Published in Transform by Joe Devlin Click here for list of articles
  July 2001 Why replacing paper-based remittance systems with electronic remittance is so difficult-and how to go about pulling it off
IntroductionMain ArticleMixing PaymentsGauging EBPPThe Check & List Problem
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Banks and billers face a muddled environment of electronic and paper-based processes. The latest technology merges mixed payments and streamlines conventional transactions.


      Bankware Medical Case Study

Bankware Medical Case Study

Patrick Koster, marketing director of BankWare of Birmingham Alabama, helps banks build remittancing relationships with potential and existing customers and then sells them the hardware and software that allows them to make profitable proposals.  He told us about a bank from Mississippi that wanted to get into lockbox processing. 

"The bank was dealing with a group of doctors who wanted a loan to build a new medical office center.  Lots of the banks in this city were bidding against each other to get this account. The loan officer at the community bank pitched the bid a little different than all the other banks . 'Yup, he said, we will gladly loan you $4 million to put up the building, but here's what else we can do for you:

* We will automate your remittance system.  All those payments that you are currently handling manually, we can process on our equipment at the bank much more efficiently. 

* If you want a line of credit, we are glad to that for you. ...."

What the bank officer was doing, reports Koster, was putting together an entire portfolio of services to offer this group of doctors.  "The big banks are not that flexible.  They will gladly do the same stuff I was offering to do, but the customer has to ask the appropriate department for each piece separately.  Each group has different protocols.  They have a separate remittance department. You want a remittance solution the bank has to send somebody down from corporate headquarters who handles remittance."

For the community bank it all comes down to two things, says Koster:   "Everybody is trying to reduce non-interest expenses.  And everyone is trying to increase non-interest income.  You can loan money all day long, but that is a very competitive business especially now that firms like the Merrill Lynch's and Charles Schwabs have gotten into the business.  A better way to make money is to to generate non-interest income. The trick is to establish a relationship with this business that allows the bank not only to make a little money off the loan, but also use the loan application process to drum up additional business. "

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