Surety Bank: Digital-First Banking Requires Digital-First Core
Consumers increasingly prefer to prospect, purchase and interact exclusively through digital channels.
This retail shift has been driven by GAFA: Google, Amazon, Facebook and Apple. The new GAFA standard includes unlimited availability, hyper scalability, individual customization and innovation, all provided almost exclusively through digital channels. Banks are no exception; they must improve their digital delivery to maintain market share and ultimately grow.
The challenge: Surety Bank needs affordable digital services
Developing and implementing digital channels requires a capital investment, but they also provide a community-based financial institution the opportunity to offer affordable services and expand its market. Such is the case with Surety Bank in DeLand, Fla.
“Everybody has a smart phone these days, regardless of net worth,” said bank President/CEO Ryan James. “Technology allows us to serve the widest possible range of consumers.”
Surety Bank also caters to an important niche market, the money service industry. These providers of check cashing, money order and other services are located across the country, so digital service is a must.
“Our commercial customers don’t have time to come into our branch, while others simply can’t due to geographical distance,” James said. “We want to provide our customers with the ability to bank remotely, and enable our staff to service remotely.”
James understands the importance of digital service firsthand. As a young GenXer, the CEO appreciates the consumer retail standard set by GAFA and how banks must meet this standard to attract a new generation of customers.
“Our core had a horribly inferior mobile account onboarding product that required the user to pinch and squeeze to use it on a phone; it wasn’t device agnostic and the customer experience was jeopardized.” James said. “And they charged an arm and a leg to use a third-party best-of-breed. That’s crazy! I know if I’m going to open an account, it starts on my smart phone and I want the ability to finish it on my smart phone, too.”
James also has a strong family connection to Surety Bank – his father, uncle and aunt are all directors on the board. This isn’t just about the bottom line; James’ banking roots run deep.
The roadblock: legacy core had Surety Bank in a chokehold
Surety’s previous core banking software provider, one of banking’s largest technology corporations, made it impossible for Surety Bank to upgrade its digital services and still generate a profit. In fact, due to the core provider’s business model, Surety was losing money, and a lot of it. Under its current contract, the bank pays an average of nearly $8 per month, per user.
“As we grow we must be profitable every step of the way,” James said. “But staying with our old provider would have hindered our growth.”
Surety’s previous core not only charged the bank for each customer, but also added on miscellaneous charges for each channel customers used to access their accounts … even if they only accessed them once.
“It cost us 50 cents per month for each account to be on our system,” he said. “Then, it cost another $1 per month for them to access online banking. Add onto that another $1.50 per month for bill pay. And if a customer wanted to do P2P payments, they were required to sign up for bill pay even if they never used it.”
“Simply put, this business model prevents community banks from growing as quickly as they need to,” James said. “We were spending so much on all these ‘essential’ features that customer profitability really became an issue.”
The solution: NYMBUS SmartCore
Because NYMBUS’ SmartCore is an open API platform, clients are free to use NYMBUS solutions or integrate their own third-party products. This level of innovation and flexibility were what appealed to James.
NYMBUS, a Finovate presenter in 2016, fuses core functionality and a suite of applications and stores it all in a personalized, secure cloud. The platform features a single sign-on and an intuitive, modern user interface that includes a drag-and-drop customizable dashboard.
Detailed customer pages with built-in CRM features allow bank employees to easily access a full 360-degree view of each customer and leverage cross-selling alerts. Customers are also scored to show how much value they provide to the bank.
Best of all, SmartCore is priced as a flat fee, with no add-ons for additional services. For Surety, the cost savings will be significant.
Over the next 7-8 years, James said Surety is expected to save about $1 million on core costs alone.
Quick and easy conversion
Surety signed with NYMBUS in March 2017 and implementation began in October. After a record-breaking four months, the bank was live on the platform.
“NYMBUS did a great job. Their team was all hands on deck, which made for a seamless conversion,” James said. “Some of the biggest hiccups were due to the legacy core. They were the biggest delay in the process.”
Surety hired project managers for the conversion, who, according to James, spent more of their time ensuring the legacy core provider treated the bank fairly.
James said he’s excited about the future now that his bank is equipped with a modern core. Surety went live Feb. 19 with SmartCore and SmartDigital, NYMBUS’ solution for mobile and internet banking. James plans to tap into NYMBUS’ SmartLaunch solution, their newly announced full-service, digital-only alternative for financial institutions looking to quickly acquire new customers and growth.