Brian Stone 0:03
Hello, and welcome to The Buzz, a bank automation news podcast. My name is Brian stone, and I am the Associate Editor at Bank automation news. In this edition I am joined by Jerry Kraft CEO of courser, he discussed how payment card solutions can be beneficial for community banks coarser recently attaining visa ready certification and the integration process for core service products when partnering with a financial institution.Jerry Craft 0:31
Our system is fully web services. It is fully API’s, both internal and external API’s. And that’s what gives us the ability and the flexibility to handle these accounts. From that perspective, we do run private cloud, where we own the servers, we own the software, we use two data centers, one in Atlanta here where the headquarters is located. And then out of Chicago is the second data center that we have, we actually have a third data center as well, because we keep the production data centers separate the corporate data center, as we call it does all of our email, all of our development, the things that are changing, and that was kind of a best in class services. And with the API’s, we started from scratch, took us a couple years to get certified to be able to handle Visa and MasterCard accounts. But that is the backbone. And probably the most important thing is we’ve got a team of systems people. It’s not me. But it’s the team that has worked with us for an average of about 20 years in building these systems. And a couple of us go back a couple of decades longer than that, when we built systems in the mid 80s. Around credit cards. So our team is highly immersed in in it’s the issuing side of credit cards.

Unknown Speaker 2:08
We’re working on completing the full accounting system of record, and authorizations for all products. We currently have that for prepaid and debit a boat, we’re working on that for credit. And probably the first step there will be all commercial or charge accounts that pay in full 30 Day account.

Unknown Speaker 2:30
Are there any recently announced partnerships that you’d like to go into further detail on or anything along those lines. And we’ve had several recently in our core credit program for the community financial institutions, I think studio Bay Coast, but we have four or five that we’ve added this year and a number of additional banks that we’re talking to. And it’s that concept that probably makes the most sense, because it’s one that allows community financial institutions to participate and own 100% of the loans and the revenue from the credit card business. And that until our program has really not been available in a half century of the credit card business for banks. And that’s where they’re basically making the underwriting decisions and own it. And we’re providing not only the processing and the technology, but also give them templates, and have a partner bank that provides the legal to compliance and we do the marketing the products. It’s a full suite allows them to get in business in four to five months. I wanted to talk to you a little bit about a couple of recent developments that core serve as you recently launched a credit card program and received FISA regni certification. What are sort of just the long term goals around these two developments? And what are you kind of hoping to accomplish on the visa Ready program that is right now around the prepaid and the debit programs where we work with banks, as well as fintechs. And that means that we’re certified with visa to be able to handle their transactions. And as you know, handling Visa cards are MasterCards with the PCI compliance and the security around that is not taken lightly. And that means that we’re well equipped to handle that one. Please. The recent one was studio bank out of Nashville. That is a relatively new bank. It has $800 million in assets I think 83 employees and there are unique most of our clients banks.

Unknown Speaker 5:00
The business we’re getting it from businesses, the fastest growing is the commercial, and the treasury management business. And that’s kind of their sweet spot are the businesses. While Studio does offer the consumer accounts, and one of the products they selected that we have pre set up was our prime plus 2.99, which is an APR of about, I think, 9.24% today, which is a great rate. But they’re not primarily made up of consumers. It’s more of the Small Business and the commercial businesses that they have. And they had a need for 24 hour treasury management services. And of course, our systems allows that to function and allows them to service their accounts at all times of the day. Most people when they think of payments, think of the merchant or the acquiring or the ISO, the independent sales organization. That’s half of the transaction. But the other half is a purchase, we help the card holders or the account holders that doesn’t have to be a card, make those purchases, which it’s 5050 to the purchase or the sale come first. They came at the same time. It’s a little bit of a two part type of question, but I just wanted to get your take on this. What does the integration process look like when you guys partner with a bank? And how long does that integration process typically take, they are putting in a new product in their bank through a healthcare organization. And it does not require the banks to have full time employees. But there are part time resources needed. And when we kick it off, we have four work streams. We have a work stream for credit underwriting, where we will give them not only the credit policy of 24 laws, regulations, but also the credit strategies of debt to income FICO scores, and we use their relationship data in enhancing that score to make loans. So credit is one. Another is the marketing side of handling it. It’s the products, we have like 15 products, I’m not sure any bank offers all, but they can select from those that they choose. Then we’ve got the general ledger and settlement. And every day, they’re going to receive all the purchases that were made and studios case, it’s visa that come through the visa system every night. And then there’s an operations piece, it’s getting those plastics out there. And it’s getting everything set up in the system. And we run those concurrent. And it takes we can do that readily in four months. What recently has lengthened that time is just the supply chain and getting plastics and chips. There’s been some delay, but more recently, we’re seeing an improvement in that. But it is a process that goes across that bank, but we make it easy for them with the written procedures, the written documentation and the templates they need to make this work.

Unknown Speaker 8:20
All right. I actually just had one final follow up question. You just mentioned products. Could you detail maybe some of the most popular products that core serve offers later that are, I guess, most chosen by these banks?

Unknown Speaker 8:37
And there’s a dual answer here. What is most chosen in terms of accounts is a little different of what’s most chosen in terms of purchases and sales volume. And, for example, last month, 80% of our loans came from businesses that small medium businesses and commercial businesses on the 30 day category, and 87% of the sales volume came that way. But if you go to look at the number of accounts, it’s much more evenly spread between consumers and businesses. And the businesses on the commercial product are not only the P card, it’s the virtual cards, just the ghost cards. It’s the fleet cards that are driving a lot of this business on small and medium businesses. Each of those commercial and small and medium businesses can have their own business administrator or wants they set up a line of credit for it. And I think our largest line of credit is $12 million that one of our clients has set up. They within that limit can add new accounts. You have alerts and controls and manage their accounts locally.

Unknown Speaker 9:56
And on the consumer products that we have

Unknown Speaker 10:00
We also have wealth management, we have a number of banks that actually have a special wealth management for private equity. And I’m sorry, not private equity for private clients, the wealth management area where they have products. And we have a bank that is coming live right now that has not been announced yet. That really just handles private banking clients. And their the number of accounts are not as large as the volume per account. Because these are people that have high spending.

Unknown Speaker 10:35
I think I mentioned that the banks have never had this opportunity. And I can say that because the first 38 years of my career, I was in those big banks providing what’s called agent bank services. And that was always a sweet spot. It wasn’t the highest volume. But it was very good in terms of profits, and generating that. And so we set up a system and built it. And I think the 21st century technology that we have into Web Services allowed us to do this much easier than it would have been in olden times. And olden times is two decades ago, if you will. And it is truly unique for banks. And our average bank in the first half of this year, had a pre tax, what are called cash basis ROA for each dollar of loans of about 7.6 cents, so it’s highly profitable. And two thirds of that revenue, Brian is coming from interchange, that is the fees that are driven by those purchases, and then the commercial card if they have to pay it off every month and you’re turning alone 12 times. So that’s the impact that these banks get, and it allows them to be competitive, with the largest banks, offering the most sophisticated payment services in their local markets. That is the benefit that our banks are receiving.

Unknown Speaker 12:13
You’ve been listening to the buzz, a bank automation news podcast. Please follow us on Twitter and LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us at Bank automation news.com For more automation news

Brian Stone 0:03
Hello, and welcome to The Buzz, a bank automation news podcast. My name is Brian stone, and I am the Associate Editor at Bank automation news. In this edition I am joined by Jerry Kraft CEO of courser, he discussed how payment card solutions can be beneficial for community banks coarser recently attaining visa ready certification and the integration process for core service products when partnering with a financial institution.Jerry Craft 0:31
Our system is fully web services. It is fully API’s, both internal and external API’s. And that’s what gives us the ability and the flexibility to handle these accounts. From that perspective, we do run private cloud, where we own the servers, we own the software, we use two data centers, one in Atlanta here where the headquarters is located. And then out of Chicago is the second data center that we have, we actually have a third data center as well, because we keep the production data centers separate the corporate data center, as we call it does all of our email, all of our development, the things that are changing, and that was kind of a best in class services. And with the API’s, we started from scratch, took us a couple years to get certified to be able to handle Visa and MasterCard accounts. But that is the backbone. And probably the most important thing is we’ve got a team of systems people. It’s not me. But it’s the team that has worked with us for an average of about 20 years in building these systems. And a couple of us go back a couple of decades longer than that, when we built systems in the mid 80s. Around credit cards. So our team is highly immersed in in it’s the issuing side of credit cards.

Unknown Speaker 2:08
We’re working on completing the full accounting system of record, and authorizations for all products. We currently have that for prepaid and debit a boat, we’re working on that for credit. And probably the first step there will be all commercial or charge accounts that pay in full 30 Day account.

Unknown Speaker 2:30
Are there any recently announced partnerships that you’d like to go into further detail on or anything along those lines. And we’ve had several recently in our core credit program for the community financial institutions, I think studio Bay Coast, but we have four or five that we’ve added this year and a number of additional banks that we’re talking to. And it’s that concept that probably makes the most sense, because it’s one that allows community financial institutions to participate and own 100% of the loans and the revenue from the credit card business. And that until our program has really not been available in a half century of the credit card business for banks. And that’s where they’re basically making the underwriting decisions and own it. And we’re providing not only the processing and the technology, but also give them templates, and have a partner bank that provides the legal to compliance and we do the marketing the products. It’s a full suite allows them to get in business in four to five months. I wanted to talk to you a little bit about a couple of recent developments that core serve as you recently launched a credit card program and received FISA regni certification. What are sort of just the long term goals around these two developments? And what are you kind of hoping to accomplish on the visa Ready program that is right now around the prepaid and the debit programs where we work with banks, as well as fintechs. And that means that we’re certified with visa to be able to handle their transactions. And as you know, handling Visa cards are MasterCards with the PCI compliance and the security around that is not taken lightly. And that means that we’re well equipped to handle that one. Please. The recent one was studio bank out of Nashville. That is a relatively new bank. It has $800 million in assets I think 83 employees and there are unique most of our clients banks.

Unknown Speaker 5:00
The business we’re getting it from businesses, the fastest growing is the commercial, and the treasury management business. And that’s kind of their sweet spot are the businesses. While Studio does offer the consumer accounts, and one of the products they selected that we have pre set up was our prime plus 2.99, which is an APR of about, I think, 9.24% today, which is a great rate. But they’re not primarily made up of consumers. It’s more of the Small Business and the commercial businesses that they have. And they had a need for 24 hour treasury management services. And of course, our systems allows that to function and allows them to service their accounts at all times of the day. Most people when they think of payments, think of the merchant or the acquiring or the ISO, the independent sales organization. That’s half of the transaction. But the other half is a purchase, we help the card holders or the account holders that doesn’t have to be a card, make those purchases, which it’s 5050 to the purchase or the sale come first. They came at the same time. It’s a little bit of a two part type of question, but I just wanted to get your take on this. What does the integration process look like when you guys partner with a bank? And how long does that integration process typically take, they are putting in a new product in their bank through a healthcare organization. And it does not require the banks to have full time employees. But there are part time resources needed. And when we kick it off, we have four work streams. We have a work stream for credit underwriting, where we will give them not only the credit policy of 24 laws, regulations, but also the credit strategies of debt to income FICO scores, and we use their relationship data in enhancing that score to make loans. So credit is one. Another is the marketing side of handling it. It’s the products, we have like 15 products, I’m not sure any bank offers all, but they can select from those that they choose. Then we’ve got the general ledger and settlement. And every day, they’re going to receive all the purchases that were made and studios case, it’s visa that come through the visa system every night. And then there’s an operations piece, it’s getting those plastics out there. And it’s getting everything set up in the system. And we run those concurrent. And it takes we can do that readily in four months. What recently has lengthened that time is just the supply chain and getting plastics and chips. There’s been some delay, but more recently, we’re seeing an improvement in that. But it is a process that goes across that bank, but we make it easy for them with the written procedures, the written documentation and the templates they need to make this work.

Unknown Speaker 8:20
All right. I actually just had one final follow up question. You just mentioned products. Could you detail maybe some of the most popular products that core serve offers later that are, I guess, most chosen by these banks?

Unknown Speaker 8:37
And there’s a dual answer here. What is most chosen in terms of accounts is a little different of what’s most chosen in terms of purchases and sales volume. And, for example, last month, 80% of our loans came from businesses that small medium businesses and commercial businesses on the 30 day category, and 87% of the sales volume came that way. But if you go to look at the number of accounts, it’s much more evenly spread between consumers and businesses. And the businesses on the commercial product are not only the P card, it’s the virtual cards, just the ghost cards. It’s the fleet cards that are driving a lot of this business on small and medium businesses. Each of those commercial and small and medium businesses can have their own business administrator or wants they set up a line of credit for it. And I think our largest line of credit is $12 million that one of our clients has set up. They within that limit can add new accounts. You have alerts and controls and manage their accounts locally.

Unknown Speaker 9:56
And on the consumer products that we have

Unknown Speaker 10:00
We also have wealth management, we have a number of banks that actually have a special wealth management for private equity. And I’m sorry, not private equity for private clients, the wealth management area where they have products. And we have a bank that is coming live right now that has not been announced yet. That really just handles private banking clients. And their the number of accounts are not as large as the volume per account. Because these are people that have high spending.

Unknown Speaker 10:35
I think I mentioned that the banks have never had this opportunity. And I can say that because the first 38 years of my career, I was in those big banks providing what’s called agent bank services. And that was always a sweet spot. It wasn’t the highest volume. But it was very good in terms of profits, and generating that. And so we set up a system and built it. And I think the 21st century technology that we have into Web Services allowed us to do this much easier than it would have been in olden times. And olden times is two decades ago, if you will. And it is truly unique for banks. And our average bank in the first half of this year, had a pre tax, what are called cash basis ROA for each dollar of loans of about 7.6 cents, so it’s highly profitable. And two thirds of that revenue, Brian is coming from interchange, that is the fees that are driven by those purchases, and then the commercial card if they have to pay it off every month and you’re turning alone 12 times. So that’s the impact that these banks get, and it allows them to be competitive, with the largest banks, offering the most sophisticated payment services in their local markets. That is the benefit that our banks are receiving.

Unknown Speaker 12:13
You’ve been listening to the buzz, a bank automation news podcast. Please follow us on Twitter and LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time, and be sure to visit us at Bank automation news.com For more automation news