Banks are spending less on marketing customer information files, known as MCIFs, but that is not stopping Medici Technology Inc.
One year ago, the Hanover, N.H., company entered this slow-growing part of the technology market with its version of software that helps banks divide customers into target groups and tailor sales strategies accordingly.
Seven community banks have bought the Medici Windows-based system.
Kathleen Khirallah, senior research analyst at Tower Group, said large banks are moving away from MCIFs in search of "a more elegant and integrated solution." As a result, annual MCIF spending increases of 25% early in the decade have slowed to 8%, she said.
"But for the smaller banks, it is not yet economical" to abandon MCIFs for more robust software, Ms. Khirallah added.
Like most MCIF software, Medici's connects to a data center, where customer information is processed and analyzed to help banks identify prospects, evaluate the competition, and support decision-making.
Medici's seven founders, industry veterans with a combined century of experience working in or consulting banks, are targeting institutions with $50 million to $3 billion of assets.
Donald F. Cooke, one of the founders, also started Urban Data Processing in 1968, now a Medici competitor in the form of Harte Hanks Data Technologies. He also founded Geographic Data Technology, a computer map publisher.
The seven Medici buyers are Investors Savings Bank of Millburn, N.J.; Mascoma Savings Bank of Lebanon, N.H.; Federal Savings Bank of Dover, N.H.; Cape Cod Co-operative of Yarmouth Port, Mass.; Milford (Mass.) National Bank and Trust Co.; New London (N.H.) Trust; and Sun National Bank of Vineland, N.J.
Investors Savings, with $3.5 billion of assets, 27 offices, and 175,000 accounts, is using Medici to augment its customer information with demographics, income and social status, and services used.
Medici reinforced officials' thinking at Investors Savings about the desirability of opening a branch in Whiting, N.J., because of the density of customers there.
"It can show me a map of New Jersey and with color dots point out the customers with CDs, mortgages, or checking accounts," said Pat Grant, Investors' chairman, president, and chief executive officer. "We could focus in so closely that we could pinpoint one house on a block and pull up information on that depositor."
Medici said a key goal was to make its software easy to use.
"A large percentage of banks with MCIFs don't use them," said Peter Louderback, director of consulting services at Medici, who was previously national financial institution consulting practice director for KPMG Peat Marwick. "That's one of our real challenges. We take a look at the bank's data before sending them back, and we make suggestions. We really make an effort to ensure they use the data."
Medici uses mapping technology to calculate drive-times to and from bank branches in a given area. It can also highlight prospective branch sites, locate competing branches, and determine the optimal number of customers assigned to a branch. It can classify customers by category types such as platinum, gold, silver, and bronze.
Allison Kruse, marketing officer at Sun National Bank, said: "With the click of a button, the information goes into a map. You don't have to be highly computer literate to use the software, and there's not much training involved."
Sun National, with $1.3 billion of assets and 41 offices, is using Medici to profile customers so it can sell them more products through direct-mail marketing and better strategic planning.
Previously, Sun National used lists from direct-mail houses, but no marketing software. Bank executives looked at other MCIF systems, but this one "definitely offered a competitive price compared to other products out there," Ms. Kruse said.
The three dominant providers of MCIF software are John Harland & Co., Atlanta; Harte Hanks, Billerica, Mass.; and Customer Insight Co., Englewood, Colo. Collectively, they have about 1,500 U.S. customers and 90 internationally, according to Tower Group.
