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Deena M. Amato-McCoy
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Jack Henry Continues Outsourcing Expansion, Adds Item Imaging

As banks look to cut set-up costs and prepare for Check 21, the technology provider is expanding to meet their needs.

With less capital to spend on core business technologies, financial institutions are increasingly turning to outsourcing options. Jack Henry & Associates (Monett, Mo.), which provides integrated computer systems and processes ATM and debit card transactions for banks and credit unions, is meeting those outsourcing needs with an expanding fleet of remote data and item processing centers.

"With less capital available, banks are doing more with existing technology," says Tony Wormington, COO for Jack Henry & Associates. "These companies are becoming more attracted to outsourcing since they can get into an outsourcing arrangement with less money up front."

Jack Henry first offered its outsourcing solutions in 1995. Today, nearly 400 banks and credit unions outsource their core data processing to Jack Henry. Following the introduction of Check 21, which enables financial institutions to substitute electronic documents for paper, Jack Henry has recently added image processing operations to some of its locations.

"Check 21 has put imaging on all banks' radar," says Wormington. "If a bank's philosophy is to outsource its item processing, they will likely want the ability to outsource their core data processing as well. We want to give them the option to outsource their items locally, with the ability to outsource their core processing to Jack Henry's centralized core data processing centers," he explains.

In addition to seven data processing centers that run core banking and credit union systems, Jack Henry opened three new item processing centers in Lyndhurst, N.J.; Windsor Locks, Conn.; and Chicago during 2003. Its newest item image processing facility, which opened in Atlanta on March 1, features the company's 4|sight imaging system. "The system provides the capability for remote amount entry via the Internet," Wormington says. "All work is then completed and processed by a centralized staff within our facility."

The Atlanta facility will support outsourcing capabilities for check imaging in the Southeast region. "The Atlanta area was attractive to us because it is populated with many new, potential customers," says Wormington, adding that operating advantages "will make the Atlanta center profitable starting on day one." The first of three centers slated to open in 2004, the Atlanta facility processes an average of 10,000 items per day. "We expect the average of daily items to reach 20,000 by the end of the year," Wormington adds.

Jack Henry's goal is to continue to add new item-imaging facilities. "We plan to continue opening additional image processing facilities in targeted locations at a pace of three or more per year," Wormington says. To date, Jack Henry operates 18 image processing centers across the United States.

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