When pressed, Randy Shelden says the most definitive change in the correspondent banking business at Cornerstone Bank, York, Neb., occurred with the advent, nearly five years ago now, of image exchange. "Historically, we'd developed relationships that were rooted in geography, but image took away those boundaries and made it possible to work anywhere. That was when you started to see a longer more formal process around contracts," says Shelden, who is senior vice-president for the $680 million assets, family-owned bank with 29 banking locations in 20 communities. Not that the practice of banks doing payments-, cash management-, or lending-related work on behalf of other banks hadn't been a maze of operational details by tradition. It was just that, in the case of item processing work done by Cornerstone for a slew of banks throughout the state as well as clients in neighboring Wyoming and Colorado, a handshake alone would no longer suffice. Imaging as a technique requires extensive service level agreements (SLAs) that have to be evaluated several times before the work is handed over. Additional quality controls are required. "This business is more formal now," Sheldon observes. While different niches in the complicated, interconnected universe of correspondent banking have been affected by disparate drivers, the payments and operations sector, which is the historical backbone of the business, has seen significant change in the past five years.
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