U.S. Bank / vertical integration

U.S. Bank is much more vertically integrated than smaller financial institutions. I would suspect most large financial institutions are in similar positions.

Over the 14 years I have been at the bank, we have gone from a locally owned financial institution to the 6th largest bank in the U.S. Through these mergers, I have seen the bank’s processes become more and more vertically integrated.

When we were Citizens Bank and Trust, our computer system was outsourced through Computer Services Industries (CSI), here in Paducah. As a small town bank, many divisions including the credit card sector, merchant processing group, and our investment / brokerage division, were outsourced through other companies. Employees for those companies would work inside the bank, service Citizen’s Bank customers, but they truly worked for another company. All of these processes are now in house.

Some functions are still outsourced. An outside company does our shredding, and various companies service our armored car needs. Both of these areas of business have significant, and expensive, insurance and security requirements. Someday these processes may be brought in house, but for now, they are still vendor serviced.