Enterprising Software

Ghan Desai leads an in-house software development division with outside revenue ambitions

By Don Sadler

At most community banks, information technology falls on the expense side of the equation. At Team Capital Bank, a $945 million-asset community bank headquartered in Bethlehem, Pa., the IT department is actually generating extra outside revenue. Since the bank formed an in-house software development division two years ago, it has sold licenses for its in-house ACH origination application, generating new revenue of $250,000.

How that happened starts with Ghan Desai, Team Capital Bank’s chief technology officer, and his crack three-person team of IT specialists. A switch to a new core processing platform in 2011, Desai says, allowed the bank to develop more back-office software internally, including the ACH origination software.

“We soon realized that what we were developing was generic enough [software] that other financial institutions could probably benefit from it as well,” he says.

So Desai and his IT team started talking to other community banks using the same core processing platform from Fiserv Inc., explaining the potential benefits of Team Capital Bank’s software as a compatible fit with their common core system. Based on that initial feedback, the bank launched a new initiative to market and sell specific components of its in-house software to other community banks and credit unions running Fiserv’s core systems.

Since then, Team Capital Bank has created three software applications that it is making available to other institutions. Those applications are ACHManager, a Web-based ACH origination application; FormsManager, which enables bank staff to help customers open new accounts; and OnlineBanking, an application for call center representatives and branch personnel to help customers deal with lockouts and password resets. (See sidebar “What Is BOLTS?” for more details.)

Earlier this year, Team Capital Bank sold 60 licenses for ACH origination application. Farmington Bank, a $1.8 billion-asset community bank in Connecticut, became the first outside bank to go live with the software this past spring, while two other community banks have signed up to use the application.

In addition to three available applications, Team Capital Bank has developed five other software products in house that it plans to make available to other banks using systems from its core processing provider. And the bank is working on developing 10 more applications, including a positive pay module and a manager’s compliance report module.

Before landing in community banking, Desai worked for many years in the telecom industry developing Software as a Service components, and he has purposely assembled a staff at Team Capital Bank with a good mix of sales and technical backgrounds. That combination of sales and technical skills will be important to making the bank’s software development division successful, he says.

Desai stresses that Team Capital Bank’s IT team develops its own internal software from a process standpoint—or in other words, how things should work from end to end. “We want to make sure all the plumbing in the system works, and we can do this since we’re using the products ourselves.”

This approach also gives Desai and his team unique insights that software vendors don’t typically have. For example, pre-funding capabilities were recently added to the ACH software to make more risk-averse banks comfortable with initiating ACH originations. The bank also develops its software to require minimal staff training for users—just a couple of hours for ACHManager, says Desai—and to avoid the need for technical support calls by users.

“We had commercialization in mind from the start” when the bank launched its new core processing platform, Desai says. “We felt that if we built it right, we would be able to market and sell components to other banks—and if nothing else, at least recoup our IT development costs.”

Don Sadler is a freelance writer in Georgia.