HOUSTON — Working directly with the Federal Reserve Bank has given JSC FCU better control of its item processing, saved money, and eliminated worry over recapitalizing the corporates.
"Toward the beginning of 2010 we decided to look at our options for moving item processing away from Southwest Corporate, mainly due to our concerns with possibly being forced to recapitalize it," explained COO Paul Maslonka. "We wanted to move to the Fed before anything like that possibly happened."
JSC already had a relationship with the Federal Reserve Bank in Dallas for ACH processing and partnered with Bluepoint Solutions to handle the intermediate steps, such as imaging of items, bundling those into a cash letter, and item removal.
Maslonka termed switching over to the Fed "fairly seamless. There is now some extra ease with regard to item processing research, such as pulling check images and doing error correction. There is an advantage of not relying on a third party."
The change also enabled the $1.5-billion credit union to afford additional functionality that has improved the credit union's efficiency. Maslonka estimated JSC saves $10,000 a month on item processing, which more than covers additional costs for Bluepoint's Receipt Manager and teller capture products, which moved capture of Check 21 items to the teller lines and out of the back office. "We got rid of the middle man, increased efficiency, and saved money."
Some extra staff hours, two to four hours total each day, are required to handle tasks previously managed by Southwest, such as error correction and posting. Maslonka said two people handle those duties.
The 120,000-member JSC, which processes about 15,000 checks per day, took about eight months in total to switch over to the Fed, which happened in the last quarter of 2010. "That included time to make the decision and do the research. We could have shortened that time if we were under the gun. But we had time, so we took it."
Maslonka addressed the "major components" in making the switch. "First was coming to an agreement with the Fed to do item processing. In our case we already had an agreement with them for ACH, so that relationship existed. It would take additional time, maybe a month to 60 days, for an institution that does not already have a relationship with the Fed."
Second, JSC had to find and item processing vendor to handle the processing of items between the core system and the Fed, choosing Bluepoint. Third, JSC had to coordinate with its core system provider (Harland Ultradata) to facilitate changes that needed to be made on their end. "Then we needed to make sure our home banking vendor would be able to accommodate pulling images from a new archive at the Fed."
