Acquiring Minds

Thanks to a rather aggressive acquisition strategy, Bank of the West and its holding company, BancWest Corporation, have become a $34 billion in assets regional banking concern.

Thanks to a rather aggressive acquisition strategy, Bank of the West and its holding company, BancWest Corporation, have become a $34 billion in assets regional banking concern. The past 10 years have seen the San Francisco-based firm either acquire or merge with nine financial institutions, giving it a total of 300 branches in California, Oregon, New Mexico, Nevada, Washington State and Idaho. Its most recent purchase was one of its largest-United California Bank and its 100 branches in central and southern California.

As executive vice president and director of IT at Bank of the West, Donald Duggan is responsible for ensuring that the bank's technological standards are carried through to its new partners. Duggan recently talked to BS&T editor Paul Doocey about some of the challenges Bank of the West has had to overcome during its acquisition spree. Here are some excerpts from that conversation:

BS&T: How hard was it to integrate United California Bank (UCB) systems with the current technology used at Bank of the West? What were some of the challenges you faced?

DUGGAN: There were a number of issues. One was the short time frame that we were faced with to get this done. We basically had six months to integrate all of the infrastructures and applications both from a legacy and distributed perspective. Another major challenge was blending the two different IT cultures at the banks. We needed to get everyone pulling in the same direction.

BS&T: Did technology help you solve these problems?

DUGGAN: From the systems standpoint, we have done a number of conversions over the last few years, so there really wasn't any new technology that we hadn't used before. We spend a lot of time trying to consolidate and building temporary bridges so the two systems can communicate with each other.

To solve cultural problems you really need to use people skills. You need to break down barriers, get people to talk and focus on getting projects done instead of worrying about what might happen down the road.

BS&T: Do you have a template you follow when it comes to acquiring the IT at a new bank?

DUGGAN: Our strategy is to continue to grow through acquisition. If a bank is of interest to us, we perform an evaluation to determine how it fits into our overall strategy-both geographically and from a product perspective.

BS&T: Do you try to put all the new banks on one platform? Is there one technology you would like all your banks to be on?

DUGGAN: We use our platform as the model. From the legacy side, we will always take whatever systems they are on and convert them to an Alltel platform. In the case of UCB, we did convert them to the Alltel platform.

In the distributed environment, we take a look at what is there and determine whether or not we will continue to use those products. For example, UCB is very strong in commercial banking. So they were much more mature an organization in terms of some of their commercial products and offerings. As a result, we took in quite a number of their commercial banking systems, such as the Metavante product they were using for cash management. We also adopted their Internet-based wire system.

In that respect, the UCB conversion was different than the others we have done because all the other conversions had to pretty much conform to the processes, procedures and systems we already had in place. For this conversion we really had to take a step back and evaluate some of the systems they had and what they could bring to our organization.

BS&T: Your company places a great deal of emphasis on service. Are you doing anything different with branch automation systems?

DUGGAN: We're continuing to use our branch platform system, which is an Alltel system. The UCB branches were on some older technology we actually had at some of our branches a few years ago. From that perspective, we actually brought them up to speed.

BS&T: So what do you take away from the UCB merger?

DUGGAN: The knowledge that our team can pull off this type of conversion in a short time frame. Not only did we deal with the applications and the cultures, but we made some pretty dramatic changes to our infrastructure. We rolled out 100-megabyte pipes to all of our back office locations. We put up a new e-commerce infrastructure. So there were a lot of upgrades we did to our environment at the same time.

The thought process behind that was as we continue to do acquisitions, we want to be in a situation where we do not have to reinvest on a continual basis. We now believe we have an infrastructure in place that is robust enough to carry us to the next two or three acquisitions without any more major investments.