BITS Improves Bank Efficiency Ratios

 “BITS finds that community banks can significantly reduce their

non interest expense through outsourcing and consolidation”

 About BITS

BITS is an established Managed Service Provider exclusively serving community banks. CEOs of more than 70 banks throughout 10 states have already improved their efficiency ratio by saving millions of dollars outsourcing their “communications services” to BITS. BITS’ application as an enhanced service provider for community banks was approved by the Federal Reserve Bank of Philadelphia and Pennsylvania State Banking Department in February of 2005. BITS is SAS70 certified, overseen by the FFIEC and endorsed by three Bankers Banks and eight state banking associations. BITS generated $9.7 million in sales in 2009 and continues to grow as more senior executives embrace the strategic value of saving money while preparing for the future.

BITS is a subsidiary of the Atlantic Central Bankers Bank (ACBB). ACBB, founded in 1983, is owned by approximately 400 shareholder community banks. BITS was created by the ACBB Board of Directors (all community bank CEOs), who shared the same pragmatic goal – reducing operational costs and mitigating risk through outsourcing and vendor consolidation.  BITS managed “Communications as a Service” has become the community banking industry leader and is compliant with State and Federal Banking IT audit requirements for communication services.  BITS’ mission is the same as ACBB’s – “helping community banks compete more effectively”.

Benefits

·         $500 - $1,000 per branch per month in bottom line savings

·         Simplify vendor management and regulatory compliance through consolidation

·         Control legal risk by combining contracts with the same service provider

·         Benefit from consistent pricing, terms & conditions and SLAs

·         Minimize future capital investments for communications infrastructure

·         Outsource risk and governance responsibility to skilled professionals

·         Highly qualified resources serve your bank without burdening your payroll

·         Mitigate critical employee retention risk

·         Allows you to focus on your core business - banking products and services

How much will you save?

BITS will perform a free, no-obligation Total Cost of Ownership (TCO) study for your community banks on a first-come, first-serve basis. The analysis documents monthly savings comparing the current total cost of ownership for existing communications services to the cost of the BITS solution. In most cases, banks save 20% or more on their combined communications expenses, or $500-$1,000 per branch per month often resulting in six or seven figure savings over the contract term.

Based on their experience in performing TCO studies of existing telecommunications costs for hundreds of community banks, BITS found that 80% of all banks surveyed were paying substantially more for their communication services than larger institutions. Half of the additional expense is a result of inheriting legacy solutions and the other half is because of lack of bargaining power. BITS’ TCO process is extremely simple and requires a very minimal time commitment on CEO/CFOs part.

Outsourcing

Outsourcing is a proven strategy for community banks. Community banks outsource many of their mission critical services, such as: core processing, payroll, financial audits, IT audits, IT support, and voice & data communications. The traditional “jack of all trades” in the IT department can no longer support increasingly complex services, and community banks can simply not afford having dedicated and highly skilled experts managing their IT requirements. BITS will provide these resources allowing you to reduce your payroll expense. In addition, outsourcing helps banks mitigate risk while benefiting from the service providers’ economies of scale and contractual performance requirements. Outsourcing will also allow banks to free up internal resources and increase focus on revenue generating products and services.

The decision to evaluate outsourcing is a strategic decision for the next five years. Some organizations use an external consultant for assessment and support, while others appoint the CEO or CFO the sponsor of the evaluation project. One of the consultant’s major tasks is developing a total cost of operations comparison between external and internal options and relevant headcount costs are omitted in their assessments. This comparison should include internal salaries and the cost of existing communication services versus the outsourced alternative.

Consolidation

There are risks associated with relying on too many vendors. This is especially true for a bank’s communication platform. Traditionally, banks rely on multiple vendors to provide telephony, network management, connectivity (telephone, branch network, Internet, and core & ATM), security, and support. Each vendor represents different contract terms & conditions, trouble resolution processes as well as additional invoices to reconcile and track. In addition, it can be frustrating and time consuming trying to resolve voice and data related outages or issues when relying on multiple service providers. Finger pointing and lack of coordination between vendors is a far too common result when trying to escalate critical problems – meanwhile the bank’s communications systems are “down”, negatively affecting customers and frustrating employees trying to provide great customer service.

BITS can help banks replace multiple existing vendors with a trusted partner and a single contract for everything related to communications. BITS has the ability to outsource vendor management and also the risk associated with the future capital investments and support costs for communication infrastructure. Our contract is fixed over five years and we provide a single point of contact for all support which prevents confusion of who to contact when experiencing a problem.

Contact BITS today!

Christian Ericson

Chief Marketing Officer

Direct: 973 474 1828

Mobile : 973 349 2410

550 Broad St. 7th fl.
Newark , NJ   07102

christian.ericson@bitsnetwork.com