Bank of Idaho discovered gaps in its trust management program at the most inopportune time-right at the start of an expansion of the department.
"As we were getting bigger, the service wasn't what we wanted it to be, and our customers were expecting even more in terms of online statements," says Herb Wallace, vp and senior trust officer for Bank of Idaho, whose footprint covers the southeastern portion of the state. Wallace says that as his unit was starting to expand, it was overtaxing the bank's trust management legacy system. And that was threatening even some of the more basic functions performed by the department, such as communicating performance numbers with customers. "It was getting to be a problem at the end of the year, when it was getting harder to get statements out."
To fix the problem, the bank has deployed a new platform called AccuTrust, an AccuTech product that gives a snapshot of trust department operations for various job functions within a department. Among other things, AccuTrust allows the bank to send statements to customers at almost anytime, and it broadens the bank's ability to crunch account and market data.
The move has paid off for the bank. In a couple of years, it's doubled its assets under management in the trust department to about $250 million, while saving more than 60 percent on operational costs and adding only one person to its staff.
Wallace says the platform allows it to use historical data on costs, dividends, yields and other performance-related information-a range of function that's permitting the institution to level the playing field with much larger financial competitors from outside the region. "We can now make investments easily for our customers and look at returns and performance of that investment quickly," Wallace says. "We have a pretty small shop, and we're able to do everything that the big boys do."
The Bank of Idaho execs didn't say which platform they used previously, but clearly, like a lot of community banks, Bank of Idaho is under pressure from larger national banks and other non-bank financial institutions offering trust management services. To compete, Bank of Idaho's staffers had to access and crunch numbers faster than they could before. And they also needed to deliver that information to customers more regularly than periodic paper-based statements.
Once a pretty predictable, safe place to do business, trust management is becoming just as hypercompetitive as other financial products, with an increasing number of players using new Web-enabled tools to gain marketshare. As a community bank, Bank of Idaho can use its local ties to win customers-but neighborhood goodwill only goes so far in an automated age.
Bank of Idaho believes its found the platform that will help it stay competitive in AccuTrust. An administrator, for example, can use the product to view the performance of various trust accounts versus investment objectives and where an account stands in comparison to the larger market. The technology also allows bank staff to get up-to-the-second information on how the larger markets are affecting accounts, how much money is available for investing, if bills were paid and the percentage of stocks and bonds. Fund managers can also print out worksheets, listing how items are taxable during the year, showing interest, dividends and capital gains.
The trust departments can also obtain a view of the overall activity of the department, including the opening and closing of accounts, overdrafts and other functions, viewing those transactions in a more timely manner than was possible in the past.
Ray Unger, president and co-founder of AccuTech, says his firm also updates the database nightly to keep market, investment and historical information up to date.
"It might be easier to send a PDF (statement) and be done with it; it's better to have real-time information for dynamic reporting."
Critically, the bank can now print statements for its clients at any time, not just at the end of the month, quarter or year. "Our customers wanted statements faster than we were able to deliver them, and it was hard to get access online (under the old system)," says Ruth Summers, trust operations officer for Bank of Idaho. "And we're able to store more information than we were before."
"The real-time statement option is a great feature for the customers; they can access their account anytime they want and get a statement," Wallace says. He adds that the fast access to statements makes for a more accurate financial picture and easier changes in investment strategy. "Before they only got statements once per month, or even quarterly in some cases."
