Facing Challenges of Massive Acquisition, an AFS Customer Uses Web-based AFSCommerce® and Retains 98% of Acquired Client Base

When one of AFS' bank clients recently acquired another bank, it completed the largest branch acquisition in banking history and was faced with a monumental challenge. Historically a savings bank, they were purchasing over $8 billion commercial lending portfolio and wanted to prepare for the complexity of the sophisticated lending operation needed for the acquired portfolio. Turning to AFS for help, the Bank found a remedy in AFSCommerce, AFS' Web-based lending software solution that would offer them maximum flexibility in loan structuring and servicing, greater control over finances, and accommodation of more complex lending processes all on a completely outsourced basis.

The Bank specializes in commercial loans, commercial real estate loans, asset-based loans and dealer floor plan securitizations. This most recent acquisition quadrupled their commercial loan holdings, presenting them with unique challenges. Not only did they need a robust, comprehensive and integrated solution they needed it in 90 days.

AFSCommerce fit the bill.

AFSCommerce Offers Bank Competitive Advantage in 90 Days

"This was a massive acquisition and we decided we wanted to change our business model regarding commercial loans," said the bank's executive vice president and chief technology officer.

The bank decided to implement AFSCommerce mainly because of its Web-based functionality and outsourcing. "That is attractive to me for simple reasons," said the vice president. "web-based implementation has ease of use and relatively low cost in terms of development." By outsourcing all of its back office work, the bank will be able to focus on "those aspects of the value-added chain that are appropriate for us" such as "customer-facing functions and risk management."

Leading-Edge Technology with Significantly Smaller Up-front Investment

AFSCommerce offers the bank a value-based pricing arrangement, whereby the hefty up-front license fee and high annual maintenance fee is eliminated in favor of a fixed price for software maintenance and basic operations services in the sense of transaction processing with an outsourced approach. AFSCommerce promises access to the same feature-rich lending technology as a larger organization, with a smaller up-front investment. AFS manages the hardware needed to run the system and all software upgrades and ancillary maintenance issues in its data center. Customers can switch on the modules that fit their current business requirements and migrate to a higher degree of sophistication and functionality as their needs evolve.

AFSCommerce Fully Integrates Lending Processes

AFSCommerce performs all fees and calculations banks are entitled to through loan agreements, and enables the bank to structure deals to get the most revenue via flexible loan packaging. The system addresses integrated front-end origination to back-end decision support via a browser, thus eliminating data entry problems, validation steps, exception tracking and reconciliation problems.

Through its single-threaded, browser-based approach, AFS is able to make information available throughout the organization to manage credit quality effectively. AFSCommerce Web-based functionality enables the bank's customers to view their accounts online and perform basic transactions such as payments over the Internet.

Advanced automation and workflow management processes guarantee the shortest possible time from application to approval. The integration of credit scoring, statement spreading, and document preparation further ensure that the customer enjoys a more consistent and accurate experience at closing. The availability of management information throughout the organization provides the ability to manage customer relationships to assure retention. Customer satisfaction and response times are significantly improved.

AFS also helped the bank build a customized dealer floor plan securitization accounting system to accommodate a $700-million dealer floor plan securitization deal. This enormous challenge included the accounting of 30,000 cars on dealer lots with daily dealer floor plan inventory movements.

The Bank Benefits from An Extraordinarily Low Rate of Defection

AFSCommerce has brought numerous benefits to bank including streamlined operations, reduced costs, increased revenue, increased customer satisfaction and competitive advantage. In fact, since installing the solution, the bank has benefited from an extraordinary customer defection rate of less than 2%, a phenomenal accomplishment for an acquisition of this size.