Magazine article American Banker

Republic Signs Up with Systematics for Check Processing

Magazine article American Banker

Republic Signs Up with Systematics for Check Processing

Article excerpt

Republic National Bank of New York has hired Systematics Information Services Inc. to process its checks, on an imaging system from Unisys Corp.

Republic, with $36 billion in assets, is the first large bank to contract for a vendor to provide image-capture services.

The bank anticipates savings of 20% of its annual check-processing budget in the first full year of the contract, an executive said.

Republic officials said that, by outsourcing its check operations, the bank will move to image technology at least a year earlier than it could have done had it kept the operations inhouse.

Both the bank and Systematics declined to disclose the contract terms.

N.J. Processing Site

Republic's 200,000 items a day will be processed in Systematics' Piscataway, N.J., check-processing facility. The software and services vendor is based in Little Rock, Ark.

The New Jersey site will also be the first that Systematics converts to technology for capturing images of deposited checks.

"These are very exciting times in check processing," said Thomas Rea, senior vice president of Littlewood Shain & Co., a consulting firm in Exton, Pa.

"There are clear opportunities to drive costs down by consolidating operations or relegating functions such as check processing to a utility status," Mr. Rea said.

"The questions senior executives have to ask themselves are |What is the role of check processing in my strategic plan?' and |What do I have to gain or lose by outscoring?'"

Many banks have been hesitant to invest in image systems for proof-of-deposit functions because of the multimillion-dollar price tag.

But for several years bankers have been interested in sharing check-processing facilities to reduce unit costs and share the investment needed to take advantage of image processing.

Rethinking the Issue

Until recently, talks along these lines have failed because of technical and competitive concerns. …

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