Keycorp's decision to renew a computer processing contract with SEI Corp., of Wayne, Pa., is shaping up as a boon for a technology vendor that really needed one.

The value of the contract, which is for trust and portfolio management processing, was not disclosed.

But officials of SEI - a leader in trust computer services and mutual fund administration - called it a "multiyear, multimillion-dollar" deal.

Some estimates put the value at $4 million to $5 million annually. If true, it would dearly rank as a major deal for a vendor that has lost some important clients of late.

"We have had our Struggles in the marketplace over the last few years," said Robert Wagner, senior vice president in charge of SEI's national bank market unit.

"A lot of clients questioned whether we were committed to this business," he added.

Last September, for instance, SEI relinquished its role as the distributor for Banc One Corp.'s $5.1 billion-asset mutual fund family.

In another blow, a few years ago First National Bank of Clearwater, Fla., did not renew its contract to have SEI handle data processing for the bank's trust department.

The bank, which had $797 million of trust assets, opted to bring the work in house, citing its need for greater flexibility at less cost.

But despite the setbacks, SEI remains a formidable force. According to the Tower Group, a consulting firm in Wellesley, Mass., SEI is the largest provider of computer services to bank trust departments.

SEI provides trust services to 40 of the country's 100 largest banks, and counts 700 banks among its clients, Tower reported.

Tower also estimated that about $106 million of SEI's $247 million of revenue last year came from technical services.

Mutual fund researcher Lipper Analytical Services, Inc., of Summit, N.J., ranks SEI as the fourth-largest administrator of bank-related mutual funds, with more than $19 billion under management.

To keep more bank clients from fleeing, SEI poured millions of dollars. into technological upgrades last year, according to the company's president, Henry Greer.

The Keycorp contract renewal gives some vindication of SEI's strategy. Keycorp, which merged with Society Corp. earlier this year, ranks as the nation's 11thlargest bank holding company with $163 billion of assets.

Although Keycorp reportedly considered other service providers, SEI was no underdog in the deal. Both Keycorp and Society had used SEI to provide trust and accounting services before they merged.

SEI will handle these services for about 35,000 Keycorp accounts. An in-house computer system will continue to serve about 4,000 to 5,000 accounts.

This system was developed by Ameritrust Corp., which merged with Society Corp. in mid-1992.

Keycorp will use the SEI Trust 3000 investment accounting software, said Michael D. Hansen, executive vice president of Keycorp's service unit.

SEI's Mr. Wagner said the Keycorp contract is one of a number of "exciting business opportunities" in the hopper. "There will be more coming," he added.

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