One Vendor, One System

For Indianapolis-based Union Federal Bank, expansion required consolidation. As the bank sought to build its wholesale lockbox business, it decided to migrate retail and wholesale lockbox software processing onto a single transaction system to improve efficiency, according to Ken Sweitzer, VP of remittance operations at Union Federal ($3.3 billion in assets). "The goal," he says, "was to find one vendor, find something easy to use and speed up the process at the bank."

Though Union Federal's existing wholesale lockbox provider could provide the bank with a short-term solution, Sweitzer did not want to invest in upgrading the system if it didn't meet the bank's long-term objectives, he says. So the bank contacted The Association of Work and Process Improvement for help identifying vendors. The bank discovered that Mosinee, Wis.-based Wausau Financial Systems - its retail lockbox provider - was entering the wholesale lockbox market. Because he was extremely pleased with the company's retail product, Sweitzer relates, the bank decided to work with Wausau to implement the vendor's wholesale lockbox software.

Parallel Testing

Union Federal became one of several beta sites for Wausau's Optima Image (3(r)) RPS wholesale system during the second and third quarters of 2004. The bank began live tests in November 2004, processing some customers under both the new application and the old system. When the parallel testing was completed in December, the bank had migrated one-third of its customers to the new system. In January 2005, its remaining wholesale clients were migrated to the system.

To support the platform, Union Federal upgraded to a Dell (Round Rock, Texas) Power Edge server. Auxiliary databases interface with the system and are supported by separate servers. According to Sweitzer, the solution required few adjustments from the 30 employees responsible for remittance processing since 60 percent of the key-in functions are the same.

"The budget savings we are currently experiencing due to our recent conversion is an 8 percent cost reduction," Sweitzer says. In addition, he relates, the bank has benefited from three features of the new software in particular. First, Optima Image helps in the daily workflow since all Union Federal remittance employees can view the same information. Second, on the back end, the software provides the ability to use the same processing system to create CD files. And third, the system can be customized. "Image RPS will offer us economies of scale, data-entry efficiency, reduced maintenance costs, provide audit control and really offers a one-stop solution while strengthening our competitive positioning and product offerings," Sweitzer explains.

The new system also has resulted in improved service, Sweitzer notes. It allows the bank to move images and post payments faster, he says. After processing is completed, most large customers can view the check images on a secure Internet site.

Sweitzer stresses that Union Federal still is upgrading its lockbox operations. Installation of OPEX (Moorestown, N.J.) model 3600-I full-page scanners was planned for June and, after beta testing, remote capture processing for deposits and lockbox transactions for both retail and wholesale customers will be processed at the bank's main site, he says.

Snapshot

Institution: Union Federal Bank (Indianapolis).

Assets: $3.3 billion.

Business Challenge: Consolidate lockbox processing on one system.

Solution: Wausau Financial Systems' (Mosinee, Wis.) Optima (3(r)) ImageRPS remittance platform.