticated transactional services-such as ACH and debit cards- are within your reach with the right business partner.

Richard Tucker, president of TriState Bank, sel-ected Fiserv in Portland, Ore., the electronic funds transfer processor for IBAA Bancard Inc., to provide back room support for ATM and debit cards at his $123 million-asset bank in Denver, Colo. Fiserv's processing and support costs start at $600 a month.

No stranger to ch partnership arrangements, Tucker says this one counts as Tri-State's third cooperative deal for card services. And by far this card arrangement is the bank's most profitable, he adds. "Fiserv does a better job in handling ATM costs, so we've been able to earn greater income revenue through them," he explains.

Tucker also says he appreciates IBAA Bancard's hand in ironing out the Fiserv arrangement, which means that he didn't have to negotiate the contract.

Like debit cards, electronic banking is finding receptive audiences all over, including Thomaston, Ga., a town located in a rural county of 26,000 residents. The Bank of Upson serves Thomaston and its surrounding community. Henry Jordan, vice president of the $120 million-asset bank, says Bank of Upson's recent investment of about $20,000 for home banking software and marketing already pays dividends.

"We have signed approximately 150 people for home banking," Jordan reports, adding that about 20 percent of those product subscribers are new bank customers.

Jordan says teaming up with Goldleaf Technologies Inc., a Hahira, Ga., technology company, made Bank of Upson's home banking implementation easy. "They provided the software, implementation, marketing ideas, training and now ongoing technical support for our customers," he remarks.

Chris Bauer, Goldleaf Technologies' vice president of sales and marketing, says the software company specializes in service contracts with community banks. Its prices range from about $12,000 for ACH origination software to about $40,000 for an Internet banking host site, she says. The average price of a Goldleaf product costs about $20,000.

RETIREMENT PLANNING

With Social Security funding in question, retirement planning is in high demand by consumers and the businesses that employ them. David Hayes, president of Security Bank in Dyersburg, Tenn., a $115 million-asset institution, recently added retirement planning to his bank's product menu. He says retirement planning helps his bank solidify existing business relationships and reach out to business customers' employees.

Like Tucker at Tri-State Bank, Hayes found the product addition "pretty much a turnkey operation" through IBAA Financial Services Corp., IBAA's financial services subsidiary. …

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