Frandsen Financial Gets Up to Speed with Same-Day Payments

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While same-day payments might still be a ways away, Frandsen Financial in Arden Hills, Minn., is ready.

When the banking industry last year adopted a plan to allow same-day payments, Frandsen executives knew they were in trouble – the bank could barely keeping up with the existing payments framework. Balancing ACH payments was a cumbersome, time-consuming process. Bank employees spent almost two hours each day manually downloading and copying large batches of files.

The process was slow and "very much prone to error," said Dave Buggeln, director of information systems at the $1.5 billion-asset company.

Executives decided they needed a faster, more efficient method to keep up with "where the payments industry was going," Buggeln said. So it invested in automation software.

The bank chose SMA OpCon, a program produced by SMA Solutions in Kingwood, Texas. The software automatically processes ACH payments and loads files to the bank's core system.

Since installing the program in October, the bank's IT department has shifted its focus away from "mundane, repeatable" tasks. Employees who once spent their days downloading and copying files now focus, instead, on monitoring ACH payments for problems.

"Along with faster payments, there's a lot more risk," Buggeln said.

The bank has not cut its IT staff since installing the automation software — which cost the bank less than the salary of a full-time employee, according to Buggeln.

The ACH project was part of a broader initiative at Frandsden to organize and automate the processes that power the bank's computer systems.

Like most IT departments, Buggeln and his team are responsible for "hundreds, if not thousands" of computer scripts, written in several different languages, located on a number of different servers.

Many of the commands also run on different schedules. For instance, some processes run when the Fed is closed, while others require the Fed to be open.

"Running our enterprise was becoming unmanageable," Buggeln said.

SMA OpCon allows the bank to monitor most of those processes on a centralized dashboard. When an error occurs, Buggeln and his staff can quickly diagnose and troubleshoot the problem.

Since installing the software, Frandsen has automated a variety of tasks, including regularly scheduled SQL database commands and core systems updates.

Overall, the automation projects have required bank executives to adopt a new attitude toward technology, Buggeln said.

"There's a certain kind of courage" that comes along with adopting automation, he said. After doing a process manually — and the same way — for several years, it can be hard to switch gears.

"There's an element of fear in letting go of that control," Buggeln said. "But the proof is in the pudding."

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Technology Digital banking Core systems