In 2004, Umpqua's bankers will receive a noticeable speed boost. "Our capacity in the network is going to be increased probably tenfold," says Tim Meier, senior vice president and CIO of Umpqua Bank (Roseburg, Ore.; $2.8 billion in assets). Prior to joining Umpqua, Meier was in charge of IT at U.S. Bancorp and had also been a technology executive at Nike, Inc.
The bank will complete an upgrade of its IP network in the first quarter of 2004 in order to prepare for the task of sending check images from the branch to the back office and beyond. "That's pretty bandwidth-intensive, and we want the ability to grow the network without a new design," says Meier. "If we need two T-1s instead of one T-1, we can do that without redesigning the network or replacing any routers or anything of that sort."
They'll probably be glad they did. "Check 21 is going to be absolutely revolutionary," says Meier. "I've heard people talk about it being the biggest thing since MICR."
Now, Umpqua's back office is all set for the revolution. "We'll reduce our courier costs and our dependency on couriers, we'll reduce our proof costs, we'll extend our window, and we'll be positioned well for more real-time processing as Check 21 evolves," says Meier.
Umpqua will run several new applications on top of the new network. "We're planning to put a new teller system in place to capture check images in the store and transmit them over the network," says Meier. The bank's core systems are from Information Technology, Inc. (Lincoln, Neb.), with which it developed its branch check- capture solution in conjunction with Unisys (Blue Bell, Pa.). Microsoft (Redmond, Wash.) is also a major software partner of the bank.
Having image-exchange capability would have been useful in early January, when the Pacific Northwest was inundated by snow. "We came through it fine, but it would have been a lot higher quality and better delivery if we had been able to capture these checks in the branches," says Meier. "If we're going to do that, we've got to have very reliable networks. That's why the network is so important as an underpinning for this."
Other initiatives for Umpqua this year include consolidating three Internet banking platforms from its prior acquisitions onto a single platform; implementing a Sarbanes-Oxley risk-management solution; and continued vigilance on the information-security front.
Given all of these exciting activities, IT spending at Umpqua Bank has definitely risen. "Our budget is up in IT, but it's kind of hard to say exactly how much because we've had so much growth," says Meier. "There's a lot of normalizing that has to take place, but it's substantially over what it was a couple years ago."