Monday, October 15, 2007

Efficiency Key To Corporate Treasury

By Mark Brousseau

For those of you still wondering about the industry’s move from traditional remittance processing to receivables management (which integrates transaction processing more tightly with accounting functions), a recent survey by Business Finance and JPMorgan Chase should give you pause.

Internal efficiency initiatives were cited by three-quarters of respondents as the most important driver of the corporate treasury function – ahead of the economy, mergers and acquisitions, globalization, and financial industry consolidation. Maybe there’s something to the push for A/R matching, auto-posting and invoice scanning after all.

What do you think? E-mail me at

Get Ready For More RP Vendor Consolidation

By Mark Brousseau

You might have been surprised to hear this morning that long-time remittance and lockbox solutions vendor JB Software, Inc. is being acquired by India-based 3 i Infotech Ltd.

3 i Infotech signed a deal to acquire the TAWPI Hall of Fame member and its units for $25.25 million in cash, according to a Dow Jones report. The move will give the Indian company a greater footprint in the payments processing business in the U.S.

“This company has a payments processing product which is well accepted in the U.S. market. We expect strong growth for this product in markets outside the U.S. as well,” 3 i Chief Financial Officer Amar Chintopanth told the Dow Jones Newswires.

While Chintopanth might be expecting growth for JB Software, several industry watchers I spoke with today are anticipating more consolidation among remittance solutions vendors. “I expect to see continued consolidation among the remittance solutions providers, fueled by the growth opportunities offered by remote deposit,” Creditron President Wally Vogel ( told me, noting that JB Software was only an occasion competitor to Creditron, which was acquired this summer.

“Remote deposit, integrated with the accounting functions of remittance processing, provides a powerful tool with business implications for accounting application providers, banks, large corporations and remittance technology companies,” Vogel said. “There is an intersection of opportunities for these diverse players that makes this an exciting time for our market.”

Steve McNair (, president of FTP Consulting Services, Inc., in Southlake, TX, also expects more consolidation among remittance solutions providers. Going forward, he believes we could see more end-user interest in payments outsourcing than in remittance software license sales.

“This deal is significant because it’s further evidence of the consolidation of the remittance market,” McNair told me. “What’s also interesting is that the deal is with an international company with little background in remittance processing. Given that, I’m wondering whether JB Software will be changing focus towards global engagements, and specialized processing efforts, such as government and custom applications.”

To that end, McNair said 3 i Infotech, by virtue of being based in India, could likely provide JB with the people necessary to deliver on custom programming efforts.

Clint Shank (, president of Omni-Soft, Inc., the parent company of SortLogic SYSTEMS, sees this deal as part of a worrisome larger trend. “In my view, our market is eating itself from the inside out. The big sales based on big hardware and expensive software are gone, and in their place is a commodities market,” he said. "The folks that did well in the past are falling flat in this market. For instance, how long was IBM the most dominant player in our market? Forty years? Fifty years? What does it mean now that they aren’t even present? Look at BancTec and you see pretty much the same thing.”

“What we are experiencing is a real sea change,” Shank continued. “The big players are too slow to respond to an overnight shift in the market and the new guys are filling the void. It used to be that the big ate the small. Now it’s the quick that eat the slow.”

The question everyone I spoke with was asking was: “Who is the next to be eaten?”

What do you think? E-mail me at

Friday, October 12, 2007

Non-Profits Up The Ante

By Mark Brousseau

Go to any conference of charitable organizations, and the conversation will almost inevitably turn to fundraising, and how to effectively steward donors so they’ll be more likely to donate more frequently, and in larger amounts. The solution, many non-profits are discovering, is to better leverage their back-office – or their caging or cashiering operation, as many non-profits call it – to capture more timely, higher-quality information from incoming donations. Non-profits can then use this information to better target and personalize their appeals.

And this is good news for some lockbox providers, says Lesa Brooks, general manager, Data Capture Services, West Region, for CDS Global ( This evolution of traditional donations processing (open mail, deposit check, send supplemental remittance documents on to someone else for handling …) plays right into the industry’s integration of advanced data capture and recognition (think: medical payments/EOBs).

“Non-profits are asking for image and data capture of any document that may be sent to a lockbox. This obviously includes the check, but also appeals, special requests, membership forms, magazine subscriptions, correspondence, directions for how the donation should be used, and more” Brooks told me. “With this information, non-profits hope to accelerate donations posting, eliminate keying of donor information, and feed their analysis and donor management systems. They also want to speed the generation and personalization of their ‘thank you’ letters, which are key to convincing people to donate to the non-profit again.”

Brooks warns that this version of donations processing is not for everyone: “It is specialty processing – certainly not vanilla – and most non-profits require and demand very personal attention.” It’s for these reasons that many bank lockbox providers are not overly excited about processing donations. “The sheer number of forms scares many banks off,” she said.

But Brooks sees that as an opportunity for her company, and others like it.

Thursday, October 11, 2007

Get Off The Paper Trail

By Mark Brousseau

The mortgage industry is inundated with paper: original signed applications, title forms, personal identification, appraisals, and more. Managing all of these documents through the traditional steps of organizing, photocopying, faxing and filing is costly, inefficient and unnecessary. That’s according to eGistics Vice President David Whitehead (

“Lenders would be much more productive if they didn’t have to spend so much time shuffling papers, searching for loan files on someone’s desk, or carrying paper from one department to another,” Whitehead told me. Statistically speaking, industry studies show that employees spend an hour-and-a-half to two hours per day shuffling papers. Whitehead noted that, “Reducing this paper handling time by a half hour or more could have a significant impact on a lender’s bottom line. Lenders can become more productive, service their customers better, and save big money.”

Whitehead said there are four steps to getting off the paper trail:

1. Capture documents immediately at the point of entry
2. Capture any kind of documentation
3. Capture these documents without having to manually index
4. Make the documents immediately available in electronic format throughout the organization

Whitehead warns that Step 4 is critical.

“Most of the useful work on a mortgage document is done within the 48 hours of its life,” Whitehead said. “So an organization has to ensure that their mortgage document aren’t just imaged, but available to be extracted in a way that is straightforward and intuitive for users. Otherwise, the siloing of information adds to the challenges of effectively managing the overall customer relationship.”

Once they get off the paper trail and move to electronic document management, Whitehead said lenders can achieve lower operating costs, greater collaboration, reduced cycle times, improved customer service, and better support for governance, risk and compliance initiatives.

Has your lending organization implemented electronic document management? E-mail me at

Check 21 Speed Bumps

By Mark Brousseau

With the banking industry seemingly speeding towards electronic check clearing, it’s easy to forget that there are some speed bumps along the way. I asked Clint Shank (, president of Omni-Soft, Inc., the parent company of SortLogic SYSTEMS, what he saw as the biggest obstacles that financial institutions are facing as they migrate to electronic clearing. His response: the fact that paper checks are still being issued, and that most legacy capture systems won’t get replaced anytime soon.

Shank noted that most businesses – and some individuals – would continue to issue paper checks for the foreseeable future, a fact that is backed up by myriad studies. And while printing substitute checks or image replacement documents (IRDs) to process in-clearings is not cost prohibitive, it’s also not cheap. Similarly, Shank believes that most legacy check capture systems still have substantial value on the books, and many financial institutions have a big investment in staff focused on using and maintaining these systems.

“The replacement cost for a system that handles both paper and electronic payments is steep, in terms of dollars, resources and time,” Shank noted. “The cost to upgrade a legacy system to process electronic payments may be more affordable, but nonetheless, is still pretty pricey. Moreover, with the consolidation in the solutions provider market, it is now possible for the unwary to put money in their competitor’s pocket by investing in an upgrade to an existing legacy system,” Shank added.

So Shank believes the real hurtle that financial institutions must overcome is how to protect their investment in their legacy capture system, while still moving toward check truncation. “This is a game played on a knife’s edge, where any miss-step can provide costly,” he said. “Perhaps this is why new services like remote deposit capture and Back Office Capture – which can be added without compromising this delicate balancing act – are so highly favored.”

How are your financial institution’s legacy systems impacting its electronic clearing initiatives? E-mail me at

Wednesday, October 10, 2007

Utilities Eyeing Payments Outsourcing

By Mark Brousseau

Declining check volumes and rising paper-check clearing costs are forcing more utilities to look toward third-party lockbox providers and banks for outsourced payments processing solutions. That’s according to Serena Smith, senior vice president, Remittance Processing Division, for Fidelity National Information Services (

Smith told me that the story isn’t much different in the other industries with which Fidelity National Information Services works. But utilities are finding that they need to consider outsourcing to reduce operations costs and update outdated processes and technology.

“Many of the larger utilities that we are courting are not taking advantage of an online archive, ARC, or automated exceptions modules,” Smith said. “Status quo seems to have been the case in the utility industry for many years, and partnering with a different technology vendor – if in-house – or services provider – if outsourced – is helping utilities leverage new technologies and achieve even greater efficiencies.”

The industry’s move towards electronic payments is another factor driving utilities to consider outsourcing. Smith noted that many utilities are struggling with how to effectively manage their various payments channels (including Web store fronts), and they often have standalone systems and processes for each channel. Outsourcing allows utilities to largely offload this responsibility and dramatically consolidate their systems and processes.

The bottom line: “Many utilities have a desire to remain in-house. But the increased cost of processing will force others to take a stronger look at outsourcing – something that would never have been an option for some of these organizations several years ago,” Smith said.

Has your utility changed its thinking on payments processing outsourcing? E-mail me at

Tuesday, October 9, 2007

Accounting Technology Is Adequate ... Or Not

By Mark Brousseau

In a survey of finance leaders by Treasury & Risk magazine and Citigroup, a staggering 74 percent of respondents say accounting is the top function that is well supported by technology. Cash flow forecasting (33 percent), custody/trust (23 percent), foreign exchange (20 percent) and account reconciliation (19 percent) bring up the rear, albeit many lengths behind.

But before you accounting solutions providers get too full of yourself, it’s important to note that, in response to a separate survey question, finance leaders also pegged accounting as the top function that needs to be supported more effectively by technology (52 percent). Following close behind was business performance management at 51 percent. Other functions where finance leaders think technology could be doing a better job: cash flow forecasting (43 percent), compliance (37 percent; executives told the survey that they spend the most time on control and compliance) and account reconciliation (29 percent). The complete survey results can be found online at

How has your organization used technology to more effectively support accounting? E-mail me at

Sunday, October 7, 2007

Benchmarking Blues

By Mark Brousseau

In a column in the October 15th issue of FORBES, Publisher Rich Karlgaard notes that a flaw common to business and rampant in government is the failure to benchmark. In sports, performance and relative performance are laid bare for anyone to see. But in business, the instincts are to shut our eyes to benchmarking, Karlgaard wrote. “We don’t want to see,” he claimed. Karlgaard’s recommendation is to start the benchmarking process with three questions:

... What does our competition do better than we do?
... Are our shortcomings rooted in our personnel, our system or something else?
... Which companies that are not competitors now could step in and eat our lunch tomorrow if they wanted to?

As another benchmarking tool, TAWPI just launched a survey to track error rates in remittance and retail lockbox operations. The results will be available by year’s end. Want to learn more? E-mail me at

Wednesday, October 3, 2007


Acquisition Expands Back-Office and Retail Banking Solutions, and Adds More Then 1,000 Financial Institutions to Client Roster

Monett, MO – October 1, 2007 – ProfitStars (a division of Jack Henry & Associates, Inc. Nasdaq:JKHY) which provides highly specialized products and services that enable financial institutions to mitigate risks, optimize revenue, and contain costs, today announced the acquisition of Texas-based AudioTel Corporation. AudioTel supports more than 1,000 financial institutions with back-office and retail banking solutions. Terms of the transaction were not disclosed.

AudioTel provides proven remittance, merchant capture, check imaging, document imaging and management, and telephone and Internet banking solutions. The company has continually expanded its product offering and market presence since it was founded in 1993, and its specialized software and hardware solutions have consistently been on the forefront of the payment processing industry.

Jack Prim, CEO of Jack Henry & Associates, reported, “Our acquisition of AudioTel supports our strategy to acquire companies that provide additional complementary solutions we can cross sell to our core financial institution clients, that generate new cross-sale opportunities among our respective client bases, and that expand the specialized products and services our ProfitStars™ division sells to virtually any financial services organization regardless of core processing platform. We have identified synergies among our respective product lines, and we are particularly excited about the opportunity to enhance our enterprise payments offering with AudioTel’s thick/client remittance processing and lockbox solution, and to advance our 4|sight™ Check Imaging platform with AudioTel’s branch capture solution.”

According to Scott Doores, President of AudioTel Corporation, “We believe joining Profitstars and Jack Henry is in the best interest of our clients, our employees, and the future of our products and services. We expect access to Profitstars’ significant resources and technology tools will expedite our speed-to-market with ongoing functional enhancements. The opportunity to leverage its extensive support infrastructure will enable us to continually enhance our customer service initiatives. Joining Jack Henry will provide the stability only available as part of a public, financially sound company. And we are excited about our common corporate cultures, which are fundamentally focused on establishing long-term customer relationships by delivering quality products and outstanding service.”

“AudioTel marks Jack Henry & Associates’ 17th acquisition made to support our focused diversification strategy, which we adopted in 2004. We are especially excited about acquiring this company since it adds more products and services to our ProfitStars brand than any other focused diversification acquisition made to-date. In addition to enhancing ProfitStars’ market presence and potential, we expect this acquisition will have a slightly accretive impact on EPS for the remainder of our fiscal year 2008,” concluded Kevin Williams, CFO of Jack Henry & Associates.

Tuesday, October 2, 2007

SAP Launches Corporate-to-Bank Connectivity Service Offering for Banks

Service Package to Offer Banks Insight on Cost Savings and Value-added Services behind Standards-based Integration with Corporations
(From PRNewswire – Oct. 1, 2007)

SAP AG today announced a new service offering for banks to help them prepare for and take advantage of the latest technological advances in corporate-to-bank connectivity. The SAP consulting package outlines the benefits of standards-based, real-time corporate-to-bank connectivity in reducing costs and IT complexity while increasing wallet share and enhancing customer satisfaction. The announcement was made at Sibos, the world's premier financial services event, being held in Boston, October 1-5. The go-to-market service offering will be complementary to the SAP® Bank Relationship Management application and SAP Integration Package for SWIFT, a standardized software solution linking SAP ERP directly to SWIFTNet, the IP-based messaging platform connecting nearly 8,100 financials institutions in 208 countries and territories. The consulting package was developed to provide banks an educational resource to better leverage the potential of standards-based corporate-to-bank connectivity based on XML messages.

A recent study, "Are You a Strategic Thinker" conducted by financial news services Finextra and SAP found that over 86 percent of respondents who are responsible for payments are embracing the new XML message types. But of these respondents, 32 percent are only interested in using this standardization for interbank connections. Such a finding demonstrates the need for better understanding of utilizing XML messaging for corporate-to-bank connections. Today, banks and corporations maintain multiple payment channels and communication lines, often haphazardly integrated with ERP and transactions systems. This complexity increases business inefficiencies and security gaps and leads to higher support costs. With the SAP consulting package for bank connectivity, banks will be able to move away from proprietary applications to streamline payment cycles, consolidate security log-in points and improve compliance management. Additionally, specific value-added services can be delivered through the offering based on customer preferences. "With this additional service, banks will be able to enlarge their offering for their corporate customers," said Christian Kothe, head of SWIFT Central & Eastern Europe. "Unified corporate-to-bank connectivity will, over time, benefit both banks and corporations as the corporate offerings continue to evolve. This offering was a natural progression of the partnership SWIFT has with SAP." "With the evolution of standardized protocols and ERP applications, the opportunity now exists to create a fully contained corporate-to-bank ecosystem for all financial transactions," said Karl Kesselring, vice president OEM Sales & Partner Management, Global Banking Line of Business, SAP Labs, LLC. "Corporations have been the main protagonist in the popularity of corporate-to-bank connectivity, but banks have their own important role to play. Through the SAP consulting package for bank connectivity, our customers will get a better picture of what their vested interests are in this new framework and will give them the proper tools to build the framework from their end."

Setting Trade Show Expectations

By Mark Brousseau

Go to any trade show – big, small, crowded or sparsely attended – and you’re sure to hear some vendors grousing about how lousy it was. Quite often, the problem isn’t the trade show; it’s the lack of objectives and expectations that the grumbling exhibitors set for the show.

Many exhibitors try to determine their expectations for trade show expenditures after the fact. These same companies would never dream of embarking on a product development initiative without setting clear objectives, so why in the world would they spend considerable time and money on a trade show without doing the same?

What companies need to do is define clear objectives and expectations before ever placing a deposit on their booth space. These objectives might include generating a specific number of leads, building corporate visibility, meeting potential partners, coddling key customers, providing so many product demonstrations, or creating buzz about a concept.

With these objectives in place, exhibitors avoid the sliding scale of expectations that typically leads to disappointment (and uncomfortable conversations with the senior management who sign off on the expenditures). These objectives also enable exhibitors maximize their expenditures by helping ensure that they don’t buy too much (or too little) booth space, bring too many people (or the wrong people), print the wrong product collateral (or too much), have a needless or inappropriate booth giveaway (more on this another day), or create the wrong product demonstrations or booth signage. Want to know more? E-mail me at