BANK SELECTS M&I FOR CORE PROCESSING

Abstract

City National Bank plans to streamline its core data processing services, increase product offering, and reduce costs by about 25% when it converts its system to M&I Data Services in September 1997.

City National Bank of Beverly Hills Calif., plans to streamline its core data processing services, increase product offering and reduce costs by about 25 percent when it converts its system to M&I Data Services of Milwaukee, in September.

"This more powerful automation means more and better products and more rapid access to in-depth client information for our relationship managers, which adds up to additional benefits for our customers," says Frank Pekny, vice chairman and chief financial officer at City National.

The bank is outsourcing applications, including loan servicing, deposits transactions, account analysis and automatic teller machines to M&I. City National's existing data processing provider is ALLTEL, which used the core processing system developed by City National in the 1970s to support the bank's operating system. The system was sold to Systematics, which was later acquired by ALLTEL. Operating Costs Greatly Reduced The costs associated with running the legacy systems were increasing and ALLTEL's largest CNIS customer, City National shared a large brunt of the costs necessary to modify the ALLTEL system for Year 2000 and increase its functionality, explains John Beale, a consultant at CAST, heading up the conversion for the bank.

As part of the agreement, City National is using M&I's data warehouse system as a repository. M&I's system avoids the third-party fee associated with the bank's in-house data warehouse and charges one fee per transaction, which is more cost effective for the bank when it wants to update its warehouse nightly.

The contract will combine services previously rendered from multiple vendors including ALLTEL and allow the bank to bring some of its processing in-house, says Beale. "We are consolidating activity in the bank or with M&I so there is no duplication of vendor management."

The bank will continue to work with a number of vendors for other system enhancements, including ADP for its cash management system and Electronic Data Systems in Plano, Texas, for its branch automation. The conversion initially was planned in two phases. The first phase was geared to work out quirks in implementing the network-wide system conversion at the 10 newest branches of City National's recent acquisitions. The second phase involved the bank's other 23 branches. The conversion date was later moved back eight weeks to allow for added system testing and to avoid redundant tasks such as multiple training classes.

The bank established a detailed project plan and is working with the line units of business and operations personnel to ensure minimum disruption once the conversion is complete, says Beale. Cost of the M&I contract was not disclosed. (John Beale, CAST, 310/888-6797; Frank Pekny, City National, 310/888-6636.)