BB&T Corp. has adopted InterConnect, a risk and customer relationship management system developed by the credit bureau Equifax Inc., the companies will announce Tuesday.
The Winston-Salem, N.C., banking company uses InterConnect at 1,500 retail locations to help its employees gain access to data, analytics, and a built-in decision-making process while opening card accounts. Equifax, of Atlanta, introduced InterConnect in 2004. BB&T has been phasing it into its cards division since last June.
Brian Short, a senior vice president at BB&T and its bank-card and merchant services risk manager, said InterConnect replaced a "more cumbersome" internal process. The Equifax program provides "a really simple and streamlined process" for cross-selling products and making credit decisions.
"It's a faster process overall," he said. "The system pretty much determines if a person is a good candidate" for other products in the time span of opening an account or applying for a card.
It has "enabled us to make the best risk decisions," Mr. Short said, "and it already has contributed to an increase in the number of services that we sell to our clients."
Mr. Short said he saw little advantage to staying with BB&T's internal risk-assessment systems. "It's less risky for us to implement what I'd consider to be a proven solution," and improving the in-house product "would have been a more significant investment," he said. (He would not disclose the amount of BB&T's initial investment, which will be augmented by "ongoing maintenance to the system" as Equifax updates the system and provides technical support.)
Nor does BB&T see a risk of losing a competitive advantage by using a third-party product, since the banking company can customize the software. "The proprietary solutions that are built around InterConnect allow us to guard a competitive advantage" and "create an innovative design," while "leveraging off InterConnect's capabilities" to make the in-house risk-assessment process easier, Mr. Short said.
Rajib Roy, the president of Equifax's enabling technologies business, said his company's access to "incremental income data," the strength of its technology, and its expertise in risk assessment help InterConnect compete with both in-house and other third-party systems.
Among financial institutions, "the demand for technology is shifting more from account acquisitions to understanding the portfolio," Mr. Roy said. In the current economic environment, those companies are finding more opportunity by asking "how do we understand what to do with the customers that we have, than how do we get more customers."
According to Equifax, which would not disclose the names of other clients, InterConnect is used in many industries but is most popular in the financial services and telecommunications sectors. Gary Harvey, the credit bureau's national account manager for strategic client services and its relationship manager for BB&T, said Equifax has similar relationships with "others in the top 10 or 20 banks."
Pam Pyle, a director of technology services for Equifax, said some customers use InterConnect "just for data gathering," some for "data integration," and "there are also some reporting mechanisms … that will help drive future decisions."
"A lot of customers want to look at different customer data, to include that as part of the decision-making process" when trying to sell new products, or, on the other hand, to use some data as an automatic "exclusionary" factor for some applicants, she said.
Celent LLC, a financial research arm of Marsh & McLennan Cos., conducted a study almost a year after Equifax introduced InterConnect and found that "customers are now able to implement changes to their business rules in real time or in a few days instead of weeks or months" and that "InterConnect enables businesses to deliver a strategy that is consistent enterprisewide and capable of being modified over time."
Walter O'Haire, a senior analyst at Celent, said many lenders are looking for "a robust, dependable and best-solution decisioning engine."
In their eyes, he said, "the consumer couldn't care less what we do on the back end. They just want an instant decision and they want the loan to close."