Independent Banker - September 2018 - 51

rarely make sense for a community bank to create and
manage such a function internally.
" Taking advantage of the services that large partners
can provide helps us save on expenses, " says Stephen
Varckette, president and CEO of $410 million-asset
Andover Bank in Andover, Ohio. " For example, we
outsource our fraud program on the debit card side. Some
of the fraud software that is available these days is doing
an amazing job of identifying and preventing fraud, which
saves us quite a bit of money. "
" We don't purchase things we don't need, " says Verus
Bank of Commerce's Nalezny. " However, when we fi nd
that things would cost more in-house, we outsource these.
For example, we outsource compliance. " The bank is also
careful in how it manages vendors. " We carefully negotiate
contracts, such as our health care, and we are very
disciplined when we bid stuff out, " he says.
Cox of Croghan Colonial Bank agrees. " We go through
vendor contracts line by line or hire attorneys to do that, "
she says.
The Middlefi eld Banking Co. also takes a fi ne-toothed
comb to vendor management. " We always make an eff ort
to bid out our needs, but we don't automatically stay with
the same vendors year after year, " says Caldwell. " Recently,
for example, we were able to save about 20 percent on our
D&O insurance premiums by bidding out vendor services. "
Manage utility costs
In the past, most community banks considered
electric, gas and water utility expenses as
simply a necessary cost of doing business.
Today, they still are, but more banks are taking
time to make a serious assessment of energy
conservation and energy cost-management opportunities.
Some banks are embracing solar power, for example. In
fact, for banks looking to make a real dent in expenses,
utility costs may be the fi rst place they should look.
And there are numerous opportunities to consider.
" We keep energy costs down overall by going through an
energy broker, rather than buying power directly from
the local electric utility, " says The Middlefi eld Banking
Co.'s Caldwell. " In addition, as we do renovations to
our facilities, we make sure that the lights are on sensor
systems, so that they do not go on unless and until
someone enters that specifi c area. "
continued on page 52
Time: the other kind
of savings
One bank using technology to create eff iciencies
is $1.7 billion-asset Tompkins VIST Bank in Ithaca,
N.Y. " We knew that our small-business customers
were interested in greater speed,
convenience and eff iciency in
applying for loans, and we wanted
to add that capability, " says Neena
Miller, executive vice president
and chief credit off icer. The bank
selected Mirador's digital lending
platform, which allows it to make
small-business loan decisions in
24 hours or less.
The modular technology lets customers select
the kind of loan they need and plug in their
information. Tompkins VIST can then analyze the
application data faster with good results.
" According to the Cleveland Federal Reserve,
the average small business typically spends about
30 hours applying for a loan, " says Trevor Dryer,
CEO of Portland, Ore.-based Mirador.
" Our process takes them, on average, less than
10 minutes. The application completion rate is
about 60 percent, which is roughly double the
industry average.
" When we surveyed our bank customers,
they told us they save an average of 69 percent
of the time that they normally spent on loan
applications, " says Dryer. " One reason for this is
that we have a rigorous prescreening process that
weeds out the deals that the bank would
never do. " The other reason is that
the automated process reduces
the time required for closing and
compliance, which is digital rather
than manual.
Dryer has found that some
community banks are concerned
that this technology reduces or
eliminates the personal relationship.
However, he says, a platform like this can actually
free up more time for a banker to provide advisory
and other services to small-business customers,
rather than being bogged down with paperwork.
Neena Miller
Trevor Dryer
independentbanker.org Q 51
http://www.independentbanker.org
Independent Banker - September 2018

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