Digital Insight, PSCU Financial Services In Deal On Call Center, Reselling

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Digital Insight Corp. and PSCU Financial Services have entered into a partnership that includes a number of components and which is aimed in part at shoring up profitability within Digital Insight's Lending Division.

Digital Insight will outsource its Sacramento, Calif.-based call center operations to PSCU Financial Services, while PSCU-FS has agreed to license Digital Insight's loan origination system, DeskTopLender Premium. Under the terms of the latter agreement, PSCU-FS has committed revenue streams to Digital Insight from remarketing Digital Insight's DeskTop Lender Premium and related lending products to PSCU Financial Services clients and prospects.

In addition, PSCU Financial Services will resell Digital Insight products to clients and prospects, naming Digital Insight as a preferred provider of Internet banking, business banking and lending solutions. In a statement, online banking provider Digital Insight expects the alliance to drive material improvements in operating profitability within its lending division and significantly expanded distribution for its other product lines.

Under the agreement, St. Petersburg, Fla.-based PSCU Financial Services will serve as Digital Insight's exclusive provider of 24 x 7 call center support services to Digital Insight's Contact Center and Branch Services clients. In addition, PSCU Financial Services will be Digital Insight's preferred provider for Tier 1 consumer Internet Banking customers. Digital Insight said it expects to realize more than $1 million in annualized cost savings as a result of the move, and will refocus on its core lending, consumer Internet banking, and business banking technology platforms. The company will begin migrating current clients to PSCU Financial Services' multimedia-capable call centers in December 2005, with a target of completing the transition during the first quarter of 2006.

Digital Insight expects to record one-time exit cost of approximately $1.9 million related to the shut down of its call center operations

PSCU Financial Services is licensing the Digital Insight lending solution and has entered into an agreement to resell all three Digital Insight product lines-consumer Internet banking, business banking (ASP) and lending-into its prospect and client base. The agreement includes monthly minimum payments that ensure a guaranteed revenue stream for Digital Insight.

The agreement also includes a provision that permits PSCU Financial Services to co-fund future enhancements to Digital Insight's lending platform in exchange for an increased share of product revenues resulting from sales to PSCU Financial Services clients.

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