Mid-Missouri begins in-house data, item processing for banks

When Mid-Missouri Banc-shares Inc. began looking at bringing data processing and item processing in-house, the company intended to service only the three banks within the organization.

But once the project got under way, company officials decided to offer those services to non-affiliate banks in the area.

Mid-Missouri Tech Center LLC, a subsidiary of Mid-Missouri Bancshares, recently held an open house to showcase the new facility at 1619 E. Independence St. Its affiliate banks are Webb City Bank, Mid-Missouri Bank and First National Bank.

The company "provides all the services, software, equipment, training, hardware and personnel that financial institutions need (in order) to offer their customers the latest in banking technology," according to Mid-Missouri spokesperson Diane Mammorella.

The tech center offers a "cafeteria-style plan," which allows banks to choose only the services they need.

"We weren't happy with the lack of control we had over the process and wanted to bring that in-house so we could exert greater control over customer service and pricing," said Mark Maples, vice president of Mid-Missouri Bancshares.

The company began doing due diligence about 2 1/2 years before the contract with its former data processing firm expired. The cost of continuing to outsource data processing and item processing was weighed against the cost of bringing the process in-house, including the expense of software, hardware, personnel and the ability to house the operation. It was decided that it was feasible to bring the entire process in-house and "to have the data processing operation and the item processing operation really linked," Maples said.

Mid-Missouri Tech Center is currently servicing Webb City Bank. Mid-Missouri Bank and First National Bank will come on board when their contracts with other data processing organizations expire in June. The tech center also is now proofing the work of one non-affiliate bank.

"We want to make sure that we've lined out all the procedures and worked out the bugs with our banks before we begin offering those services to anybody else," Maples said.

The idea of offering the community a clearing center for financial institutions is not new, according to Mammorella. In the 1930s, area banks joined forces to process items, checks and deposits, and to disperse funds to the banks through a common processor, Union National Bank, which later became Boatmen's Union National Bank. Boatmen's merger with NationsBank marked the end of the clearinghouse.

Mid-Missouri Bancshares wants to revitalize that concept, according to company Vice President Gary Jordan. "That will eliminate a lot of items going to upstream correspondents," he said. "Local items will stay local," float time will be greatly reduced and availability for banks depositing items will be increased.

"Until Mid-Missouri Tech Center opened, banks were forced to send items to clearing centers outside of the area," Mammorella said.

"In addition to doing the processing for our bank, we want to provide data processing to a limited degree and item processing and ancillary services to non-affiliate community banks ... focusing on the entire processing process beginning with the proofing of teller work, progressing to item capture and processing, bookkeeping services, cash letter services and statement rendering," Maples said.

The tech center also will market data processing services.

Banks have two options for data and item processing, Maples said. They may process in-house, which can be a costly option for smaller banks or they can outsource their services.

What sets the tech center apart from service bureaus banks currently use, Maples said, is that "we are bankers that are performing processing for other banks as opposed to other businesses which are primarily data processing in nature they don't have a lot of experience in banking other than they're doing data processing for banks. We know what bankers are feeling, the issues they're dealing with, and we can provide data-processing and item-processing solutions geared specifically to them."

Business Software Solutions in Nixa worked closely with Mid-Missouri Tech Center to provide the technical services needed to get the center running, according to Mammorella. The company provided everything from software and hardware recommendations to installation of all computer technology.

The tech center has a data processing and training area; a proofing, research and adjustments/transportation area; and a department for bookeeping, statement rendering and item processing, as well as a mailroom. The top floor of the tech center houses the offices of Mid-Missouri Bancshares Inc.

"We don't have to outsource any part of our operation," Maples said. "This is where the buck stops, if you will, for our banks as well as for other banks."

"Establishing this type of office in Springfield was very important to Mid-Missouri Bancshares Inc.," said Lee Gilbert, chairman and cheif executive officer.

"We are very much a community banking organization. Not only are Mid-Missouri Tech Center customers important to us, but their customers are very important to us, too."