Digital Insight Delves into Bank Services
Since its founding in 1995, Camarillo-based Digital Insight has established itself as a provider of home banking and other Internet services to credit unions throughout the country.
It was only at the end of last year, however, when the company partnered with a Dallas-based operation that provides software to banks, that Digital Insight began to make its presence known to banks too.
Digital Insight has strengthened that presence with the acquisition of RJE Internet Services, a developer of Web sites for financial institutions. With the purchase of the Santa Clara-based company, Digital Insight will take over the management of 50 U.S. bank Web sites.
The transfer is expected to be completed within a week. Terms of the transaction were not disclosed.
“Since we felt we had a strong hold on the credit union industry, we wanted to go out and expand into the banking community,” said Katherine Zwers, vice president of operations for Digital Insight, a privately held operation. “We are just acquiring a different piece of the same pie.”
With the acquisition, the Camarillo company will have about 100 home banking clients. The company’s home banking software allows customers of banks, credit unions and thrifts to handle, over the Internet, a range of financial transactions including access to account information, transfer of funds and payment of bills.
In addition to its home banking services, Digital Insight manages 150 active financial institution Web sites and another 50 that are in development.
“Usually, institutions start with Web sites, a pretty conservative inroad into the Internet,” Zwers said. More than half, she said, expand to providing home banking services.
One of Digital Insight’s 50 new clients is the Bank of Ventura, which established a Web site with RJE late last year. Ron Ireland, chief financial officer of Bank of Ventura, said he was pleased with Digital Insight’s acquisition and that it comes at a good time for his employer, which is looking at home banking options.
“What we know of Digital Insight and from what we’ve seen from them, they are a company that can help us get our product into the market,” he said. “We’re hoping to be able to explore what kinds of things they can do for us. Certainly, they are up-and-comers in the industry.”
At the end of June, the Bank of Ventura, formerly First National Bank of Ventura, received government approval to convert from a federally chartered lending institution to a California state bank.
With the dust having settled, Ireland said the bank is ready to look seriously at setting up home banking options for its clients.
“My hopes are that we will be able to deliver customers the information they need and that they can access 24 hours a day from a Web site without having to wait for business hours,” he said. “We should attract new customers with that availability, and from a business standpoint it puts less of a burden on my staff during the day.”
Ireland said that using an outside software development company like Digital Insight allows smaller community banks such as his to keep pace with larger institutions, which are able to run their own in-house Internet operations.
“We can’t afford that--we don’t have the staff or the capital to get up and running ourselves,” he said. “But doing it via the Web, where somebody else is hosting the site, that’s great. It makes more options available to small banks.”
As excited as Ireland is about establishing real-time Internet-based banking, he said the ability to handle financial transactions electronically may not be the be-all and end-all in the industry.
“I think there is some question about that,” he said.
“From the standpoint of the small-business customer who still likes to deal with a person, to form a relationship with a lender, particularly if they are borrowing money for a certain venture, I think they still want the comfort of talking to a person,” he said. “But I do think every bank has to provide some means of having access 24 hours a day.”
