Darling to Go Nationwide With Balance Sheet Service
A service bureau arrangement such as banks use to reduce data processing costs will soon be available to help them analyze their balance sheets.
The Darling Consulting Group said it plans to open in September a large computer center that will provide banks nationwide with an alternative to buying and running their own asset/liability management systems.
Such arrangements - which the group, based in Newburyport, Mass., now offers only in New England - typically result in savings that reach into the tens of thousands of dollars, officials of the consulting group said.
Revenues Said to Rise
More significant than those savings, however, are the increases in income reported by the financial institutions using the system.
According to bank officials, the improved organization of balance sheet information, coupled with portfolio management advice from the group, has resulted in annual income increases of up to $100,000.
A straight service bureau contract with the group, in which the company simply processes a bank's balance sheet numbers to satisfy regulatory standards, costs about $20,000.
The big payoff reported by most institutions comes as a result of allowing the group's consultants to help them interpret the numbers.
Gains in Maine
"The cost savings are good, but they are not nearly as significant as the income gains that we have seen," said Virginia M. Vendrell, comptroller and vice president at $200 million-asset Bar Harbor Banking and Trust Co., Bar Harbor, Maine.
Ms. Vendrell said Bar Harbor Banking, which signed on with the Darling Group in January, has seen income increases of at least $40,000 in the first six months of using the service bureau.
The bank sends its quarterly balance sheet numbers on paper to the group's processing center on Cape Cod, Mass.
After running software that processes the numbers in a format required by banking regulators, consultants from the Darling Group meet with bank officials to match the bank's investment strategy with its forecast funding needs and its capital position.
"A service bureau arrangement can make it easier on a bank that is having trouble processing all the numbers on its own," said Goerge K. Darling, the company's president.
"We try to take that a step further by helping them figure out what to do with the numbers," Mr. Darling said.
The recent announcement marks the first major move by Darling Consulting since its founder broke away from SunGard Financial Systems to found the company in January. Twelve banks are currently online.