Scottsdale, Ariz.-based Choice Bank announced it now has full electronic cash letter (ECL) settlement capabilities with the Federal Reserve through the expanded resources of their current item processing platform - Open Solutions' electronic image/item processing solution - making the institution the first bank in Arizona to leverage ECLs for settlement.
Open Solutions (NASDAQ: OPEN), a provider of integrated relational technologies to banks and credit unions across the United States and Canada, offers an entirely imaged-based outsourced item processing services solution allowing financial institution branches and their merchants to capture images of checks from anywhere in the country and deposit image cash letters to the Federal Reserve. The Fed's image cash letter settlement solution gives financial institutions the capacity to decrease transportation costs and improve funds availability through electronic check clearing. The result is a reduction in each financial institution's transportation and clearing costs and an improvement in funds availability.
Choice Bank, which has $110 million in assets and approximately 5,000 customers at its two branches, has been an Open Solutions outsourcing customer since 2003. And the institution has the distinction of being the first bank in Arizona to use electronic cash letters. With Open Solutions as the technology provider, Choice Bank believes it is on the leading edge. "The industry is moving in this direction," said Pamela Chan, executive vice president and CFO at Choice Bank. "By using Open Solutions' ECL feature, we are able to improve funds availability from 90 percent to 99.9 percent."
The bank's former process involved sending the paper items by courier to the airport to fly them to the Fed at Los Angeles. Those items can now be posted and collected faster.
"This new process enables us to get our funds one to two days sooner than we were getting it when we processed paper deposits," Chan added. "It is rare to find that capability at a community financial institution. Other benefits we recognized include integrating check images for better disaster recovery capability, eliminating courier transportation costs and most importantly, providing our customers the check images through online banking. We have forecasted a payback on this investment in less than 18 months. Through our relationship with the Fed and with Open Solutions, we were up and running on FedForward Image Cash Letter in a few months and are now working on FedReturnsm and FedReceiptsm for quicker returns and fraud exposure reduction."
Open Solutions Chairman and CEO Louis Hernandez, Jr. said, "We have offered Choice Bank not only the option to become the first bank in its federal reserve district to submit electronic cash letters, but the confidence to do so, as well. There is a demand for cost-effective item processing and settlement options at community financial institutions. Image-based item processing, levels the playing field for our clients to compete globally, regardless of size, charter or geographic location. Open Solutions will continue to offer our client institutions choice and innovative technologies that resolve mission-critical business concerns."
About Open Solutions Inc.
Open Solutions Inc. offers a fully featured strategic product platform that integrates core data processing applications built on a single centralized Oracle relational database, with Internet banking, cash management, CRM/business intelligence, financial accounting tools, imaging, Check 21, interactive voice response, network services, Web hosting and design services, and payment and loan origination solutions. Open Solutions' full suite of products and services allows banks, thrifts and credit unions in the United States and Canada to better compete in today's aggressive financial services marketplace, and expand and tap their trusted financial relationships, client affinity, community presence and personalized service.
For more information about Open Solutions or its financial product line, contact Mickey Goldwasser by email at mgoldwasser@opensolutions.com by phone at 860.652.3153 or via fax at 860.652.3156. Visit Open Solutions' Internet site at www.opensolutions.com.