Northstar Benchmarks Against The Rest

Four years ago, a group of investors started Northstar Financial (Bad Axe, Mich.; $200 million in assets). Although not a standard holding company, Northstar Financial manages the infrastructures for three banks owned by the same group of investors.

Brian Hagle, CIO of Northstar Financial, was brought in to design the systems for the entire organization. That's an exciting challenge, he says, since starting a de novo bank means that you can avoid the mistakes of the past.

The first bank started by the venture was Northstar Bank (Bad Axe, Mich.; $90 million in assets). The economy of Bad Axe, a rural area with a population of 36,000 in the entire county, is supported by agriculture, light manufacturing for the auto industry and tourism. As a result, the area has a wide range of customer needs. "We decided to service anybody, from as low-tech to as high-tech as you possibly can go," Hagle says. "We really designed our business plan around this customer-centricity."

Northstar Financial built its own data processing center, running core banking and voice response systems from Jack Henry, Internet banking and cash management systems from S1 Corp. (Atlanta), and back-end storage systems from Treev (Herndon, Va.). "We have eight locations that we're supporting from this data center, and we're tying all of these buildings together with high-speed communications and Voice over IP."

Northstar measures the monthly volume at each of its customer channels and at its service center and benchmarks those figures against national averages of comparable financial institutions. The results show the benefit of the bank's cross-channel, customer-centric strategy. "One in four of our customers will choose Internet banking as a product - and the national average is one in 10," Hagle notes. "For an organization that's $100 million in assets, check volumes would typically range from 10,000 to 12,000 items per month - we're down to around 5,000." To capture those items, Northstar uses three remote capture centers that are linked with high-speed telecom lines to a system from Bisys Document Solutions (Birmingham, Ala.).

Wescom Credit Union (Pasadena) - Collecting and disseminating customer satisfaction data across the firm, for benchmarking and immediate follow-up.

Scotiabank (Toronto) - Driving compensation and sales approaches using an integrated view of its business customers.

Security National Bank (Laurel, Neb.) - Setting pricing strategy and service levels using customer profitability metrics.

Pacific Capital Bancorp (Santa Barbara) - Making data available anywhere it's needed in the firm with minimal effort, using a data virtualization layer.

First Fidelity Bank (Oklahoma City) - Improving customer service in a multi-branch network using cross-channel, integrated CRM.