Independence Bancshares in Greenville, S.C., could be the banking industry's equivalent of Clark Kent.

At first glance, the $108 million-asset Independence is a traditional and unassuming bank. The company quietly gathers deposits and makes loans. The economic downtown dinged the loan book, and Independence has been operating under an enforcement order since early 2010.

What makes the company super is an application that seeks to tie together mobile banking and real-time processing. Independence will soon offer a trial run of the technology, which some industry experts say will revolutionize banking.

Real-time processing is "more than incremental, it's transformational," says Eric Bass, managing partner in the financial services consulting group at CSC. "Generation Y customers expect this from their banks. It's rapidly becoming a requirement to compete."

Independence's outlook improved roughly a year ago, when it raised $14.1 million and brought in Gordon Baird as its chief executive. Baird, a former executive with Citigroup and State Street, also developed the technology being tested.

The infusion of capital also ushered in experienced directors, including Robert Willumstad, a former Citi president and former chairman and CEO at American International Group. Willumstad is Independence's chairman.

Baird, who controls the outside company that developed the mobile-banking technology, plans to deploy the application during the first quarter. With real-time processing, a customer's transactions are immediately updated in his or her account status. It contrasts with batch processing, where a lag exists between a transaction's close and an account update.

While customers are demanding instant account updates, the adoption of real-time processing also promises to reduce costs at banks by consolidating multiple computer systems, Bass says.

Such processing has taken root overseas. When the Spanish-owned BBVA Compass adopted Accenture's real-time processing software and services, it became one of the few commercial banks in the United States to process all of its transactions in real time.

"Most of the traditional banks, small, medium and large, in the U.S. are not on a real-time processing system," Baird says.

In the United States, "real-time processing is a rarity for community banks," says Ken Mathis, a payments consultant at North Highland. Big banks use real-time processing, but they typically offer it only to high-net-worth clients or for business-to-business transactions, he says.

"If community banks want to compete in the U.S. banking industry, real-time processing gives them a competitive advantage," Mathis says. "Real-time has become a reality, and consumers will choose whatever institution makes life more convenient for them."

In that respect, Independence's customers will find themselves on the cutting-edge of bank technology. Though Baird is developing technology that could transform banking, he plans to keep running Independence as a traditional community bank. In fact, it is an essential part of his strategy.

"We really do think we can build the bank into a showcase, marquee bank using this technology," Baird says.

Selecting a small bank in South Carolina was intentional, Baird says. The area around Greenville has a growing population of roughly 1.4 million people.

The local economy is fueled by heavy manufacturing and technology. It includes a BMW assembly plant and a General Electric gas-turbine facility. Boeing recently said its design team for a new project would be based in the area.

"What comes along with BMW, Boeing or companies like that are generally engineers, who have a technology focus" and would be more open to technology advances in banking, Baird says.

As an added bonus, Greenville - and the overall Southeast - has a lower cost of living compared to many other parts of the country. That could be crucial for Independence; its technology will likely need support from a large back-office department.

"There is a cost advantage in South Carolina," Baird says.

For now, the application is being developed exclusively for Independence, but Baird says it could eventually be sold to other banks.

The application could have implications beyond basic banking. Independence hinted at the technology's potential in a July 3 prospectus for a follow-up offering to raise $1.8 million.

The application has "the ability to integrate payment services with loyalty, advertising, social media and couponing strategies, many of which we believe did not, and currently do not, readily exist in the market," the prospectus said.

Mobile communications is integral to Baird's business plan, It helps explain why the company recently hired two Verizon Communications veterans, Aditya Khurjekar and Humphrey Chen.

"We're at the early stages of a long-term trend," Baird says, "the merging of traditional banking and telecom."

Andy Peters writes about regional banks and community banks for American Banker.

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