BBVA Compass says it is starting to get a payoff from its epic core overhaul.

Manolo Sanchez, the Birmingham, Ala., company's chief executive, and Sergio Fidalgo, its chief information officer, say the new Accenture Alnova core system has been implemented to support checking, savings and certificates of deposit throughout the bank and all its branches, and that BBVA Compass has begun to note measurable results. Consumer loans should be migrated to the new system by the first quarter of next year. (The bank puts the internal and external costs of the multiyear project at $362 million; that is not the value of its contract with Accenture.)

BBVA Compass, a subsidiary of the $740 billion-asset BBVA in Madrid, has 716 branches in seven states across the Sun Belt. All retail transactions are now processed in real time, rather than in batch mode. "In the 21st century, clients are using multiple channels," Sanchez says. "You can't do that and not have real-time transactions. Try to explain batch processing to a 14-year-old. This is a real-time world, and banks have been left behind in a non-real-time world."

"It makes no sense for the customer to wait until the next day to get his transaction posted," Fidalgo says. "The customers are seeing and liking this. From an ATM, they can check on their mobile or Internet banking transactions, which are posted immediately."

Another advantage of the new core system is reduced processing costs in the retail network.

"We planned to reduce costs by 20% by 2015, but we're getting close to a 15% reduction this year," Fidalgo says. The savings result from imaging checks at the teller windows, eliminating courier and back-office costs. The new system has also shortened the time it takes to open a new deposit account to five minutes from more than 40.

The bank has merged 26 customer information files into one customer database, providing a thorough picture of the customer relationship. "That was the first thing we put in place; we have also continued to develop a centralized CRM system," Fidalgo says. "We have been working with customer intelligence to generate products that better meet customers' needs." In one example, the bank is flagging customers who have CD coming due in a week or two, and sending targeted leads to employees so they can call the customer and suggest an investment product to them.

"The rest of the return of these projects comes from the fact that we have a significant competitive advantage versus the rest of the U.S. banking industry," Fidalgo says. "We'll be able to create more products and growth, without growing our back-office processing."

On a more philosophical level, BBVA Compass' leaders are pursuing a vision for the U.S. banking industry in which it turns into a relationship banking model. "Banks are being disintermediated," Sanchez says. "Before the mortgage crisis, 70% of mortgages were generated by nonbanks. The same is true for auto loans and other basic services. This is 101 banking not being done in banking institutions. It's turned into a commodity business."

BBVA sees an opportunity to provide financial services for U.S. clients throughout their lives. "BBVA has done this for years in so many markets," Sanchez says. The goal is to be able to cross-sell better and serve customers better, through organizational changes as well as new technology.