Lock box business increasingly outsourced?

It's not seen as alluring or fashionable in any way: The lockbox business just doesn't get a lot of press. But the reality is that a lot of companies still process checks the old-fashioned way. There has been a big move--led by Metavante and Wausau--to bring more technologically advanced solutions to the market, such as tools to read paper instructions and process paper electronically.

Smaller banks are also looking to move upstream in the market. Indeed, the thin margins, rote tasks, combined with the technology emphasis may make this an area ripe for outsourcing at more places. We're starting to see that at big banks, which tend to view it as a commoditized service.

Citi just announced it will outsource the core processing elements to First Data, which will hire much of Citi's internal lockbox staff. JPMorgan Chase just announced that it has sold its retail lockbox unit to IT-provider 3i Infotech, which has operations in Mumbai and Indiana. It owns the largest outsourced remittance processing operation in the country.

Related Articles:
One way to goose mobile payments
New approaches to consumer check deposit