ON THE MOVE: Bancsource Inc. President and CEO Mychal Kempt leads the $51 million banking equipment service provider into a new south Springfield headquarters.
Business Spotlight: Culture Change
Change can be a good thing, and Bancsource Inc. should know. In its 36-year history, the company has made its share of adjustments.
Established in 1980 in Republic as Techniflex Inc., the company acquired Henderson, Ky.-based Bancsource in 2006 and kept the name. Cleveland private equity firm CapitalWorks LLC bought Bancsource last year for an undisclosed sum, and the office moved in February to 15,000 square feet at 3130 S. Delaware Ave., formerly American Family Insurance.
Bancsource employs 350 between a Chicago office, 60 employees in Springfield and remote staff nationwide.
President and CEO Mychal Kempt, too, is a change. He comes from a 21-year career with Diebold Inc., mostly recently as head of North American sales and service, which made up half of the company’s $3 billion in 2014 revenue.
Whereas Diebold manufactures and services their own products, Kempt says Bancsource’s niche is repair and maintenance of banking equipment from other vendors for about 1,500 financial institutions.
“They make their own and service their own,” Kempt says of Diebold. “We don’t make anyone’s, but we service everyone’s.”
The service work makes up 75 percent of Bancsource’s $51 million annual revenue. The remainder comes from selling automated teller machines, cash recyclers and interactive teller machines for Irving, Texas, technology partner Nautilus Hyosung America Inc.
On track to meet revenue growth of 5-10 percent this year, Kempt says increasing its local presence is key.
“We don’t have near the penetration in the greater Springfield area that I would have expected us to have,” Kempt says, pointing to a three-year goal of raising local employment by 25 percent. “We feel more like a national company that is based in Springfield.”
One revenue stream aiding growth is branch transformation. Driven by cost efficiency, Kempt says banks are pressured to automate more transactions through ITMs and advance technologies.
Christy Wild, assistant vice president at Claremore, Okla.-based RCB Bank, says the $2.4 billion community bank is testing one of Bancsource’s ITMs.
“Machines don’t call in sick and they don’t need vacation,” Wild says. “We can still be personal with our customers, but this is less expensive.”
RCB Bank already hires Bancsource for equipment maintenance at 41 branches in Oklahoma and Arkansas. Inside of a retail center, like Wal-Mart, Wild says RCB Bank employees are cross-trained in customer service and can do everything but issue loans.
Kempt says the idea for banks is to transform tellers into sellers and drive revenue.
“It’s all about wallet share: What more can you get from the customer?” adds Bancsource Regional Vice President Brent Burleson, a remote employee based in Indianapolis. “If I know you have a home loan with us, I’m going to talk to you about auto.”
For Bancsource, the ideal financial customers have $500 million-$20 billion in assets and a geographic footprint of six-10 states.
But there’s wiggle room in the scale. Grove, Okla.-based Grand Savings Bank, for example, had assets of $324 million last year, according to FDIC filings. But it also has a 15-year relationship with Bancsource. Vice President of IT and Operations Leah Jo Morgan says the bank grew its relationship with Bancsource from software to equipment maintenance to recently purchasing 10 teller machines through the company.
“They came in with a better price, but they have an exceptional maintenance staff,” Morgan says. “The product knowledge is extensive, so that eliminates a lot of headaches on our end.”
Bancsource’s changes aren’t just occurring inside banks. Kempt came on board in July, and Human Resources Director Julie Bush was hired last month, coming from Kansas City-based ProEnergy Services LLC. The company seeks to fill eight full-time roles, including a chief financial officer.
The company’s move also was a shift in its corporate culture.
“We were sitting in a big warehouse,” Kempt says. “It wasn’t really conducive to what we’re doing from an innovation technology perspective, and it was time for a change.”
Project Manager Audrey Meads stepped forward to gather input from peers on the kind of work environment they wanted for the new office and dubbed the changeover Project Redwood, drawing on the symbolism of the interlocking branches. Small offices gave way to an open layout. Wall paintings were produced by employees and their families.
“Change is change – not everybody embraces it the same way,” Kempt says. “The more we have it integrated into the workforce, the better chance we have of staying connected.”
Springfield’s roster of higher education institutions also helped the company make the decision to stay local, Kempt says. The company is working to establish an internship program with Missouri State University in order to stock young talent and fresh ideas alongside building the Bancsource brand.
“We’re trying to create the ambiance of Bancsource, and leverage Springfield to do it,” Kempt says. “It’s not an overnight thing, but we do have a great opportunity.”