Outsourcing of Wholesale Lockbox Processing One Key to Banks' Profitability

MOSINEE, Wis. - (BUSINESS WIRE) - As deposit-hungry financial institutions look to grow the treasury management side of their business to make up for a softer retail side, they face a "perfect storm" of challenges. Lucrative vertical markets beckon - such as property management, health care and utilities - but the capital investment typically required to provide wholesale lockbox capabilities simply can't be justified with the decline of check volumes, especially in today's down economy.

Providing an option that allows banks to offer services to customers regardless of where they are across the country, at a business-friendly cost, is one way that WAUSAU Financial Systems is strategically building upon its foundation as a software technology company.

"Outsourcing of wholesale lockbox activity can help financial institutions meet their customers' goals as well as their own business objectives," said Joe Delgadillo, President and CEO of WAUSAU. "The timing is ideal, as many institutions are actively evaluating business alternatives during a challenging economy. In providing a comprehensive solution for this need, WAUSAU is demonstrating its value as an innovative partner."

A critical time for banks

Many banks, already under considerable pressure to cut costs and grow deposits, can no longer afford to maintain large lockbox operations or invest in expanded capabilities to penetrate new markets. Traditionally, outsourcing required moving client processing out of the local geography, but business can be lost if the remittance processing takes place too far away from end customers. WAUSAU has developed a solution that leverages existing capture centers in multiple locations around the country to provide remittance processing services as well as remote deposit capture.

"This breaks down geographic barriers many banks have, allowing them to serve their local customers as well as customers across the country," said Charlie Gibbons, Executive Vice President, Strategic Business Development.

WAUSAU maintains a significant retail lockbox processing operation through its ongoing partnership with First Data's REMITCO, operating hub facilities in six cities, soon to be eight. To this, WAUSAU has acquired a wholesale lockbox operation in the Boston market to expand its services and capabilities to better serve clients.

Eastern Bank, a financial institution with $6.7 billion in assets and 83 branches based in Lynn, Mass., as well as another institution with $11 billion in assets, have already come aboard as WAUSAU's newest clients and converted to this outsourcing platform.

WAUSAU is expanding its network of satellite sites to extend capture capabilities even more. By 2010, the company will have access, within 150 miles, to 80 percent of the U.S. population. This will eliminate geographic limitations and fill out a nationwide network of processing centers.

Solutions can be provided insourced, outsourced or co-sourced, depending on the need, utilizing WAUSAU's best-in-class software. In the end, financial institutions of all sizes will be able to offer services that they could not support if a large capital investment was required.

"All of these pieces are working together to provide financial institutions more options to serve their clients," said Gibbons. "Our competitive advantage is our ability to combine geographic reach, solid expertise, individual customization and speed of service to benefit our clients."

A reinvented company

Today, approximately one in three remittance payments goes through a WAUSAU system, and the company is recognized as the leader in remittance processing. The company is leveraging its technological heritage and using innovation and aggressive execution to allow clients to focus on their core strength - helping their customers succeed.

"Our areas of focus include moving branches toward going completely paperless, providing an integrated receivables hub to boost speed and efficiency of processing payments, and giving financial institutions their best shot at targeting highly profitable vertical markets," Delgadillo said.

The paperless branch is especially popular as the concept of "going green" gains traction. All areas of the branch can be targeted for transition to electronic payment capture and data transfer, including new accounts, the teller line, back office, safety deposit box and ATM.

"A truly paperless branch boosts productivity and customer satisfaction while helping the environment and bringing ROI within 12 months," said Todd Juracek, President, Enterprise Payments Group.

WAUSAU has already guided several banks on their journey toward going paperless, and more information about the Paperless Branch concept can be found at www.paperlessbranch.com.

WAUSAU is also committed to providing an integrated receivables hub based on its market-leading technology. Today's consumer demands the ability to make payments in multiple channels - check, cash, card, ACH, wire, mobile, online and more. A consolidated receivables system can significantly lower processing costs generated by outdated legacy systems and make new services available to business customers.

The hub extracts, captures and moves payments, manages exceptions and returns, and provides consolidated outputs, all with less cost and more speed. It offers near real-time visibility of cash position and interfaces well with banks and corporations' systems, generating analytics that allow for better business decision-making.

WAUSAU's integrated receivables hub permits financial institutions to target industry segments such as property management firms, health care, insurance and utilities, all of which have receivables challenges. If well served, these markets can be incredibly important to an institution's deposit base and ultimately improve shareholder value, a key reason WAUSAU has made a significant investment here.

The evolution of WAUSAU Financial Systems in all these areas will become manifest in a renewed company Web site, to be unveiled in December at www.wausaufs.com.

"Financial institutions that offer comprehensive solutions will be viewed as consultative partners, differentiating themselves from other banks, which is critical today," Delgadillo said. "WAUSAU Financial Systems is now delivering upon its vision to transform payments, deposits and documents into strategic assets that drive profitability."

About WAUSAU Financial Systems

WAUSAU Financial Systems is a premier provider of payment and receivables processing solutions, helping businesses of all types move money faster. With its products, services and consulting, WAUSAU works with customers to speed check processing, electronic presentment, ACH payments, transaction processing, distributed capture and enterprise content management. WAUSAU holds the No. 1 market share position in retail and wholesale remittance processing solutions. WAUSAU processes more than $1 trillion in payments each year through its work with more than 650 organizations, and maintains more than 30 percent of all U.S. lockbox volume. The company works with 13 of the 25 largest financial institutions, 42 percent of insurance companies with more than 5 million customers and 24 percent of utilities with more than 100,000 customers. More than 200 financial institutions use WAUSAU's remote deposit capture service, and industry consultants Celent and Aite have ranked WAUSAU's remote capture functionality above all competitors. For more information, visit www.wausaufs.com.

for WAUSAU Financial Systems
Don Klein
(414) 319-5700
donklein@zizzogroup.com