From the American Bankers Association, this is the ABA Banking Journal podcast. Welcome back. I'm Evan Sparks. Today's episode is presented by Alkami and I'm delighted to be joined by Kate McGraw. Kate is Senior Vice President and CIO at Webster Five Cent Savings Bank in central Massachusetts, and she is also a member of ABA's core platforms committee.
In my opportunities to sit in on those committee meetings, always enjoy hearing Kate's perspective on a variety of issues related to bank technology. So Kate, I'm delighted to have you on the show today. Thank you for joining me.
Thank you so much, Evan. Happy to be here.
So I, so I know we have gone through the core platforms committee has done all kinds of work on a variety of issues, you know, evaluating new cores, mapping the marketplace and the core. And the committee has done also done a lot of work on helping banks with conversions and tackling and making sure that if you decide to do a conversion, if that's what you decide as a bank is, is the best thing for your bank to find a new core and convert.
You know that that you have the resources and tools you need to to go through that. And in that in that light, if you could if you could start by with just telling me a little more about Webster 5 and who you serve, I'd love to learn a little bit more about that.
Sure. So Webster 5 is a true community bank. We are currently headquartered in Auburn, Mass. But Webster does come from the actual physical location of Webster. Webster Dudley Oxford area in central Massachusetts. We serve the greater Worcester County. We primarily have shifted our mix of customer base a little bit more toward commercial, but we serve many households around the area. We're 1. 3 billion in total assets. So we're a good mix. We're seven total branches.
We're, you know, always looking at opportunities to gain new households gain new commercial business We primarily focus on serving those local communities. So we're not doing a ton of lending outside of footprint no national programs neither lending or deposits currently the bank has been 150 years Which is pretty impressive at this point and we are a mutual bank which is you know, kind of a rare breed these days.
So we're, we're truly in touch with our roots, really all about serving our communities and our employees. But we are in a phase of innovating ourselves so that we can remain independent in this next kind of phase of our existence. You know, community banking is tough, especially at 1 billion assets are under. And so we really are focused on what are the things that are gonna make us competitive in our market.
Yeah, no, that's it is absolutely a challenge and for for community banks these days. So What how did y'all go about kind of evaluating? What you needed to do? How did you go about evaluating what you needed as a bank in order to stay competitive and make sure that you are offering the products and services that your customers needed and at the efficiency level that you're you know, That is required to run the bank?
For community banking, I think the technology partners you choose are incredibly important, you know, first from a cost and sense perspective. But secondarily, you need service. I don't have it. I can't hire a team of developers. I don't have on staff I T resources. So we need to have partnerships that are available to us and that are ready to serve us quickly and provide us capabilities. In a meaningful way and in a short period of time be able to deliver on projects, et cetera.
So really, it all starts with strategic planning at my bank. So I think we do a really good job of as a senior management group and our board talking about who we are today, where we're going next, where we'd love to be. And so we kind of take three year, three to five year horizons and plan that out. And then I kind of do a technology roadmap on an annual basis. And we call that kind of more tactical planning, but a big part of a big component of those plans is either initiatives.
Or investments that are driven by some piece of technology, right? Whether that's a small business LOS or something larger, like it's really time to shift our core so that we can be more aggressive in the FinTech space. Offer a more current digital banking application, you know, launch a full scale treasury management suite. Those are all things that we've been talking about since I joined the bank almost four years ago.
And so about a year into my tenure at Webster Five, we had done some strategic planning and it became apparent that the vendor that we had was just not going to meet our needs again. Didn't mean anything negative about the vendor necessarily, but it just where we were going. We didn't feel like where they were headed and their, their strategy really aligned with ours. And so we decided to really just go out to bid and do a full RFP process.
We did go the route of hiring a consultant to assist us in the RFP process, mostly from a place of enterprise project management. If you're doing a full RFP and full core demos and really exploring the various models of cores that are out there today, having someone kind of handle the administrative legwork is a significant part of the task. So we were happy to have brought on Genesys Technologies to help us with that.
And then we, we really went from there taking a deep dive on the various models, of course, and where we, you know, where we wanted to go with that. We also had been in our core for 25 years, which I think is a significant amount of time. So a lot of the folks at the bank really we had a whole groups of people that hadn't had a ton of experience on a different core. So it was a really a learning journey.
And something I talk about a lot in our core committee meetings is that business process is as much a part of these transformations as the technology. So the technology can kind of feel like the sexy part. But what gets lost in the sauce sometimes is the business process transformation. So we really tried to do some business analysis work up front to prepare for what that journey would look like if we had decided to do it.
What were some of the capabilities that you were like, we don't have right now, we know we're going to need it, or we can't, we don't have it right now at the at the price or accessibility that we're going to need it.
So we were really looking for a couple of things. One of it, I mentioned in kind of my synopsis of the bank itself is that we are leaning into more commercial and small business. And obviously doesn't mean we're abandoning the household, but we needed platforms that were really capable of handling more mature, larger size commercial customers and or nonprofits. And so when I say commercial, I don't just mean businesses, but we also, you know, wanted to lean into our nonprofit communities.
And so large batch ACH and wire, some more complex fraud monitoring tools. We needed a a larger online banking platform. We did end up choosing Jack Henry and their Banno platform for small business and consumer. And then we also did opt to go with their full treasury management platform, which has been really powerful for our commercial clients. They're on a full scale tool now, and it allows us to go up market and sell too, which is a nice feature.
So really larger treasury management and commercial support was one of the big features. The other thing that we were looking for was as much as I am very attracted to headless core and cloud based cores, There weren't a lot out there yet that could serve a bank our size in terms of the support we need on the backend. And so we really were looking for a vendor that was strategizing on how they were going to get there.
And it, so it didn't mean, mean they needed to be there in time for our conversion, but I wanted to make sure that as they made investments that we had our roadmaps aligned and our strategies were similar, and so I felt really. Excited about Jack Henry's kind of what they were calling project origin. It really aligned with our overall strategy and where we wanted to go. And then third was what can be kind of a tough subject for all bankers is really integrations and API.
We talked a lot about, you know, we want to be able to bring best of breed when we want to, so I want to choose the vendors I want. And that comes with being able to integrate easily and quickly. And for us, that was a big, a big must have in terms of the technology stack.
If we were going to convert whoever we went to, we wanted to be able to make sure that if a year, two years, three years, if there was something in the market, we really wanted, we knew we were going to be able to plug it in and play and get it up off the ground quickly. And we've already done that. And so that's been a real relief for my team. We've really enjoyed kind of what used to feel like really long projects waiting for vendors to deliver code.
These API connections are happening much more quickly and we're getting things into live environments and half the time, if not faster than we were on our previous four.
Oh, that's exciting. All right. I'm going to take a quick moment here and thank our sponsor. This episode is presented by Alkami. Your account holders deserve the best and Alkami is committed to empowering financial institutions with a single platform for marketing and retail and commercial banking solutions. Accelerate your growth with financial services, marketing automation, transaction data cleansing, and artificial intelligence with digital banking. Visit Alkami. com to learn more.
That's A L K A M I. com to learn more. And thanks again to Alkami for sponsoring this episode. So, back to the conversation with Kate. You've been on the previous core for 25 years. What, what was the most difficult part of doing the transaction or to the transition? And what was easier that you maybe expected was going to be harder?
So the most difficult part of the, the core conversion, I would say was those cash management and commercial customers the ACH positive pay and online banking. We just, I knew it would be the riskiest part of the conversion is getting everyone back online within, you know, a day or so. And for those cash management customers, we did struggle with their batches, their wire files getting their positive pay set back up. Some of those things just don't convert. And they do need to be reestablished.
And it was, it was a bit of a painful process for our customers and ourselves that first few weeks really felt like there was a lot of small fires to put out on a per customer basis. Some of it has to do with the platform we went to you know, initially before the full treasury management platform was ready, But some of it also has to do with the fact that it's just they're, they're highly sensitive customers, right?
We've got customers that are just a little more risk averse and customers that are more change averse. And commercial clients tend to be that way. Office managers do things a certain way for a very long period of time. It's really tough to change that. So we had to really teach a whole new customer base, how to use these applications. And I wish we had invested in some more training materials for customers.
And Really, you know, I think part of it though, is you're going to have pain points and that just was one of them there, it's just a sensitive base. And so that was our, that was our toughest, I would say. Challenge in the first couple weeks, something that went better than I expected it to be would, I think, be the overall state of our data. So we didn't have a formalized data cleansing or data governance program. We had been 25 years on one core with not a lot of purging.
We started doing some of that about a year out from the conversion when we really decided, you know, contract was signed and we were going to make the change. We started getting into that, but you know, that's really something that should be. It's an it should be going on all the time at every bank. It's a it's a hygiene. And so I was fairly nervous about some of the roles and titling from older accounts.
But, you know, there's was definitely some cleanup, but it wasn't as bad as I thought it was going to be. And I would say that the, the vendor that we were going to, I think does a sufficient amount of testing and mock. And I think we participated in that and treated it like it was the real deal. And I, I'm glad we did because we learned a lot each time.
Any other, any other advice that you share with with other bankers who are considering the considering going through a conversion and wanting to plan ahead or be aware of what they can expect going through the process.
I would definitely say that the focus needs to be on Making sure that you are converting clean data. So as soon as you if you don't have a regular practice of cleansing purging data retention, reviewing roles and titles and QC, we need to make sure that, you know, that's being done up front. And if not, kind of undertake a small preemptive project to go through all of that. I think beforehand.
I think secondarily really finding a good group of middle management from all lines of business across the bank to be part of the conversion team and represent the conversion and hopefully kind of be those change agents across the bank because quite frankly, it is a lot of work and it does require people to do their day job and do project work and Some people are really enthused by that and others aren't, but having a positive mental attitude or driving a positive attitude
across the bank, I think is really the difference between things going well, and things feeling unbearable when you're in the midst of things not going so well. So I think those are probably the two most important.
Well, Kate, thank you so much for taking some time to talk to me about your core conversion at Webster Five. I know for, for those who are listening, if you are interested in learning more about core conversions, you can go to aba. com slash core where the core platforms committee has resources on conversions. And Kate is also going to be joining Greg Peterson and Brian Bruns and Kim Kirk, who are also members of the core committee.
On a panel at the ABA annual convention coming up next month, October in New York city on successful core platform conversion. So if you want to, if this piqued your interest and you want to learn more, check out that panel and the checkout the annual convention at aba. com slash annual. Kate, looking forward to seeing you in New York city.
Thanks Evan. I'll see you then.
All right. For our listeners, thank you for listening. Thanks to Alkami for sponsoring this episode. We will be back with you again very soon.