Pilot Program Proves Successful for Federal Reserve Bank of Minneapolis and ImageSoft Technologies.

MAITLAND, Fla.--(BUSINESS WIRE)--Sept. 9, 1999--

Image Initiative at Helena Branch Creates

New Archive and Returns Functionality

ImageSoft Technologies, a unit of Fiserv, Inc. (NASDAQ:FISV), and the Helena Branch of the Federal Reserve Bank of Minneapolis today announced the successful implementation of a test-of-concept pilot program for an image-enabled electronic check presentment and returns system.

The new system creates a fully integrated check clearing process for capture and archive of check images and the handling of exception items for the Federal Reserve branch and its customer financial institutions. The image system support for the project was produced through a concentrated development initiative. The resulting system expands the existing functionality in the ImageSoft Titan suite of applications.

Sam Gane, Helena Branch Manager, said the successful implementation represents the next major step in an ongoing Federal Reserve project toward streamlining and making more efficient the check presentment and clearing process, as well as reducing risk on returned items.

"The research that we've done - through focus groups and surveys - has indicated that electronic check presentment (ECP) is most appealing to our customers when it is image-enabled," Gane said. "From that starting point, we've developed, with ImageSoft, a system which provides a wide variety of options for check presentment and clearing, truncation and returns processing."

The program - called Electronic Presentment Image Check, or EPIC(TM), by the Helena branch - is now providing a wide variety of services to customers throughout Montana. They include partial and full truncation options, MICR presentment and bulk image delivery.

"The benefits to the customer are numerous - decreased item processing cycles that reduce return item risk; reduced transportation costs; fewer notices of nonpayment; and better customer service and efficiency. With these sorts of positives, our customer base has been very receptive," Gane said.

According to Paul Drake, Assistant Vice President of the Helena branch, the focus groups produced a representative cross-section of Montana financial institutions that said image availability was critical to acceptance of electronic check presentment.

"Previously, electronic check presentment initiatives hadn't failed because of the charges associated with them. They had failed because of the lack of available information about the check. Customers told us very clearly that image-enabling the items could solve this problem," Drake said.

Now the Helena branch is fully image-enabled and runs a prime pass capture on an average of 700,000 items per day. These images are archived within the Titan system and made available to customers for query and viewing. The Helena branch will hold the physical items for 60 days for accounts that choose to truncate. The images are retained in a seven-year archive stored over three tiers of magnetic media.

The system also allows access to check images via the Internet through the Titan InternetDirect offering, provides CD-ROMs and has day-one online access for payment decisions through the Image-enabled Decision Support application.

The Helena EPIC team's access to ImageSoft's technicians was instrumental in the successful development of the system.

"We had a very positive experience working with the ImageSoft team. As a new project, a lot of the functionality that was ultimately delivered was thought of as the project progressed. The communication between the Helena and ImageSoft teams made the project work more smoothly," Drake said. "We were familiar with the technology and the staff and had full confidence that ImageSoft could provide what we were looking for and to do so in the aggressive time-line we had in place."

According to Ted Umhoefer, Senior Vice President of the Federal Reserve Bank of Minneapolis, the successful testing of this pilot will resonate throughout the Federal Reserve System.

"This new system vastly improves the check payment system to be one of efficiency, effectiveness and reduced risk for all parties - for each financial institution involved in the transaction and for the Federal Reserve. Naturally, it has applicability for all Reserve banks. The success of this test-of-concept pilot program is being closely watched by all other districts within the Reserve System," Umhoefer said.

The relationship between ImageSoft and the Federal Reserve Bank of Minneapolis - Helena is the bank's sole branch - was critical to the Federal Reserve's comfort level with ImageSoft.

Umhoefer said the Montana branch was chosen for the pilot program for a number of reasons: The Helena branch has a strong and trusting relationship with customers, demonstrated by a high market penetration for transit items. The Helena customers have also proven receptive to ECP in the past, with more than 30 percent opting for such transactions.

Further, there are geographic considerations. The rural geography and demographics of Montana provide manageable volumes within a sparsely populated region, resulting in an environment that will gain the maximum benefit from an image-based returns system.

"The remoteness of some of the locations made the transportation of physical items expensive and time-consuming. Also, the banks that we surveyed and spoke to were very receptive to new technology and willing to work with us on its development. It was definitely a collaborative effort," Drake said.

One customer of the EPIC program is MountainWest Bank, a $190 million community bank in Helena that has implemented the new image-based system.

MountainWest Bank Cashier Security Officer Janet Clark said the benefits are clear. "With more timely processing of items, we can respond more quickly to people who write bad checks. The image-based return system has allowed us to reduce loss to our customers by reacting in a more timely and efficient manner. The reduced float time has made a big difference for us," Clark said.

With the Fed system in place, more than 70 percent of MountainWest customers are choosing truncated accounts. "The reduction in paper and time has been really amazing," Clark said.

Ron Thompson, President of ImageSoft Technologies, believes the Federal Reserve System demonstrates an ongoing and real commitment to efficiency and forward-thinking decision making.

"We've always felt that the Minneapolis district has demonstrated a strong willingness to adopt new technology. Our relationship with this organization has become a cornerstone of our business at ImageSoft. Through our association with Minneapolis and the seven other Fed districts we serve, we have had the opportunity to advance our product line with their assistance and develop a detailed knowledge of the operation of our national monetary system. This has resulted in this groundbreaking new system. We are proud of our involvement with EPIC and hope to expand this relationship with the Minneapolis district and the rest of the Federal Reserve System," Thompson said.

The Titan suite of image-enabled solutions is currently installed at eight of 12 Federal Reserve districts and 27 of 45 check processing locations.

ImageSoft Technologies, a Fiserv unit based in Maitland, Florida, has been providing imaging solutions to the financial services industry since 1989. The company has maintained industry leadership by building dynamic, real-world, image-based solutions for financial services organizations of all sizes, including banks, thrifts, credit unions, brokerage and mutual fund companies, and service bureaus. ImageSoft software is currently in use by hundreds of financial institutions and other businesses in the U.S. and abroad.

Fiserv, Inc. (NASDAQ:FISV) is an independent, full-service provider of integrated data processing and information management systems to the financial industry. As a leading technology resource, Fiserv serves more than 10,000 financial service providers worldwide, including banks, broker-dealers, credit unions, financial planners/investment advisers, insurance companies, mortgage banks and savings institutions. Headquartered in Brookfield, Wisconsin, Fiserv also can be found on the Internet at www.fiserv.com.