Commercial Federal Bank of Omaha, Neb., has renewed its outsourcing contract with Fiserv Inc.
The Brookfield, Wis.-based technology firm has also renewed its ties with Omega Financial Corp., State College, Pa.
Details of the contracts were not disclosed.
Under the agreement, the $5.4 billion-asset Commercial Federal will continue to use Fiserv for its core applications processing from its data center at Arlington Heights, Ill.
'Intensive Study'
But before renewing, Commercial Federal conducted a six-month study on whether to continue outsourcing.
"The results from our intensive study of four other third-party service providers indicated that Fiserv could offer the best solution," said William A Fitzgerald, chief executive of Commercial Federal.
And, like many community banks, Omega - a Fiserv client since 1986 - also reconsidered its outsourcing arrangement.
"We did an analysis," said David B. Lee, chairman and chief executive of Omega. "As we went forward, we decided that it would be more beneficial to outsource."
Fiserv has been responsive, Mr. Lee added. "We ask them for changes and they tie in our suggestions."
Omega Financial recently acquired three affiliates of the former Penn Central Bancorp. The bank operates 40 branches in central Pennsylvania.
About 41% of community banks and thrifts use service bureaus for their data processing needs, according to a study conducted by M. Arthur Gillis, of Computer Based Solutions, New Orleans.
"In the old days, small banks would outsource, big banks would not," said Mr. Gillis.
He predicted that outsourcing among larger banks may become more common, although he conceded that won't happen overnight.
"In the past, to turn anything over to a third party was an admission of incompetence," said Mr. Gillis. "That's hogwash today. Today's banker is a cost-conscious banker."
