Magazine article American Banker

Big League Third-Party Customer

Magazine article American Banker

Big League Third-Party Customer

Article excerpt

Faced with the task of incorporating a new acquisition into their rapidly expanding empire, senior executives at the predecessor of Nations Bank decided on outsourcing in 1988.

That decision by the former NCNB Corp. changed forever the way the sprawling financial institution would process data.

But unlike other banks that have turned to third-party service providers, NCNB was in sound financial condition when it made the decision.

Today, four years later, the bank is in final stages of outsourcing all general mainframe processing needs as well as systems that drive trust, retail banking, corporate banking, mortgage lending, and bank card activities.

Unique Deal with Perot

"We were looking at many, many operating systems," explained Timothy P. Hartman, chairman of Nations Bank West, the Texas division. "We'd still be consolidating the first 100 branches, otherwise."

Nations Bank contracted with Perot Systems in 1991 to operate the bank's computer center located outside Dallas. In this five-year arrangement, Perot purchased the operations center from Nations Bank, hired the majority of the bank's 220 employees, and began selling data-processing services from the facility.

To be sure, Mr. Hartman said, this strategy is proving to be a crucial weapon in NationsBank's acquisition binge, especially in the union of NCNB with C&S/Sovran Bank.

"It has been invaluable," Mr. Hartman said. "Because we have a different team beginning the same day on plans to convert seven to 10 different functions, we finish the job in one-seventh of the time. …

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