By: John Adams
Bank Technology News
February 7, 2007
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Gail Ramos says that in her job as vp and senior trust officer for Cape Ann Bank, the market changes so fast it requires her to reinvent strategy every five years or so. And the latest plan relies more on automated investment models with less human-generated work than ever before.
'We're facing more competition now. At one time, all we had to do was beat out the trust department in the neighboring town's institution,' she says. 'Now, we get competition from everyone from brokerage firms to financial advisors, and we need to have the products to address that.'
For the $235 million-asset institution that serves the region just north of Boston, that challenge means automating functions performed in the bank's Trust and Investment Division. Excel spreadsheets and transaction slips are hitting the dustbin, replaced by a platform that creates 'what-if' scenarios on proposed mutual fund trades and their impact, along with single-page looks at client data, contact info and asset information.
Ramos says the moves are necessary to serve the emerging class of Baby Boomers, a generation that's more investment-focused, tech savvy and approaching retirement with many more financial planning options than prior generations. As the institution's target market changes, the single-location bank has been steadily growing at about five percent in book value per year, and is in the midst of a territorial expansion of approximately 25 miles.
'We've had to morph ourselves into more of an investment management model,' says Ramos, who has been running the department at Cape Ann for 15 years. 'We're now marketing to sophisticated investors and we have to be able to give them what they want.'
To reach its customers, and to keep the institution from being gobbled up by a larger competitor, the institution must be ready to serve each customer at the point of contact with investment options that take into consideration the waning of traditional trusts as a retirement vehicle, along with changes in estate laws, tax regulations and volatile market conditions. 'We're selling the same product as everyone else,' Ramos says. 'The only way to differentiate ourselves is through service.' And that means when the bank is engaged with a customer, there's not time for rate sheets and generic projections that were commonplace in the past. 'If we were doing all of this by hand, it would be impossible to do.'
Cape Ann has deployed a Windows-based product from AccuTech that's operating on both administrative and customer-facing fronts. 'The pushing out of paper is on the administrative side, while the second aspect is taking on additional book value on the investment side and give it the same level of attention that we did before,' says Ramos, who says the institution's expansion plans have gone forward with minimal growth in staff.
By way of example, Ramos says the institution's portfolio management system now does portfolio modeling for mutual fund trades and equities, helping the firm monitor cash positions and how investments align with the client's overall investment objections. On the execution end of trades, the technology also offers straight through processing, which increases efficiency. Ramos' department can also view the entire scope of client information without navigating various screens for client data, contact information and asset information. She is also able to track communications with clients to ensure that assigned tasks are completed internally via a tracking system.
The institution also makes heavy use of an investment proposals program, which allows the firm to analyze a wider variety of wealth management options for larger or more active accounts. 'For those who are more hands-on, the larger accounts that don't lend themselves to marketing, we can give them a look at the impact of an investment strategy on things like income and capital gains.' Ramos says.
Ray Unger, the president of AccuTech Systems, says that since the product is a 'total Windows' application and not a 'legacy-based system,' it can be quickly updated so modeling programs can take market and regulatory changes into consideration. 'It also puts all of the information on one screen, which makes the product easier for an administrator to stay on top of his or her accounts,' Unger says.
Cape Ann's moves are part of a trend toward providing broader account information and more transaction options from a single location, and doing so quickly to 'lock in' a customer's business. Richard Smith, vp of CRM strategy for Green Beacon Solutions, which provides CRM technology and advisory services for financial institutions and technology firms, says that's key in customer retention. 'The more products a client has with an institution, the less likely he or she is to move onto another organization.'
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