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Terrance Svejda

Terrance Svejda
Terrance Svejda

Banking's little secrets

Iowa State alumnus Terrance Svejda has transferred his accumulated banking knowledge into a successful consulting firm.

If you're in the market for a new car you can conduct research on the model you want in Consumer Report or any variety of other methods. Same with electronic purchases.

But if you are a community banker there is no Consumer Reports for you.

That's where Terrance Svejda and SVEJDA and Company comes in. The Iowa State graduate ('69 math; '72 MS statistics) operates the consulting firm and provides the nation's smaller banking institutions with valuable information.

"We're a profit enhancement consulting firm for the banks," Svejda said. "We find ways for them to not only increase their income but to decrease their expenses.

"That fits in with how they like to do business."

There are several ways community banks can either increase income or decrease expenses. That can be through ATM charges, check providers, data processing and telecommunications contracts.

Svejda says the vendors provide banks many of these services. Community banks rarely have employees on staff expert in dealing with the vendors when new contracts come due.

"Based on my experience working with banks we're developing a lot of 'tricks of the trade,'" Svejda says.

Some of these "tricks of the trade" include reducing fees that a community bank is charged for debit card transactions. Svejda says a banking conglomerate might pay as little as two cents per transaction. A community bank's fee could range from 16-23 cents per transaction.

"We provide the services to go to a vendor and get reduced pricing back on our market experience," Svejda says. "This could save up to $100,000 a year for a community bank and it's all based on market information we can provide."

Svejda says there are approximately 9000 independent banks across the country and 95% of these would be termed "community banks." SVEJDA and Company has provided services to approximately 1000 such community banks since the consulting firm was established in 1986. The firm moved to Orlando three years later because a majority of their clients were based in Florida.

But SVEJDA and Company has consulted with community banks in 35 states and three foreign countries and has long-standing relationships with banking associations not only in Florida but Georgia, Texas and Illinois.

After Svejda finished his master's degree in statistics at Iowa State, he moved to St. Paul where he attended law school and worked at First National Bank. It was there that he first realized the need to offer specialized profit enhancement consulting services to community banks.

"I gravitated into bank consulting, first with another firm and then I finally thought 'this is pretty easy. I can do this myself,'" Svejda said.

Svejda says his Iowa State degrees in mathematics and statistics, as well as the law degree all fit well into his consulting firm.

"I may not use calculus much anymore but I do use a lot of basic math and algebra," he says. "And virtually everything we do has a statistical aspect to it. If I didn't have these degrees, plus my law degree, I would be severely handicapped in doing my job."

And it's a job that Svejda plans to continue for a while.

"It's something I really enjoy doing," he says. "I like solving puzzles and in a lot of ways what we're doing is like solving a puzzle."