We’ve Got You Covered

In addition to their daily duties, branch managers at Narberth, Pa.-based Royal Bank America also were responsible for reviewing overdrafts and contacting the affected customers. "That was time-consuming," recalls Jim Duffy, vice president of operations. After reviewing the account history, managers then determined whether to assess an overdraft fee. "I do not think they were all on the same page as far as applying the charges to customers," he says.

According to Duffy, Royal Bank America ($1.3 billion in assets), a division of Royal Bancshares of Pennsylvania, wanted an overdraft-services process that would automate customer contact and provide a consistent customer experience across all branches. Ease of implementation was an important consideration. "We did not have the staff to do an enhanced [implementation] program," Duffy relates. The look and feel of the system was also important. "The notices we were sending to customers were very cold," he says, suggesting that the bank wanted customers to view overdraft notices and coverage as a valuable service rather than a penalty.

Taking It Into Consideration

In 2003, the bank began searching for new technology and considered three vendors: Louisville, Ky.-based BSG Financial, Pinnacle Financial Strategies (Houston) and Stratis Technologies (Louisville). To learn about each product's rollout, Duffy talked to the vendors' clients, including Royal Bank America's Royal Asian Bank division, which already used BSG Financial's technology and reported positive results.

Based partly on these recommendations, the bank decided in February 2005 to use BSG Financial's OverdraftHonor and OverdraftHonor for Business Accounts solutions. Other banks "could not say enough about the ease of implementation, and the financial return was very positive," says Duffy.

The OverdraftHonor program establishes an overdraft limit for consumers and businesses. Customers are qualified for the program based upon specific criteria such as account-open date and historical activity. The BSG Financial software processes data from the bank's systems daily to identify customers who are overdrawn or are eligible for overdraft credit. All notices, including those for customers who are not in the program, are generated from the BSG Financial system based on the extracted data. Customers can be contacted via mail, e-mail or phone.

Royal Bank America implemented the applications in July 2005, buying a Dell (Round Rock, Texas) Windows NT server to host the new software. BSG Financial took two days to install the software on the server, modify existing forms and notices to conform to Royal Bank America, and assist in establishing the interface and daily processing procedures. The vendor also conducted a training program for all bank personnel. Royal Bank America modified its "current applications system to produce output reports that could be processed through BSG Financial's program," Duffy says. "They let us tweak the solution to work better for us," he says of BSG Financial.

The bank uses the new systems with both retail and commercial customers. The result: Between August and December, the bank increased its overdraft fee income by 64 percent. And having 90 percent of the overdraft-management process automated frees up more of branch managers' time. "Now they can make more outside sales calls and spend more time with customers who come into the branch," says Marc Sanders, the bank's director of marketing. "It's an opportunity to generate new business." And customers "really think of it as a service," he adds.* --Judy Ward

Overdraft Management

**Institution: Royal Bank America (Narberth, Pa.).

***Assets: $1.3 billion.

***Business Challenge: Increase overdraft-management process efficiency.

***Solution: BSG Financial's (Louisville, Ky.) OverdraftHonor and OverdraftHonor for Business Accounts.