lending: Integrating Systems for Maximum Data Access

Given the ultra-competitive nature of banking, technology is no longer optional. But in the rush to keep up, the process often leads to a money pit syndrome.

Consider data warehousing: The operational efficiencies and competitive advantages created by making the bank one centralized, self- feeding information machine are obvious and intuitively appealing; but because every software component now has to be able to communicate with every other component- previously the bank system could be a Babel of discrete systems-the costs of getting the systems to understand each other are often daunting.

But even community banks think the ticket is worth the price. Southern Commerce Bank, for instance, a $55 million- asset commercial lender based in Tampa, FL, recently discovered a new tool, called OnePath, that allows all its lending system components to communicate with each other and its data warehouse. OnePath was developed by Carmel, IN-based Baker-Hill Corp. and costs between $10,000 and $750,000 per year, depending on the size of the bank.

OnePath operates by packaging all of a bank's information so that the bank's other systems can understand it, explains Southern Commerce evp Thomas M. Berdan. The paper flow for Southern Commerce's Small Business Administration lending business, for instance, is handled by a system called T-Soft, acquired from an outside vendor. But, says Berdan, OnePath communicates directly with that and with the bank's data warehouse as well, allowing everyone involved in the lending process to access the same information on the e-mail system, as needed. "It's significantly helped us on the communications side, if only by eliminating the need for all those meetings between loan officers and loan administrators," says Berdan, who figures that 90 percent of Southern Commerce's loans fit into the system. Southern Commerce typically writes 50 to 65 loans per month, worth some $1 to $1.5 million, he says.

Among the advantages of OnePath is that it's built from pre-fab code provided by Microsoft Visual Basic for Applications, which creates a foundation designed to accept new components. "It's very, very component based," says Mark Hill, president of Baker-Hill. "The whole idea of it is for users to be able to extend the system themselves without changing the underlying system."

-reinbach tfn.com