Paper-Shy Brokerages (1996)

Bank brokerage units are replacing paper with technology to give brokers more time to sell Ten years ago everything was paper based and our ability to answer customer questions or understand a customer's portfolio behaviors was limited, says Joel Calvo, president and chief executive officer of PNC Brokerage Corp., Pittsburgh. Today, we're rapidly becoming paperless, from the prospecting stage all the way through to the completion of the sale. Order entry, sales tracking, and referral handoffs are already paper-free at PNC, thanks to a newly constructed central database, Lotus Notes on every workstation, an intranet, and new software. As banks try to make their brokerage units as sophisticated as the wirehouses of Dean Witter and Merrill Lynch that spend billions on technology, such upgrades are taking place all over the country. PNC, Norwest, Chase, and Central Carolina Bank are four examples. The software options are growing. In addition to market leaders Scherrer Resources, Philadelphia; Advent Software, San Francisco; SunGard Brokerage Systems, Waltham, Mass.; Financial Database Systems, San Diego; and GoldMine Software, Pacific Palisades, Calif.; Invest, Tampa, Fla.; Pershing, Jersey City, N.J.; and Fidelity Investments, Boston; have recently introduced new tools for the brokers at banks they work with. Data warehouse solution PNC, with one of the most technologically advanced U.S. bank brokerage units, recently provided it with a data warehouse. The bank has spent millions on the ongoing project. Calvo's biggest frustration with the system he had before was that separate silos of information, as well as applications, didn't talk to each other. To create a central place where all information related to brokerage could be stored and easily accessed, a dozen programmers spent six months building a Broker Information Depository (BID). They put an Oracle database on a Sun server. Information from the bank's clearing firm (BHC), from its FundDirect service (in which customers buy mutual funds through PNC but receive their statements directly from the fund companies), from the annuity firm PNC works with, from CDA Wiesenberger and Standard & Poor's, and other sources are fed into depository and used to create reports. The depository information is fed into the bank's customer information file and payroll, compliance, marketing, and report writing systems. The PNC brokerage managers are receiving reports from the depository they could never get before; for example, a broker report card that shows each of the 230 Series 7 reps' year-by-year production, year-to-date run rate, product mix, products by revenue, accounts that generated more or less than $10,000, and so on. Recently PNC ran a report listing each broker by the amount of equities they sold and how much they discounted them, and came up with a total by broker. Reps and managers were able to look at their business and see how much they were giving away, Calvo says. Having different types of information stored in one place has allowed the bank to offer a Personal Asset Management Account, for which a customer gets one statement with all checking, credit card, debit card, brokerage, and margin transactions on one statement. (The account is free to investors that have $100,000 with PNC and costs $100 a month to others.) The data warehouse will allow the brokers to provide a greater range of investments, because even if the retail clearing firm doesn't have the capacity to handle a type of asset, the broker can put it through the institutional trading system. Because of the depository system, the information from the two trading systems can be combined to produce one statement. Nuts about Notes Once the information was integrated, the next challenge was to integrate the different applications the brokers use, so they could easily go from one task to another. …