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Tech-savvy bank moves IT from expense column to revenue side

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Ghan DeSai says BOLTS has provided a way for Team Capital Bank to turn its IT expenses into a revenue-generating operation.
Ghan DeSai says BOLTS has provided a way for Team Capital Bank to turn its IT expenses into a revenue-generating operation. - ()

The information technology department at Team Capital Bank is doing more than keeping electronic communication running smoothly: It is generating revenue.

"You're not going to find too many any banks with IT departments taking a lead in becoming profit centers," said Ghan Desai, Team Capital Bank's chief technology officer.

Desai is head of a seven-member IT department that recently unveiled BOLTS, short for Business Objects Library of Tools and Services, an initiative in which Team Capital Bank markets software apps it had been applying internally to outside firms.

The group has added $250,000 in revenue year to date, Team Capital Bank said.

Its first product is ACH Manager, a fraud and compliance tool that automates functions normally handled manually. Team Capital Bank is undertaking the venture through a partnership with Open Solutions, a provider of banking technologies.

ACH — or Automated Clearing House — is the electronic network that makes financial transactions possible. Governed by the Federal Reserve, the ACH system processes debit and credit transactions in batches, including direct deposit transfers and consumer payments ranging from insurance to mortgage bills.

ACH Manager performs checks to keep the system running properly, such as validating the customer and enforcing credit limits set by the loan officer. Desai said ACH manager can do work that would otherwise require several employees, more so depending on the size of the company.

"Our goal in the back office is to streamline the banking process," Desai said, adding that companies can then devote resources elsewhere.

Aside from better efficiency, Desai said ACH Manager has built-in fraud-monitoring controls that improve security when handling large volumes of transactions.

"Whenever you have human beings ... mistakes inevitably and inadvertently happen," he said.

Team Capital Bank began using the ACH manager internally in February 2011. The company has sold 60 licenses for the program to COCC, a Connecticut-based provider of banking technology and software, earlier this year. COCC client Farmington Bank, a $1.8 billion bank in the Constitution State, is the first customer to go live with the ACH platform. Desai said Team Capital Bank hopes to build on that momentum by adding new customers.

"Now that we have that as a large client, it gives us a certain amount of stability," said Desai, also the bank's chief information officer. "That gives us a tremendous amount of credibility as we enter the market."

Team Capital also is developing an online banking app that allows call center representatives and other bank employees to help customers with online banking issues such as unlocking accounts and resetting passwords.

The company showcased the app at Open Solutions client conference this April in Las Vegas. Desai said the company has lined up about 30 prospects, mostly banks and credit unions, including several in New Jersey.

While BOLTS programs may catch on with customers, Team Capital appears to be distinct among banks providing such services. American Banker magazine in February named the program among the country's top 10 community bank information technology initiatives.

New Jersey Bankers Association spokeswoman Emily DeMasi said via e-mail the group is not aware of other banks in the state pursuing a similar venture.

Formed in 2005, Team Capital Bank reports $943 million in assets with about a dozen branches in two states. The Bethlehem Township, Pa.-based company's New Jersey division includes six branches, in Clinton, Far Hills, Flemington, Phillipsburg, Somerville and Phillipsburg.

In describing the philosophy behind BOLTS, Desai said the company isn't so much creating anything as its connecting various elements — through virtual pipes of a sort — that already are used by banks.

Desai said the staff sees itself akin to a group of plumbers. That's how the company coined the term: BOLTS.

"Each pipe we build is a bolt," Desai said. "ACH is a bolt. Online banking is a bolt. You improve compliance. You improve controls. You reduce costs."

The company's commitment to its own products helps, Desai added.

"One of the nice things about our products is we're using it," he said. "We're drinking our own Kool-Aid."

E-mail to: tomz@njbiz.com
On Twitter: @biztzanki

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