The Right Fit
""ACS has a significant market share 70 percent of microfilm capture in banks across the country,"" said John Bonin, senior vice president of i-Solutions at J.P. Morgan Chase. ""We've got this great platform i-Vault for a repository with Internet access. Put the two together and it becomes an interesting solution for a tier of banks.""
Creating images from microfilm and getting them into i-Vault is straightforward. ""It involves enhancing the image on the microfilm, digitizing it and then sending it up through our VPN virtual private network for transmitting into our archive,"" said Bonin.
The Chase-ACS service, which uses a simple pay-as-you-go billing model, enables smaller banks to launch an image-enabled check operation within 90 days. ""Our marketing arrangement with ACS enables a bank to be image-enabled without a large capital expenditure,"" said Bonin.
For banks with multiple sites, the service offers Internet access to a centrally-stored database. ""We provide, through our browser capability, distributed access to the images in our archive,"" said Bonin.
By absorbing the costs of building and maintaining the system, Chase has eliminated the risk for smaller banks. ""We maintain the platform, we do the technology refresh. They don't have to hire employees and make the capital investment,"" Bonin said.
The Chase-ACS service comes a year-and-a-half after the introduction of Viewpointe Archive Services, a venture of Chase, Bank of America, SunTrust Banks and IBM. Although both services involve check imaging, Viewpointe is aimed at large banks that want to exchange images, not merely store them.
""Viewpointe is involved with prime pass capture, multisite, high-volume banks,"" said Bonin. ""Those banks have a big interest in image exchange. We're gearing this ACS to those banks that aren't ready to image-enable their platform.""
ACCESS: Business Bank of Nevada
Business Bank of Nevada is no stranger to outsourcing. For the past five years, the $200 million institution has used Aurum as its data and item processing provider. But a desire to offer online check imaging triggered a search for a new provider.
""I was getting good service from Aurum,"" said Larry Charlton, executive vice president at Las Vegas-based Business Bank. ""But as a public company, you want to make sure you get the best deal.""
In April, the bank tapped Fiserv, a Milwaukee-based IT services company, to handle account and item processing, proof capture and imaging. Fiserv won out over Jack Henry & Associates and Aurum for the deal.
The bank is working closely with Fiserv to make check images available via the Internet. ""The imaging drove me a lot. There's a tremendous benefit to imaging,"" Charlton said.
Business Bank rejected as too costly the option of bringing the operations in house. ""We're not at the volume where that is a viable solution,"" said Charlton. ""I was able to go to imaging much less expensively in a service bureau environment.""
For Business Bank, outsourcing is a classic example of addition by subtraction. ""Just my bank-a $200 million bank-and I've got all of my data and item processing outsourced, all of my central vault work outsourced, a chunk of my computer and day-to-day maintenance outsourced,"" said Charlton.
Outsourcing allows smaller banks to compete against the 800-pound gorillas of the industry. ""Sixty-five percent of this marketplace Las Vegas is dominated by Wells Fargo and Bank of America,"" said Charlton. ""Outsourcing allows us to level the playing field.""
That's especially true for imaging. ""I used to work at Bank of America. Our controlled disbursement product was imaged, but there wasn't image throughout the bank. They can't get to where we are without a whole lot more time and money.""
Many smaller banks outsource item or data processing. Some, like Business Bank, outsource both. ""With item processing, you've got to be able to proof the items and capture them. I would prefer to outsource it,"" said Charlton.
Another function that banks typically outsource is IT maintenance and support. ""Even though we're in a service bureau environment, somebody's got to take care of our stuff locally,"" Charlton said.
Business Bank employs an outside firm to provide IT support, but it's in the process of bringing that function back in house. ""I recently brought in my own IS person,"" said Charlton. ""I still have a company doing my server maintenance, but he takes care of all our workstation maintenance.""
OPTIMIZATION: American Express
In April, American Express announced a human resources (HR) outsourcing deal with Mellon HR Solutions that, together with its IT services deal with IBM, puts it in two categories (Management and Optimization) of outsourcing. Mellon, which has spun off HR management into a profitable business, will provide American Express with an array of online HR services, including online compensation, employee policies and payroll.
The deal is intended to improve the speed with which employees access HR information and update their employee records. ""It will enable us to reengineer processes, and allow our internal HR assets to focus on core activities,"" according to Ursula Fairbairn, executive VP of HR at American Express.
A similar relationship exists between Bank of America and Exult, an Irvine, Calif. business process outsourcer. In 2000, the bank signed a 10-year contract with Exult to manage its global HR processes. The deal was extended last September to include administration of the bank's regional staffing function.
In public statements, both sides have praised each other for their spirit of cooperation. ""This is not a client-vendor relationship,"" according to Mary Lou Cagle, senior VP of business transformation at Bank of America.
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