Fiserv, (NASDAQ:FISV) continues to drive the industry in the development of image-based clearing systems – surpassing 600 clients for its Fiserv Clearing Network (FCN) and more than 30 million monthly electronic transactions for its Virtual Item Exchange solution.
Fiserv, the nation's largest third-party check processor, was at the forefront of development in systems related to Check 21 when it created the Fiserv Clearing Network as an alternative to check clearing organizations such as the Federal Reserve System. In addition, Virtual Item Exchange from Fiserv ITI, with a current client base of more than 350 financial institutions using both in-house and outsourced processing, enables banks to reap all the benefits of image exchange by easily sending image files to the Fiserv Clearing Network or other clearing organizations.
The Fiserv Clearing Network leverages the efficiencies created by image-based check clearing and drives down costs by aggregating the volume of its member institutions primarily sold from within the company's existing 7,000 clients for either core or check processing.
Tom Warsop, Fiserv group president for financial institutions, acknowledged it's rare to find a product that can provide such significant cost benefits for clients. In many cases, financial institutions are reducing their clearing bills by as much as 15% or 20% by switching to the Fiserv Clearing Network, he said.
"Fiserv developed the Fiserv Clearing Network and Virtual Item Exchange to help our clients prosper in this age of electronic checks," Warsop said. "We believe our solutions can meet the needs of all financial institutions in the image exchange world."
Fiserv projects further significant growth for both the Fiserv Clearing Network and the Virtual Item Exchange. The latter is growing at a rate of 2.5 million transactions a month, meaning it should exceed 50 million monthly transactions by December, said Tom Neill, Fiserv group president for depository institutions.
"We think we have a unique business model - one point of contact for the financial institution with all the benefits of image exchange," Neill said.
Fiserv is a gateway to the leading image exchange networks, including Viewpointe and Endpoint Exchange LLC. That means financial institutions need to join only the Fiserv Clearing Network to gain low-cost access to all possible image-exchange endpoints.
"Viewpointe is proud to count Fiserv among its industry connections," said Diane Scott, chief sales, marketing and product officer at Viewpointe. "All financial institutions must get connected to image exchange networks - regardless of which one they choose - to keep pace with check electronification."
Jon Johnson, president of the Bank of Salem, a $201 million bank in Salem, Ore., said he has spent time convincing other banks to join the Fiserv Clearing Network.
"In addition to appreciating the cost savings, I can relax, knowing our bank is positioned for the future of image exchange," said Johnson, whose bank has been a member of the Fiserv Clearing Network for two years. "And it is great to know that my costs will go down as more banks join FCN, since in-network costs to clear checks between FCN members are the lowest in the industry."
Clients of Virtual Item Exchange have enjoyed similar benefits. "It has given us the opportunity to be at 100% of same-day funds availability," said Rosie Hinojosa, vice president of $126-million Rio Bank in McAllen, Texas. "We have also gained efficiencies in many areas of item processing, enabling us to reduce courier and labor costs. Plus, Virtual Item Exchange gives us the ability to offer later daily cutoff times, which is a great benefit for our customers."