1. An Introduction to Check 21 by Jaguar Software

2. The Bill HR 1474 passed by Congress October ’03. Signed into law by President Bush October 28 th 2003, with an go-live date of 10/28/04. Legalizes the use of “substitute checks” as a legal equivalent of actual check items. Forms the legal basis of image presentment and clearing. Encourages the use of image based item processing. DOES NOT MANDATE IMAGE EXCHANGE

3. What it means for you You don’t have to change anything You can take time to educate yourself on Check 21, imaging solutions and how all this will benefit your bank You can develop a sound item imaging strategy You can ease your way into imaging

4. Comparison - Before Items are received from the FED (courier service) Items are proofed (single pocket proof) Items are posted to the core system Items are microfilmed (microfilmer) Items are shipped to the FED (courier service) Items are fine sorted (reader/sorter) Statements are prepared (employees) Statements are printed (Laser printer)

5. Comparison - After An electronic file is received from the FED (FED Import module) OTC items are captured and proofed (Capture module/Repair module + check scanner) Items are posted to the core system (POD module) Electronic cash letter is transmitted to the FED (POD module) Statements are printed (Statement module + high speed printer and possible folder/inserter )

6. Available Resources www.aba.com www.bankersonline.com www.icba.org www.federalreserve.gov

7. Considerations 1.How and to what extent will check imaging impact your bank? 2.What level of imaging is suitable for your bank and how can you get started? 3.How does all this work in conjunction with your core processor, datacenter and the FED ? 4.What are the true benefits of check imaging?

8. The impact of imaging Advantages: Potentially significant operational savings Dramatic time savings Tighter integration of front and back office Drastically improved fraud detection and prevention Greatly improved research capabilities with full network integration

9. The impact of imaging Challenges: Paradigm shift = staff re-education Few short-term labor savings Requires additional IT resources and PC hardware Has to be handled as a long-term strategic decision (education, evaluation, due diligence)

10. What level is right for you? Microfilm Replacement FED capture Full POD Branch capture with/without data center integration Full integration (Internet banking, E- Statements, Check conversion and presentment)

11. How to get started Set up imaging committee Develop imaging strategy (what? when? where?) Evaluate imaging vendors based on the following criteria: Ease of use/flexibility Reliability/customer satisfaction Technological standards Cost/ROI Expertise/Personnel

12. Compatibility The FED COF standard will be replaced by x9.37 Common file formats governed by the FED (through the ANSI X9 committee) will enforce compatibility between vendors, the FED and third-party exchange endpoints TIFF and JPEG have already been established as the de facto standard for image capture with PDF as the format of choice for electronic document delivery

13. True benefits Increased productivity for both front and back office operations (POD, research, statement preparation and delivery) Less courier service/postage fees Less dependence on the Federal Reserve More operational flexibility You will avoid future regulatory cost Allows individual financial institutions to offer additional merchants services

14. Thank you For additional information on Check 21 contact Jaguar Software at 1-888-JAG-SOFT Or Sascha@jaguarsoftware.com