Lydian Private Bank has carved out a unique niche in the banking industry. In fact, it has carved out two unique niches. The bank has two distinct divisions, Lydian Bank & Trust, a Palm Beach, FL-based private bank specializing in sophisticated solutions for high-net-worth families, and VirtualBank, a customer-service focused Internet bank with low-rate loans, high-yield savings products and a wide array of products available through the Web.

As such, its banking platform has to be flexible, customizable and sophisticated enough to offer varied and complex products to two different customer bases at the same time. The bank, which operates entirely on the Microsoft Platform, also has a very hands-on approach to its IT strategy and develops a lot of its own software. As a result, the IT team is both savvy and particular about what will fit its needs.

“We’re particular about what we like. We know what we need, and we want something flexible that we can grow with,” said Frank Barbato, vice president and chief software architect at the firm.

So when it came time to re-evaluate the IT infrastructure, the partner Lydian Private Bank chose for its core processing was Harland Financial Solutions and its Phoenix System. One of the primary reasons for this selection was the true openness of the Phoenix System, made possible with the powerful XML middleware, OpenPath.

“We clustered the OpenPath XML Web service so it has high availability and scalability and provides ubiquitous access to fully leverage the connectivity to the back-end database and apply all our custom Phoenix business rules,” explained Barbato.

OpenPath is a .NET-based Web services banking platform that uses industry standards like XML to enable virtually any application to link with the database, the back-end systems and other applications. The system separates applications and business rules into physically separate, reusable components.

This architecture was a fit for Lydian Private Bank, which has grown from 10 to more than 325 employees in the past six years, while also experiencing a rapid rise in assets under management totaling 1.6 billion dollars. The bank wanted the ability to scale, along with the flexibility to add new products and applications.

“It can scale, we can customize it, and it has high availability,” Barbato said. “In fact, not only does it serve as a platform for the two different banking channels, but other areas like the call center, the ATM network and the bank by phone system can all access the database in a standardized way through OpenPath,” Barbato explained.

And when it comes to serving the two banks’ varied strategies, that’s where standards-based connectivity is a differentiator.

“They both focus on service, but they have very different needs,” said Barbato. As an Internet-only bank, VirtualBank differentiates itself in part through its technology. “It has its own application process written internally; we continually change and add new products to meet the needs of our clients,” Barbato said.

VirtualBank, for example, offers eMoneyMarket accounts that require special fraud protection, for which Lydian Private Bank has constructed a sophisticated workflow. Customers must specify an external account when opening eMoneyMarket accounts. The bank then deposits money in the external account and sends the customer an email asking him or her to go to the VirtualBank site and enter the amount of the transaction made to the external account. When the correct amounts are submitted, the workflow automatically processes the account, uploading it into the Phoenix System and setting them up for online access without intervention. This workflow integration is made possible by the openness of OpenPath’s architecture and standardized interfaces.

By contrast, because of its high-touch approach, Lydian Bank & Trust does not have an online application process, and most interactions are handled over the phone, in the office, or even through house calls. Its emphasis on services, rather than self-service, is also managed through the system.

For VirtualBank and Lydian Bank & Trust, the Phoenix System’s OpenPath continues to serve as the foundation for both banks as they offer high-tech and high-touch solutions to their respective customer bases.

“We’re confident that we have a reliable, open and accessible system that allows us to innovate,” said Barbato.