Advanced Financial Solutions Announces ``AFS OPeRA'' - A Technology Breakthrough for Remittance and Lockbox Processing.

Business Editors

CHICAGO--(BUSINESS WIRE)

Aug. 5, 2002

AFS OPeRA Determines the Best Method For Presentment and Processes

the Item For Least Cost and Best Availability

Advanced Financial Solutions, Inc. (AFS), a premier provider of image-based remittance processing solutions for retail, credit, banking, insurance, energy, transportation, and government operations, today announced the release of AFS OPeRA (Optimum Presentment for electronic Remittance Automation), a comprehensive new approach to remittance and lockbox processing and presentment. AFS OPeRA automatically determines and executes the best method of presentment for each and every remittance item processed, ensuring the lowest processing costs, fastest funds availability, or both.

One of the factors that led to the development of AFS OPeRA was the enactment of the new NACHA ARC (Account Receivable Entry) operating rules that govern the processing and handling of electronic checks (also known as "e-checks"). The new NACHA ARC rules, effective as of this past March 15th, are expected to substantially reduce payment-processing costs by allowing checks delivered to remittance and lockbox locations to be converted into e-checks through the Automated Clearing House (ACH) Network. An e-check is a one-time electronic debit to a checking account that is initiated through the accounts receivable application, at the point of purchase (POP), or on the Internet (WEB), or over the telephone (TEL) and processed through the ACH Network. E-Checks are covered by the Federal Reserve's Regulation E, which defines specific protections from error and fraud.

AFS OPeRA is designed to address both the current and emerging realities of payment processing. AFS OPeRA features an automated process that uses a parameter driven rule-set to make real-time presentment type and pocket assignment decisions based on the lowest cost, and best availability as the item passes down an image transport track during its first pass, eliminating the need for a second pass on a large percentage of the checks. AFS OPeRA identifies which checks are eligible for ACH ARC electronic conversion, which ones are eligible for check image truncation, and which ones continue down the path of traditional paper check processing. AFS OPeRA incorporates Thomson Financial Publishing's EPICWare to validate MICR line data, which significantly reduces costly ACH transaction failures, notifications of changes (NOCs) and administrative returns. This process results in a vast reduction of exception items while simultaneously improving collection rates and funds availability. In addition, AFS OPeRA utilizes an internally developed database that houses a history of check information -- routing and transit, account numbers, non-conforming return items, and other field identifiers that will designate certain checks as "non-convertible" to ARC, or to check image truncation, or both. This database also serves as the "opt-out" file for customers who choose not to participate in electronic check conversion or check image truncation.

AFS OPeRA reviews every remittance check payment as it is received and through custom rules automatically determines the optimum presentment for payment -- paper check, converted to ACH Debit / ARC e-check, or truncated and settled through a 3rd party check image exchange, such as Endpoint Exchange. AFS OPeRA eliminates delay of deposits and will save Remittance and Lockbox departments thousands of dollars per month. Customers will gain further savings through RCK (Re-Presented Check Entry), which converts "insufficient funds" paper check returns to electronic ACH return items in order to facilitate expedited collection.

AFS OPeRA will have Remittance and Lockbox departments capturing, reading, and processing checks are soon as they are received. Risk management is enhanced by having the checks immediately available for ARC conversion or check image truncation, greatly reducing the risk of fraudulent checks and funds availability delay.

"AFS OPeRA is breaking new ground and setting a new standard of excellence for remittance payment processing. AFS OPeRA is the industry's first and only remittance payment processing solution that automatically determines the best method for presentment, and processes that item for least cost and best availability," said Ken Pausche, AFS Remittance General Manager. "Our AFS OPeRA customers will also realize greater efficiency and lower costs for return item handling, faster collection of funds, and be able to take advantage of later presentment deadlines."

"AFS OPeRA is a great fit for every Remittance and Lockbox Department around the country," said George Rees, AFS Remittance Product Manager. "The basic workflow methodology is unsurpassed. In five easy steps AFS OPeRA does everything from open, prep, and capture the payment to saving the image in the archival database. In between it reads, and parses the payment, checks all options for best presentment, and then balances, formats, and uploads the data. AFS OPeRA is designed to meet the future head-on and process all remittance and lockbox payments at optimum efficiency, expediency, and profitability."

Numerous studies have shown that the widespread use of electronic payments would save the U.S. economy tens of billions of dollars a year. The Federal Reserve, in its landmark 2001 study on the U.S. payment system, concluded that electronic payments now play a far more important role in the payments system than previously believed. Over 115 million consumers and four million businesses use electronic means to move funds on a regular basis, and these numbers are expected to grow as electronic payments continue to experience double-digit growth rates.

AFS will be presenting AFS OPeRA at the TAWPI Conference in Room #324, on level three of the Navy Pier in Chicago on Monday, August 5, 2002 at 10:30 AM.

About Advanced Financial Solutions

AFS is a leading provider of image-based processing, payment, and transaction software technology for companies engaged in banking, retail, energy, insurance, transportation, credit, and government operations. An international company with offices around the world, AFS software programs and applications process checks and items for nearly 13% of the world's financial institutions. One of the nation's fastest growing private companies for four consecutive years according to Inc. Magazine, AFS provides customer solutions that improve productivity, flexibility, efficiencies, and service levels. Gary Nelson, President and CEO of AFS, was selected as the Southwest Area's Ernst & Young Technology Entrepreneur Of The Year. Visit AFS on the Web at www.afsimage.com.