Affiliated Computer Services Inc. announced a restructuring of its outsourcing business lines in order to focus better on banking and electronic funds transfer services, its fastest-growing market segment.
As part of its reorganization, Dallas-based ACS created an outsourcing technology group dedicated to serving nonbank customers. Previously, the company's outsourcing resources had been used across all industry segments.
With the banking/EFT segment rapidly growing, the decision was made last week to split off nonbank outsourcing, said Thomas M. Rouse, executive vice president in charge of the company's banking/EFT division.
This will let the company put resources and expertise in areas where they're most useful, he said. For example, banking experts in the general outsourcing group have been redeployed to the banking/EFT division.
Affiliated serves more than 600 financial institutions, including credit unions, thrifts, and commercial banks. The company offers EFT and bank processing, including core processing services for checking and savings accounts, loan servicing, back-office operations, and statement rendering.
It decided on the importance of strengthening its focus on banking and EFT because of the division's "phenomenal growth" in the past couple of years, said Mr. Rouse.
In 1993, the company had 1,500 automated teller machines in its network. The total had grown to 2,200 by the end of 1994, and today, 3,400 ATMs are in the network, ranking Affiliated second only to Electronic Data Systems Corp. - with about 5,300 ATMs - among nonbank companies' networks.
Affiliated owns 1,400 ATMs and acts as a service bureau for the remainder in its network. Mr. Rouse said the company has an initiative underway to place 3,000 to 5,000 ATMs in convenience stores and supermarkets during the next 18 months.
Besides increasing the number of ATMs in its network, the banking/EFT division will offer value-added services, such as check authorization and point of sale credit/debit services, said Mr. Rouse.
Much of what Affiliated plans for its banking division is an outgrowth of services the company sells to former financial institution customers of New York-based Nationar.
Nationar, a trust company that relied mostly on its check-processing business for revenue, was seized in February by the New York State Department of Banking after liquidity problems prevented it from meeting daily obligations.
In March, Affiliated announced completion of an agreement to provide item-processing services to the 310 banks, thrifts, and credit unions that had been processed by Nationar. This gave ACS, which did processing for banks mostly in the Southwest, an opportunity to expand into the Northeast.
Affiliated's officials also pointed to the acquisition of McCoy Meyers and Associates, an Amarillo, Tex.-based software firm that has developed Unix banking systems for more than 100 clients. The acquisition will enable ACS to provide in-house and service bureau processing solutions throughout the U.S., said Mr. Rouse.
Affiliated's new outsourcing technology group will be headed by Henry G. Hortenstine, executive vice president.
The new unit, representing almost 60% of the company's revenues, will focus on customized client-server technologies for businesses.
An important part of the organization will be the newly formed technical assistance center, which will provide network security and management, disaster recovery, and help-desk services, officials said.
