For Luke Lively, there's IT complexity in the path to user simplicity. "Because of the huge diversity in the types of businesses that we serve, we have to be able to manage the account standards, the fee structure of the loans, etc. for a very broad customer base," says the CEO of United Central Bank, a Texas-based institution that specializes in Small Business Administration loans.
In UCB's case, client diversity is both ethnic and geographic, which Lively says requires a flexible, easy to use interface combined with processing that can handle reporting and compliance for SBA loans.
To manage the tech infrastructure and a footprint that's relatively large for a $2.6 billion institution-including parts of Texas, New York, New Jersey, Chicago, Atlanta and Los Angeles-the bank recently outsourced its SBA core processing to Fiserv, calling on its Premier system.
The bank also hopes the core upgrade will help manage an influx of new clients from Mutual Bank-a Chicago-based institution that UCB acquired last year, doubling its asset size-and boost end-user and processing automation to lure more personal banking business and win new SBA accounts.
"We saw an opportunity to [leverage] our customer base [through IT innovation] that we had missed out on," says Lively, adding the addition of mobile banking and a more robust Website managed via a less expensive hosted core are vital customer acquisition and retention tools, since the bank only has about two dozen branches scattered nationwide.
UCB's new system includes account processing, Internet banking, cash management, electronic document management, bill pay, EFT, wire transfer processing, branch and merchant source capture solutions. It's hosted by Fiserv at its data center in Houston, which is near UCB's headquarters. "SBA loans have to be processed in a certain way, you have to make sure the system is compliant for recording and management," says Dave Wegman, svp and general manger for Fiserv's Premier product, who says the compliance challenge includes ensuring the processing system can handle payment splits, accruals, track the status of the loans, and making sure what the bank reports to regulators is proper. Wegman didn't say which legacy UCB tech platforms were integrated by Premier and which were replaced and the parties didn't provide ROI numbers, with Fiserv saying the conversion is still underway.
The conversion also includes verbal hurdles-UCB does business in more than two dozen languages. Analysts say that while most American business owners who speak a language other than English as their first language "bank" in English, Fiserv says its platform enables affinity group customization that allows users to access documents in other languages while online.
UCB additionally hopes to grow personal banking relationships with the business owners, which the bank feels can be aided by the new core platform's ability to integrate SBA technology with consumer banking and CRM capabilities. "We had never taken advantage of cross selling, and the connection with Fiserv will allow us to do that," Lively says, adding that consumer banking is only about 10 percent of the bank's current book of business. More consumer banking business should prove lucrative for the bank, considering that a large portion of its SBA clients are businesses owned by doctors, lawyers and other professions common to the high-net-worth segment, which makes the mix attractive for financial institutions, says George Tubin, a senior research director for Towergroup.
But it's a tough double play to pull off for smaller banks. Jim Washburn, a practice leader for Cap Gemini's consulting group, says the SBA processing platform must also include functions and products for high net worth. One way to accomplish that mix is by "virtualizing" the back office through outsourcing core processing to make the entire technology infrastructure more scalable and flexible. "[The bank is] then an aggregator of specialized services that may be provided on an ASP basis," Washburn says.
Fiserv faces competition in the space from FIS, which offers an SBA solution that leverages business intelligence to extract data from the bank's core system for SBA reporting purposes. "It significantly reduces the time involved in SBA processing," says Gail Angel, vp and director for FIS' commercial treasury solutions group, adding the product also manages both SBA and personal and business solutions online.