Banks serving small and midsize businesses have found their customers are willing to give them a consultative role in how they manage their firms. That advice is extending into fintech decisions too, as banks offer up tools and guidance geared toward gaining efficiency through digital processes.

Business customers are in fact facing the same issues that many small banks are grappling with, such as a shift to paperless tasks, note executives with Signature Bank in Rosemont, Ill., a village half an hour northwest of Chicago. The bank realized there’s an opportunity then to share knowledge and deepen relationships, said Anne Doligale, senior vice president at the $800 million-asset bank.

“We practice what we preach,” she said. “We have the same technology in-house that we’re selling.”

Signature is a boutique business, with only two branches serving mostly small and midsize businesses in the Upper Midwest. It devotes roughly 15% of its budget toward technology. “Every other bank is a retail bank that tries to do commercial,” said CEO Michael O’Rourke. “We’re the opposite.”

Its size allows it to layer personal service on top of its technology. O’Rourke recalled how he called a customer after the bank received a check via remote deposit capture for $30 million.

“You’re sure you didn’t want to walk that one over?” he asked them.

But the bank doesn’t put limits on the amounts its RDC function will handle because O’Rourke prefers to put the burden of risk on the bank and keep its trusted business customers from having to come in.

“Checks have holds, so we can deal with whatever we need to deal with, but it needs to be convenient and seamless for the customer,” Doligale said.

Signature Bank CEO Michael O’Rourke (l.) and SVP Anne Doligale.
Signature Bank CEO Michael O’Rourke (l.) and SVP Anne Doligale.

O’Rourke has been CEO for more than 13 years and Doligale has been a senior vice president at the bank for more than eight years. The executives explained how the bank manages relationships with customers, aims to offer middle-market customers a better experience than big banks and integrates the bank’s technology into their clients' business without creating more work for them.

What follows is the interview, which has been edited for length and clarity.

How does Signature compete with the big banks in terms of technology?

ANNE DOLIGALE: I came from large banks, and what I found frustrating was that they have a product set that they only offer to the large corporate market. In working with middle-market, family-owned businesses, we've found technology is more beneficial for our client base because they’re the ones that are trying to do so much with so little.

Automation is perfect in that space, but these businesses are often left to deal with a quasi-retail solution from other banks. It’s like, "Here’s a retail platform, let’s give it a little bit of a spin so it feels business-y." Our goal is to integrate our technology into their operation so that they can grow their companies without adding to headcount and reduce the amount of time and effort that’s spent in the different areas.

Currently, we’re focused on the payable space. It takes middle-market companies a long time to manage the paper involved with payroll. So we’re developing services for the next- generation CEO who’s only used to doing things on a mobile device. We think it’s really important that we have technology to meet that need.

MICHAEL O’ROURKE: The key is the CEO. It’s the person that is really going to appreciate and use these services. They’re using it for ease but also to reduce headcount, reduce paper and reduce space. We’re an $800 million bank. If we would’ve been an $800 million bank 10 years ago, we’d have 120 employees with six branches. We’re an $800 million bank with 57 employees and two branches because of technology.

DOLIGALE: We practice what we preach. We have the same technology in-house that we’re selling. So what we do different from the other financial institutions that have a similar product is we sit down with the accounts payable and the accounts receivable clerks. We sit down with them to go over what they are doing today; we Visio diagram it, and then we say, “Hey, this is what we have to offer, and we’re going to sit with you and we’re going to do it with you.”

There are a lot of articles out there that say that medium-sized businesses are the last to adopt payroll technology. Well, that’s because they’re busy running their business. So what we do is we’ll sit down, and we’ll integrate it with you. We’re not going to give you a manual and leave you. We’re going to take it from A to Z. Why is it beneficial for us? Because when they’re at Z, they’re not going to fall off a product. They’re not going to have customer servicing issues.

In dealing with small and midsize businesses, is there still a desire to meet at a branch?

DOLIGALE: Not really. We have various different virtual vaults and things of that sort for any cash-related businesses. We have clients that have our branch in their building and they still use their mobile or the remote deposit machine to deposit.

O’ROURKE: I tell the story about the largest check ever deposited at the bank. It was by one of our customers just a block away. It’s amazing how it becomes second nature. They wouldn't even think to walk that one over.

What kind of fintech partnerships have you participated in or that you’re looking at?

DOLIGALE: The payable space is an opportunity for us. Last year we did phase one of a payables product, which typically is only offered to large corporates. That would be utilizing purchasing card platforms to move away from check processing and more toward cards and virtual cards. It’s been very well received by our customers.

Phase two will be more of a comprehensive payables. We’re looking at electronic invoices coming in, electronic approvals via a mobile device for the CEO, and various different payment types. We’re trying to get away from the check as much as we can using ACH virtual and check as a last resort.

What is a typical way for you to integrate that into your platform? Do you use APIs?

DOLIGALE: Yes, we want to provide our customers with single sign on, one point of access. We don’t want to have them go to this system for this, and another system for that. Many of our business owners also bank with us personally. So the customer has to be able to do their personal banking and their business banking in the same platform, same sign-on. There are business owners that move money from kid, to mom, to dad, to business entity. You have LLCs too. So it is a single point of access for all activity.

How much of the bank is commercial versus retail?

O’ROURKE: It’s probably 85/15 now. That hasn’t changed much because we really haven't changed our business model, which is calling on middle-market companies. Retail branches are important to the success of the bank, but where we see the growth is in these middle- market businesses.

What are some of the biggest challenges in terms of tech that the bank has run into?

DOLIGALE: Ease of customer adoption. Our customers are dealing with legacy systems that they haven’t upgraded yet. Our challenge is helping them to integrate into our systems. You can use as much of the automation as possible, but we help them to rewrite their software or take information in a PDF and revise it so that they can integrate. Our biggest challenge is legacy systems at our customers’ offices.

You mentioned payables. What are other areas that you’re looking at transforming?

DOLIGALE: Security and fraud, together. There’s always something out there. We use a multipronged approach. We get an email, we’re calling or we’re texting. We’re not using the same method to confirm. And that’s really our whole stance on fraud and security too — all of our systems have a multipronged approach.

You’re never going to foolproof anything. So we just make sure that there are multiple points of failure that can happen within that before anything can go out. We’ve got great analytics in the background, and then we’ve got that person who is the last stop. Data is all summarized; we’ve got the person with the eyes and the knowledge and the customer information because we know all of our customers so well, they can make that final determination.

How does the bank hire talent like that?

DOLIGALE: We hire people that are more qualified than the position that they’re in, so we hire from the big banks. Everybody that’s here has a big-bank background. Everybody that’s here wears multiple hats, which is really valuable, because they know various different parts of the organization so they’re not siloed.

O’ROURKE: We have to find people that want a little bit of an entrepreneurial bent. You’re working here; you’re not running ACHs for companies A to C. You have access to senior management, you have access to all the clients, and I think it’s a fulfilling job for people that are of that mindset.

DOLIGALE: People don’t think of banks as being businesses, but we’re a small business just like our customers. They’re working with every aspect of a business, so you get to learn more than just banking. And we are more than a bank. We’re an IT consultant. We’re the cheapest paid consultants out there. Everybody should have a good banker, because they’re free.

Has there ever been any thought into moving beyond financial services, into the identity space and selling that software to your clients?

DOLIGALE: Absolutely. Especially at the holding company level, we're not afraid of adding on complementary services. There are a lot of projects on the horizon. There’s so much opportunity because we know our customers so well to offer complementary product lines, cybersecurity analysis being a big one. We have the knowledge to do such risk assessments. We know what to look for in a company because we do it here internally. So I definitely see that as a product set that we could start to offer our customers.