When Atlantic Central Bankers Bank, or ACBB for short, launched its own telecom division early this year, it did so more out of desperation than anything else. Like the telecom market itself, the banking industry has gone through a wave of consolidation, leaving many small independent banks struggling for survival. For ACBB, which has a shareholder base of more than 300 community banks throughout Delaware, Maryland, New Jersey, New York and Pennsylvania, the impact of consolidation was severe.

“What drove [ACBB's] creation is the fact that community banks were being forced to deal with competitors for everyday transactions,” said Chuck Daniels, CEO of the banking infrastructure and technology services (BITS) division of ACBB.

Likewise, BITS was created to give member banks larger buying power.

The group launched by providing voice-over-IP service to member banks, many of which operate in small, rural towns served by independent telecom companies. Operating out of redundant facilities in Newark and Camp Hill, N.J., BITS also provides call center services.

“I'm both a local and long-distance company. I'm an ISP and a core transport provider,” Daniels said.

BITS has negotiated for MPLS circuits from AT&T and MCI and now passes all calls through its two centers. For installation work, the company uses one of several Cisco System IP Telephony partners, which then handle all hardware setup. The company also provides video conferencing and virtual private network services. Perhaps most important, BITS relieves local banks from having to keep up with the latest technology.

“There are about 5000 community bank [locations] in ACBB's area. Of those, 60% have 10 or less phones,” Daniels said, noting that those 5000 locations are operated by about 500 entities. “This is a not a perfect bell curve. Two-thirds of those community banks have 10 branches or less.”