This month’s quest for a GonzoBanker that really stands out brings us to Fort Wayne, Indiana, where Ralph Marcuccilli threatens to put bill pay vendors and the U.S. Postal Service out of business. Under Ralph’s capable direction,
STAR Financial Bank is processing all of its bill payments in-house on software developed internally, and 60% of STAR’s checking customers are plugged in to the Internet and receiving their statements electronically. The bank is saving money and the customers are happy – a match made in Cyber heaven.
Name: Ralph E. Marcuccilli
Official Title:
Chief Information Officer, STAR Financial Bank, $1.6 billion (Fort Wayne, IN)
Unofficial GonzoBanker Title:
Emancipator of Postage Costs and Click Charges
Alma Mater: Indiana University, BS Finance, and Indiana Wesleyan University, MSM-Management
What’s keeping Ralph busy?
Ralph’s Gonzo claim to fame is tied to the work he has done in eBanking, including home grown and delivered electronic bill pay and a wildly successful eStatement project.
In-house Bill Payment – <>STAR had been using Internet banking with an outsourced bill payment service since 1999. Sick of the high monthly fees, escalating “incident fees” at $25 a pop, and poor service from bill pay vendors, Ralph decided about three years ago to develop software that would allow STAR to take bill payment in-house. “I knew that even if I had to pay 39 cents per payment and mail every payment, my cost would go down significantly. Our bill pay application takes customer bill payment requests and converts them to checks. The new application design includes a least cost routing algorithm that considers all of the channels we had available to deliver that payment to the biller, including ACH and other electronic processors. Today we are processing about 50% of our payments electronically.”
- Electronic Adoption of E-statements<> – Ralph convinced his Executive Committee that the bank should give away Internet banking if customers would receive their statements electronically. “Today we have almost 60% of our checking accounts signed up for Internet banking and receiving their statement electronically.” Compare this with Cornerstone’s data that says the average mid-size bank has deployed Internet banking into only 32% of its checking accounts, and high performers are only at 40%! And the median deployment of eStatements at mid-size banks is a whopping 0%.
Yeah… So what’s in it for me?
Besides the obvious cost savings, these projects have had a significant impact on customer service:
In-house Bill Payment:<>
- Customers can view the bill pay checks when they are deposited/cashed by payee; they do not just appear on the statement/Internet banking log as “Electronic Payment.” This allows customers to access paid checks on their own without having to wait on the bank – better service for the customer and lower costs for the bank.
- STAR customers do not lose float on paper items. Items only post after the payee has actually deposited them. Ralph added, “It used to be confusing to customers when they saw an electronic debit on their account for a payee, but the payee says they hadn’t received the payment.”
- Customers get confirmation notice of all bill payments that were processed for the day, letting them know whether the payment was sent electronically or by check.
Electronic Statement Delivery<>:
- Customers receive their statements the morning after they are cut, so customers do not have to wait on printing, stuffing and delivering paper. “Businesses find this especially helpful, so they can reconcile their accounts on the first day of the month.”
- Ralph’s group also wrote a program that, for its electronic customers, converts typically mailed paper notices to e-mail, so most of STAR’s customers get all of their DDA information electronically.
Ralph’s Best Practices in E-Delivery:
The technology involved with this project is a known entity. It ain’t rocket science, but the technology itself is not the real star of this show. The most important facet of Ralph’s electronic delivery strategy is in the post-implementation and customer support work. STAR recognized that if a customer decides to use the electronic delivery channel to correspond with the bank, the bank has to be able to deliver e-customer service that is “at least as good as they would receive if they picked up the phone or came in to one of our branches.” You have to walk the walk, and that’s easier said that done.
STAR invested in the technology to route and answer e-mails, just like GonzoBanker readers might use in their call centers. In fact, the email routing feature that STAR implemented is provided by its ACD provider. “I have never understood why a company would pay a person to answer the phone when the customer calls, but won’t make the same commitment to answering e-mails.” Last month, STAR’s customer service team averaged roughly three minutes to respond to customers’ e-mai messages during call center hours. <>That’s not one bit bad, Bubba.
Ralph highly recommends that banks default to eStatements; don’t give customers an effortless opt-out. “If we give them an easy way to opt-out, like a check-box, we would not be getting the benefit of eliminating the paper.”
Employee education is all-too-often overlooked, but it’s a key to success for Ralph and STAR. STAR requires all employees to receive their statements electronically, which gets them familiar with electronic delivery. STAR also has a periodic employee drawing where the bank gives away a free computer. Employees get one entry in the drawing for each bill payment they make for a given month. “For a $500 investment, we have educated employees and made it much easier for them to sell the benefits of the service.”
If you had to do it all over again, what would you do differently?
One drawback to electronic delivery is handling returned e-mails. According to Ralph, “People change e-mail addresses like they change socks. It can be burdensome trying to convince customers to update e-mail addresses when they change or to empty their inboxes when full.”
A drawback on the bill pay side was the low number of electronic payees. Ralph says the percentage is increasing all the time, but setting up payees to accept payment electronically is a time consuming task. Every payee has different requirements. Also, Ralph hasn’t yet figured out how to present electronic bills from the biller to his customers; but that solution is forthcoming… The testing of any changes in the bill pay application is a monumental task that STAR significantly underestimated. Being a development shop, even a relatively simple one, has its drawbacks. Preventing customer-impacting problems requires extensive testing any time a change in the application is implemented.
What’s Next?
For a project like do-it-yourself bill pay with obvious cost and customer service benefits, Ralph said that there could be revenue opportunities in offering this service to other banks. Watch out, CheckFree…Plus, most of STAR’s bill pay customers have debit cards. Think about if you could run bill payments as debit transactions – even just some of them – and collect interchange revenue from the payees…Ralph is running with that one as we speak.
Who on your team would you like to give credit to for helping make this project successful?
Ralph wants to thank the following people for their hard work on these two projects: Cari Skinner, Internet Banking Manager; Jan Scott, Programming Manager; and Steve Welker, the Programmer who wrote the bill pay application. “Without their diligence in testing all of our changes, we could have easily stumbled on this implementation.”
(WAY) Outside of the office……
Ralph likes to get high after work, like 10,000+ feet high …Ralph’s extracurricular passion is flying his plane, a Piper Cherokee Six. “The plane was built in 1966, the same year I was born. My biggest thrill flying was a trip in my single-engine plane to the Cayman Islands. The trip included about 45 minutes of flight over Cuba. I thought about stopping by to see Fidel, but decided STAR really needed me to come home.”
Favorite movie of all time?
“Catch Me If You Can<>”
What is the most underrated<> rock and roll album of all time?
John Cougar – “Nothin’ Matters and What if it Did”
As the GonzoBanker of the Month, Cornerstone will donate $250 in Ralph’s name to a charity of his choice.
Ralph chose the Northeast Indiana Innovation Center, a non-profit in Fort Wayne, IN. NIIC, according to its Web site, “nurtures technology businesses by developing the venture during start-up, early development, and the growth stages.”
-GB