East Carolina Bank Conducts Near-Complete IT Makeover

Like the printer-killing scene from Office Space, a group of East Carolina Bank employees, including CEO Dwight Utz, recently grabbed sledge hammers and demolished old Sharp teller calculators, part of a destruction of the community bank's decidedly old school past.

"You either have a culture that embraces change or goes against it," says Will Sampson, the $975 million-asset bank's CIO. "Our staff was so ready for the new technology that they were champing at the bit."

The bank is in the midst of a core overhaul that includes migrating almost all of the institution's systems — except for an internal budgeting engine that's used only once per year — to an outsourced FIS Horizon core platform, with loan systems, mobile and CRM upgrades scheduled for the next few months and an Ironkey security deployment just finished.

The Englehard, N.C.-based bank is among the many financial institutions of all sizes figuring out how to wrap new services such as mobile banking around legacy core systems, either in increments or through full core replacements. At East Carolina, Horizon will replace a series of point solutions. The mobile technology, however, will be entirely new.

The big tech project comes as the bank recovers from the recession. In the past year it's gotten an $25 million infusion from Pacific Investment Management Company (PIMCO) as part of a $79 million recapitalization, and is converting seven branches recently acquired from Gateway Bank in the Hampton Roads area of Virginia. The new acquisition will up its branch network to more than 30, increase its asset size to about $1.2 billion, and heighten demand for new teller technology and branch automation.

The tech gap faced by the bank as it embarked on its recovery is perhaps best exemplified by the Sharp teller machines in its branch network, which are being replaced by a web-based teller system that offers a full view of customers' relationships with the bank, as well as other in-store services such as branch deposit capture.

"It's funny, it's a bank in 2009 and we didn't have a teller system," says Sampson, who joined the bank in 2010. "The bank implemented the teller machines between 1982 and 1984. We weren't even able to correlate the number of transactions per branch to measure volume, and it wasn't simple for us to track account runoff."

Also included in the core migration is a new online banking interface, server and a data storage center as well as a loan origination system. The bank currently does not offer mobile banking at all, but will add full multi-device services early next year, including mobile remote deposit capture via FIS.

"Definitely, the project is a full 'rip and replace,'" says Sampson.

Deploying IronKey Trusted Access will help the bank protect online banking transactions, in line with new FFIEC guidance that stresses layered security. "We'll be able to protect transactions on customers' computers even if they are infected," Sampson says, adding the deployment is also being made in anticipation of stronger guidance in the future, particularly regarding fraud for corporate payments.

The new automated loan processing system is scheduled to be ready by late January, with staff training currently underway. Training and ensuring buy-in is a large part of the overall initiative. The bank has set up ECB University, which is a process by which customer service reps and loan officer receive training on how to use the new technology, with internal certifications to use various platforms. "When our staff saw what they had and what they could have, they were definitely ready for a change," Sampson says.