<PAGE>

================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

                                       OR

[ ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

            FOR THE TRANSITION PERIOD FROM __________ TO ___________

                        COMMISSION FILE NUMBER: 001-31254

                              THE BISYS GROUP, INC.

             (Exact name of registrant as specified in its charter)

             DELAWARE                                             13-3532663

(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

                       90 PARK AVENUE, NEW YORK, NEW YORK
                                      10016

                    (Address of principal executive offices)
                                   (Zip Code)

                                  212-907-6000

              (Registrant's telephone number, including area code)

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS REQUIRED
TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DURING
THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE REGISTRANT WAS
REQUIRED TO FILE SUCH REPORT(S), AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.

YES [X] NO [ ]

INDICATE BY CHECK MARK WHETHER THE REGISTRANT IS AN ACCELERATED FILER (AS
DEFINED IN RULE 12b-2 OF THE EXCHANGE ACT).

YES [X] NO [ ]

INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE:

AS OF OCTOBER 29, 2004, THERE WERE 120,221,657 SHARES OF COMMON STOCK, PAR VALUE
$0.02 PER SHARE, OF THE REGISTRANT OUTSTANDING.

                        This document contains 25 pages.

================================================================================

<PAGE>

                              THE BISYS GROUP, INC.
                               INDEX TO FORM 10-Q

<TABLE>
<CAPTION>
                                                                                                                           PAGE
<S>                                                                                                                        <C>
PART I.  FINANCIAL INFORMATION

         Item 1.  Financial Statements

                  Condensed Consolidated Statements of Income for the three months ended September 30, 2004 and 2003         3

                  Condensed Consolidated Balance Sheets as of September 30, 2004 and June 30, 2004                           4

                  Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2004 and 2003     5

                  Notes to Condensed Consolidated Financial Statements                                                       6

         Item 2.  Management's Discussion and Analysis of Financial Condition and
                  Results of Operations                                                                                     14

         Item 4.  Controls and Procedures                                                                                   21

PART II. OTHER INFORMATION

         Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases of Equity                                     22
                  Securities

         Item 5.  Other Information                                                                                         22

         Item 6.  Exhibits and Reports on Form 8-K                                                                          23

SIGNATURES                                                                                                                  24

EXHIBIT INDEX                                                                                                               25
</TABLE>

                                       2
<PAGE>

                                     PART I

                          ITEM 1. FINANCIAL STATEMENTS

                     THE BISYS GROUP, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                    Three Months Ended
                                                       September 30,
                                                   ---------------------
                                                      2004       2003
                                                   ---------   ---------
<S>                                                <C>         <C>
Revenues                                           $ 268,129   $ 236,434
                                                   ---------   ---------

Operating costs and expenses:
   Service and operating                             174,339     149,919
   Selling, general and administrative                51,480      46,129
   Amortization of intangible assets                   7,150       5,806
   Restructuring, impairment and other charges           488      12,624
                                                   ---------   ---------
Total operating costs and expenses                   233,457     214,478
                                                   ---------   ---------
Operating earnings                                    34,672      21,956
Interest income                                          480         325
Interest expense                                      (4,851)     (4,664)
Investment gains                                       4,193           -
                                                   ---------   ---------
Income before income taxes                            34,494      17,617
Income taxes                                          12,763      11,774
                                                   ---------   ---------
Net income                                         $  21,731   $   5,843
                                                   =========   =========

Basic earnings per share                           $    0.18   $    0.05
                                                   =========   =========

Diluted earnings per share                         $    0.18   $    0.05
                                                   =========   =========
</TABLE>

               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.

                                       3

<PAGE>

                     THE BISYS GROUP, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   September 30,      June 30,
                                                                                       2004            2004
                                                                                   -------------    -----------
<S>                                                                                <C>              <C>
ASSETS

Current assets:
   Cash and cash equivalents                                                        $    95,509     $   139,872
   Restricted cash                                                                       56,986          67,125
   Accounts receivable, net                                                             101,506          96,385
   Insurance premiums and commissions receivable, net                                    84,393          87,154
   Deferred tax asset                                                                    11,696          13,484
   Other current assets                                                                  41,426          49,747
                                                                                    -----------     -----------
     Total current assets                                                               391,516         453,767
   Property and equipment, net                                                          111,346         112,074
   Goodwill                                                                             802,178         802,178
   Intangible assets, net                                                               204,147         211,298
   Other assets                                                                          30,835          32,923
                                                                                    -----------     -----------
     Total assets                                                                   $ 1,540,022     $ 1,612,240
                                                                                    ===========     ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Current maturities of long-term debt                                             $    12,500     $     6,250
   Short-term borrowings                                                                  7,000          66,000
   Accounts payable                                                                      16,157          17,397
   Insurance premiums and commissions payable                                           111,158         126,173
   Other current liabilities                                                            135,333         158,459
                                                                                    -----------     -----------
     Total current liabilities                                                          282,148         374,279
   Long-term debt                                                                       387,500         393,750
   Deferred tax liability                                                                60,920          54,669
   Other liabilities                                                                      6,282           4,560
                                                                                    -----------     -----------
     Total liabilities                                                                  736,850         827,258
                                                                                    -----------     -----------
Stockholders' equity:
   Common stock, $0.02 par value, 320,000,000 shares authorized, 121,273,577 and
   120,836,315 shares issued                                                              2,425           2,417
   Additional paid-in capital                                                           395,657         389,484
   Retained earnings                                                                    424,558         403,738
   Notes receivable from stockholders                                                    (3,718)         (8,116)
   Employee benefit trust, 415,850 and 342,613 shares                                    (6,567)         (5,507)
   Deferred compensation                                                                  6,715           5,292
   Unearned compensation - restricted stock                                             (11,349)         (6,199)
   Accumulated other comprehensive income                                                 3,064           6,337
   Treasury stock at cost, 556,341 and 158,559 shares                                    (7,613)         (2,464)
                                                                                    -----------     -----------
     Total stockholders' equity                                                         803,172         784,982
                                                                                    -----------     -----------
     Total liabilities and stockholders' equity                                     $ 1,540,022     $ 1,612,240
                                                                                    ===========     ===========
</TABLE>

          The accompanying notes are an integral part of the condensed
                       consolidated financial statements.

                                       4

<PAGE>

                     THE BISYS GROUP, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                       Three Months Ended
                                                                                          September 30,
                                                                                     ----------------------
                                                                                       2004          2003
                                                                                     ---------     --------
<S>                                                                                  <C>           <C>
Cash flows from operating activities:
Net income                                                                           $  21,731     $  5,843
Adjustments to reconcile net income to net cash provided by operating activities:
   Restructuring, impairment and other charges                                             488       12,624
   Depreciation and amortization                                                        16,016       13,978
   Deferred income tax provision                                                         9,912        2,938
   Investment gains                                                                     (4,193)           -
   Change in operating assets and liabilities, net of effects from acquisitions        (24,605)      (8,951)
                                                                                     ---------     --------
Net cash provided by operating activities                                               19,349       26,432
                                                                                     ---------     --------
Cash flows from investing activities:
   Payments related to businesses previously acquired                                     (186)      (1,943)
   Capital expenditures                                                                 (8,201)      (9,487)
   Proceeds from sale of investments                                                     7,393            -
   Change in other investments                                                             510        1,708
                                                                                     ---------     --------
Net cash used in investing activities                                                     (484)      (9,722)
                                                                                     ---------     --------
Cash flows from financing activities:
   Short-term borrowings, net                                                          (59,000)      (9,000)
   Proceeds from exercise of stock options                                                 128        2,970
   Repurchases of common stock                                                          (8,754)     (13,763)
   Repayment of notes receivable from stockholders                                       4,398            -
                                                                                     ---------     --------
Net cash used in financing activities                                                  (63,228)     (19,793)
                                                                                     ---------     --------
Net decrease in cash and cash equivalents                                              (44,363)      (3,083)

Cash and cash equivalents at beginning of period                                       139,872       79,558
                                                                                     ---------     --------
Cash and cash equivalents at end of period                                           $  95,509     $ 76,475
                                                                                     =========     ========
</TABLE>

               The accompanying notes are an integral part of the
                  condensed consolidated financial statements.

                                       5

<PAGE>

                     THE BISYS GROUP, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
      (UNLESS OTHERWISE NOTED, AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

1.    BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      THE COMPANY

      The BISYS Group, Inc. and subsidiaries (the "Company") is a leading
      provider of outsourcing solutions for the financial services sector.

      BASIS OF PRESENTATION

      The condensed consolidated financial statements include the accounts of
      The BISYS Group, Inc. and its subsidiaries and have been prepared
      consistent with the accounting policies reflected in the 2004 Annual
      Report on Form 10-K filed with the Securities and Exchange Commission and
      should be read in conjunction therewith. The condensed consolidated
      financial statements include all adjustments (consisting of normal
      recurring adjustments) which are, in the opinion of management, necessary
      to fairly state this information.

      RECLASSIFICATION

      Certain reclassifications have been made to the fiscal 2004 financial
      statements to conform to the fiscal 2005 presentation.

      RESTRICTED CASH

      Unremitted insurance premiums are held in a fiduciary capacity and
      approximated $57.0 million and $67.1 million at September 30, 2004 and
      June 30, 2004, respectively. The period for which the Company holds such
      funds is dependent upon the date the agent or broker remits the payment of
      the premium to the Company and the date the Company is required to forward
      such payment to the insurer.

      INSURANCE PREMIUMS AND COMMISSIONS RECEIVABLE AND PAYABLE

      The Company has separately reflected receivables and payables arising from
      its insurance-related businesses on the accompanying condensed
      consolidated balance sheets. The captions "insurance premiums and
      commissions receivable" and "insurance premiums and commissions payable"
      include insurance premiums and commissions in the Company's commercial
      insurance services division and net commissions receivable in the
      Company's life insurance brokerage division. In its capacity as a
      commercial property and casualty wholesale distributor, the Company
      collects premiums from other agents and brokers and, after deducting its
      commissions, remits the premiums to the respective insurers.

      INVESTMENTS

      Management determines the appropriate classification of investments in
      equity securities at the time of purchase. Marketable equity securities
      available for sale are carried at market value based upon quoted market
      prices. Unrealized gains or losses on available for sale securities are
      accumulated as an adjustment to stockholders' equity, net of related
      deferred income taxes. Realized gains or losses are computed based on
      specific identification of the securities sold. At September 30, 2004,
      investments available for sale are recorded at their market value of $7.0
      million, with an unrealized gain of $4.6 million. Net realized gains from
      securities sold during the three months ended September 30, 2004 were $4.2
      million.

      STOCK-BASED COMPENSATION

      The Company accounts for its stock option, restricted stock and stock
      purchase plans under the recognition and measurement principles of APB
      Opinion No. 25, "Accounting for Stock Issued to Employees." Accordingly,
      compensation expense has been recorded for restricted stock awards, and no
      expense has been recorded for the Company's other stock-based plans. The
      following table presents the effect on net income and earnings per share
      if the Company had applied the fair value recognition provisions of FAS
      No. 123, "Accounting for Stock-Based Compensation":

                                       6
<PAGE>

<TABLE>
<CAPTION>
                                             Three Months Ended
                                                September 30,
                                          ------------------------
                                             2004          2003
                                          ----------     ---------
<S>                                       <C>            <C>
Net income, as reported                   $   21,731     $   5,843

Add: Stock-based employee compensation
   expense included in reported net
   income, net of related tax effects            460           165

Deduct: Total stock-based employee
   compensation expense determined
   under fair value based method, net
   of related tax effects                     (4,338)       (4,096)
                                          ----------     ---------
Pro forma net income                      $   17,853     $   1,912
                                          ==========     =========

Earnings per share:
   Basic, as reported                     $     0.18     $    0.05
                                          ==========     =========
   Basic, pro forma                       $     0.15     $    0.02
                                          ==========     =========

   Diluted, as reported                   $     0.18     $    0.05
                                          ==========     =========
   Diluted, pro forma                     $     0.15     $    0.02
                                          ==========     =========
</TABLE>

2.    USE OF ESTIMATES

      The preparation of financial statements in conformity with generally
      accepted accounting principles requires management to make certain
      estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosure of contingent assets and liabilities at the
      date of the financial statements and the reported amounts of revenue and
      expenses during the reporting period. The most significant estimates are
      related to insurance commissions receivable, goodwill, intangible assets,
      income taxes, and revenue recognition.

      The Company bases its estimates on historical experience and on various
      other assumptions that are believed to be reasonable under the
      circumstances, the results of which form the basis for making judgments
      about the carrying value of assets and liabilities that are not readily
      apparent from other sources. Actual results may differ from these
      estimates in the near term.

3.    COMPREHENSIVE INCOME

      The components of comprehensive income are as follows:

<TABLE>
<CAPTION>
                                              Three Months Ended
                                                 September 30,
                                              -------------------
                                                2004        2003
                                              --------     ------
<S>                                           <C>          <C>
Net income                                    $ 21,731     $5,843
Unrealized gain on investments, net of tax          27         12
Reclassification adjustment for gains
  included in net income, net of tax            (3,075)         -
Foreign currency translation adjustment           (225)       257
                                              --------     ------
  Total comprehensive income                  $ 18,458     $6,112
                                              ========     ======
</TABLE>

                                       7

<PAGE>

4.    EARNINGS PER SHARE

      Basic and diluted EPS computations for the three months ended September
      30, 2004 and 2003 are as follows:

<TABLE>
<CAPTION>
                                                Three Months Ended
                                                   September 30,
                                           ----------------------------
                                               2004            2003
                                           ------------    ------------
<S>                                        <C>             <C>
Basic EPS

Net income                                 $     21,731    $      5,843
                                           ============    ============

Weighted average common shares
outstanding                                     120,000         119,805
                                           ============    ============

Basic earnings per share                   $       0.18    $       0.05
                                           ============    ============
Diluted EPS

Net income                                 $     21,731    $      5,843
                                           ============    ============

Weighted average common shares
outstanding                                     120,000         119,805

Assumed conversion of common shares
issuable under stock-based compensation
plans                                               575           1,662
                                           ------------    ------------

Weighted average common and common
equivalent shares outstanding                   120,575         121,467
                                           ============    ============

Diluted earnings per share                 $       0.18    $       0.05
                                           ============    ============
</TABLE>

      The effect of the assumed conversion of the convertible subordinated notes
      into common stock would be antidilutive and therefore is excluded from the
      computation of diluted earnings per share.

      Certain stock options were not included in the computation of diluted EPS
      because the options' exercise prices were greater than the average market
      price of common shares during the period, as follows:

<TABLE>
<CAPTION>
                                                Three Months Ended
                                                  September 30,
                                       -----------------------------------
                                             2004               2003
                                       ----------------   ----------------
<S>                                    <C>                <C>
Number of options excluded                  10,321              6,380

Option price per share                 $14.01 to $35.30   $18.02 to $35.30

Average market price of common shares
for the period                              $13.92             $17.83
</TABLE>

5.    RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

      During the three months ended September 30, 2004 and 2003, the Company
      recorded pre-tax restructuring, impairment and other charges of $0.5
      million and $12.6 million, respectively. The charges primarily relate to
      the integration, consolidation, and reorganization of certain business
      operations in the Company's European Fund Services division and the Life
      Insurance Services division, and the recording of estimated amounts for
      certain litigation expenses.

                                       8

<PAGE>

      A summary of these items follows:

<TABLE>
<CAPTION>
                                                      Three Months Ended
                                                        September 30,
                                                      ------------------
                                                       2004      2003
                                                      -----    ---------
<S>                                                   <C>      <C>
Restructuring charges                                  $107      $ 5,462
Impairment charges                                        -        4,515
Litigation and other charges                            381        2,647
                                                       ----      -------
  Total restructuring, impairment and other charges    $488      $12,624
                                                       ====      =======
</TABLE>

      The following summarizes activity with respect to the Company's
      restructuring activities for the three months ended September 30, 2004:

<TABLE>
<S>                                         <C>
Restructuring accrual at June 30, 2004      $ 3,849
                                            -------
Expense provision:
   Employee severance                           263
   Reversals                                     (8)
   Currency translation gain                   (148)
                                            -------
      Total                                     107
                                            -------

Cash payments and other                       1,858
                                            -------
Remaining accrual at September 30, 2004:
Employee severance                            1,212
Facility closure                                886
                                            -------
      Total                                 $ 2,098
                                            =======
</TABLE>

      Restructuring charges of $0.1 million during the three months ended
      September 30, 2004 were related to the ongoing restructuring of the
      European mutual fund services operations and were comprised of severance
      totaling $0.3 million, offset by currency translation gains of $0.1
      million.

      For the three months ended September 30, 2003, restructuring charges of
      $5.5 million were comprised of severance totaling $4.2 million and lease
      termination costs of $1.3 million. Severance charges resulted from the
      termination of approximately 175 employees representing all levels of
      staffing. In connection with its restructuring activities, the Company
      recorded asset impairment charges of $4.5 million in the first quarter of
      fiscal 2004. Of these charges, $3.9 million relates to impairment of an
      intangible asset and other long-lived assets as a result of the Company's
      plan to restructure its European mutual fund services operations and to
      exit certain European locations following the acquisition of two of the
      Company's significant customers by acquirers with existing fund services
      capabilities. The Company also recorded an additional tax valuation
      allowance of $5.2 million for deferred tax assets associated with tax loss
      carryforwards arising from the European mutual fund services operations as
      the Company believes the deferred tax assets will not be realized.

      In connection with the aforementioned restructuring of the European mutual
      fund services operations, additional contract termination costs of
      approximately $1.0 million are expected to be recognized in the second
      quarter of fiscal 2005 in accordance with FAS No. 146, "Accounting for
      Costs Associated with Exit or Disposal Activities."

      Based on internal analysis and discussions with counsel on the status of
      various litigation matters and contract disputes, the Company recorded a
      charge of approximately $2.6 million during the three months ended
      September 30, 2003 related to breach of contract claims in the life
      insurance services business. The total amount of the charge includes an
      estimated resolution amount and actual legal fees incurred. The Company
      intends to continue to vigorously defend the claims asserted and has
      asserted a number of counterclaims.

                                       9

<PAGE>

6.    GOODWILL AND INTANGIBLE ASSETS

      GOODWILL

      The carrying amount of goodwill by business segment at September 30, 2004
      was as follows:

<TABLE>
<CAPTION>
                               Investment  Insurance  Information
                                Services   Services    Services        Total
                               ----------  ---------  -----------    --------
<S>                            <C>         <C>        <C>            <C>
Balance, September 30, 2004     $311,191   $455,597     $35,390      $802,178
                                --------   --------     -------      --------
</TABLE>

      INTANGIBLE ASSETS

      At September 30, 2004, acquired intangible assets were comprised of the
      following:

<TABLE>
<CAPTION>
                         Gross Carrying     Accumulated
                             Amount        Amortization    Net Book Value
                         --------------    ------------    --------------
<S>                      <C>               <C>             <C>
Customer related             $218,621        $(56,867)        $161,754
Noncompete agreements          46,504         (18,437)          28,067
Other                          22,695          (8,369)          14,326
                             --------        --------         --------
  Total                      $287,820        $(83,673)        $204,147
                             ========        ========         ========
</TABLE>

      At June 30, 2004, acquired intangible assets were comprised of the
      following:

<TABLE>
<CAPTION>
                         Gross Carrying     Accumulated
                             Amount        Amortization    Net Book Value
                         --------------    ------------    --------------
<S>                      <C>               <C>             <C>
Customer related             $218,621        $(51,571)        $167,050
Noncompete agreements          46,504         (17,066)          29,438
Other                          22,695          (7,885)          14,810
                             --------        --------         --------
  Total                      $287,820        $(76,522)        $211,298
                             ========        ========         ========
</TABLE>

      All of the Company's acquired intangible assets are subject to
      amortization. Amortization expense for acquired intangible assets was $7.2
      million for the three months ended September 30, 2004 and $27.0 million
      for the year ended June 30, 2004. Estimated annual amortization expense is
      $28.2 million in fiscal 2005, $27.1 million in fiscal 2006, $25.7 million
      in fiscal 2007, $24.9 million in fiscal 2008, and $22.9 million in fiscal
      2009.

7.    BORROWINGS

      In March 2004, the Company entered into a senior unsecured credit
      facility. The $400 million facility contains a $300 million revolving line
      of credit facility, of which $7 million is outstanding at September 30,
      2004, and a $100 million term loan. The facility, which expires March 31,
      2008, supports working capital requirements, repurchases of the Company's
      common stock, and the funding of future acquisitions.

      Outstanding borrowings under the credit facility bear interest at prime
      or, at the Company's option, LIBOR plus a margin. The margin will not
      exceed 1.45% on the revolving component and 1.75% on the term loan
      component based upon the ratio of the Company's consolidated indebtedness
      to consolidated earnings before interest expense, taxes, depreciation, and
      amortization. The credit agreement requires the Company to pay an annual
      facility fee on the $300 million revolving credit, not to exceed 0.30% or
      $900,000. The facility is guaranteed by certain subsidiaries of The BISYS
      Group, Inc.

      The credit agreement requires the Company to maintain certain financial
      covenants and limits the Company's ability to incur future indebtedness
      and to pay dividends. As of September 30, 2004, no amounts were permitted
      for the payment of cash dividends.

      The Company may borrow under the revolving credit facility through March
      2008 up to $300 million, reduced by any outstanding letters of credit
      ($3.0 million at September 30, 2004). The $100 million term loan has
      quarterly principal payments commencing on June 30, 2005 with a final
      maturity of March 31, 2008. Interest is payable quarterly for prime rate
      borrowings or at maturity for LIBOR borrowings, which range from 30 to 180
      days. At September 30, 2004, the weighted average interest rate of the
      credit facility borrowings was 3.11%.

      Long-term debt also includes $300 million of 4% convertible subordinated
      notes due March 2006.

                                       10

<PAGE>

      Debt outstanding at September 30, 2004 and June 30, 2004 is as follows:

<TABLE>
<CAPTION>
                                              September 30, 2004   June 30, 2004
                                              ------------------   -------------
<S>                                           <C>                  <C>
Senior credit facility, term loan, at a
rate of 3.125% and 2.625%, respectively            $100,000           $100,000

Senior credit facility, revolving line
of credit, at a rate of 2.9% and 2.275%,
respectively                                          7,000             66,000

Convertible subordinated 4% notes                   300,000            300,000
                                                   --------           --------

                                                    407,000            466,000

Less amounts due within one year                     19,500             72,250
                                                   --------           --------
Long-term debt                                     $387,500           $393,750
                                                   ========           ========

</TABLE>

      Long-term debt repayments at September 30, 2004 are due as follows:

<TABLE>
<S>         <C>
2006        $318,750
2007          31,250
2008          37,500
            --------
            $387,500
            ========
</TABLE>

8.    SEGMENT INFORMATION

      The following table sets forth revenue and operating income by business
      segment and for corporate operations for the three months ended September
      30, 2004 and 2003. Measures used to assess segment performance include
      revenues and operating earnings, exclusive of restructuring, impairment
      and other charges. Segment operating earnings exclude restructuring,
      impairment and other charges since they are not allocated to the segments
      for internal evaluation purposes. While these items are identifiable to
      the business segments, they are not included in the measurement of segment
      operating earnings provided to the chief operating decision maker for
      purposes of assessing segment performance and decision making with respect
      to resource allocation.

                                       11

<PAGE>

<TABLE>
<CAPTION>
                                  Three Months Ended
                                     September 30,
                                 --------------------
                                   2004        2003
                                 ---------  ---------
<S>                              <C>        <C>
Revenue:
Investment Services              $ 149,435  $ 128,171
Insurance Services                  66,636     56,178
Information Services                52,058     52,085
                                 ---------  ---------
   Total revenue                 $ 268,129  $ 236,434
                                 =========  =========

Operating income (loss):
Investment Services              $  18,268  $  16,413
Insurance Services                  11,991     10,460
Information Services                11,574     12,887
Corporate                           (6,673)    (5,180)
                                 ---------  ---------
   Total operating income        $  35,160  $  34,580
                                 =========  =========

Restructuring, impairment and
 other charges:
Investment Services              $     112  $   5,438
Insurance Services                     381      6,176
Information Services                     -        145
Corporate                               (5)       865
                                 ---------  ---------
   Total restructuring,
     impairment and other
       charges                   $     488  $  12,624
                                 =========  =========
   Total consolidated operating
     earnings                    $  34,672  $  21,956
                                 =========  =========
</TABLE>

9.    SEC INVESTIGATION

      On May 17, 2004, the Company announced that it would restate its financial
      results for the fiscal years ended June 30, 2003, 2002, and 2001 and for
      the quarters ended December 31 and September 30, 2003 in order to record
      adjustments for correction of errors resulting from various accounting
      matters in the Life Insurance Services division. An amended Annual Report
      on Form 10-K for the fiscal year ended June 30, 2003 was filed with the
      Securities and Exchange Commission ("SEC") on August 10, 2004 along with
      amended Quarterly Reports on Form 10-Q for the quarters ended December 31
      and September 30, 2003 to reflect the restated financial results. All
      referenced amounts and comparisons in the accompanying condensed
      consolidated financial statements, notes and management's discussion and
      analysis reflect the balances and amounts on a restated basis. The Audit
      Committee of the Company's Board of Directors conducted an independent
      investigation into the events and circumstances that resulted in the
      restatement and retained independent counsel to assist in such
      investigation. The Company notified the SEC in May 2004 of its intention
      to restate prior period financial results. Subsequently, the SEC advised
      the Company that the SEC is conducting an investigation into the facts and
      circumstances related to the restatement. The Company has cooperated and
      intends to continue to cooperate with the SEC's investigation.

10.   LEGAL PROCEEDINGS

      Following the Company's May 17, 2004 announcement regarding the
      restatement of its financial results, seven putative class action and two
      derivative lawsuits were filed against the Company and certain of its
      current and former officers in the United States District Court for the
      Southern District of New York. By order of the Court, all but one of the
      putative class actions have been consolidated into a single action, and on
      October 25, 2004, plaintiffs filed a consolidated amended complaint. The
      complaint purports to be brought on behalf of all shareholders who
      purchased the Company's securities between October 23, 2000 and May 17,
      2004 and generally asserts that the Company, certain of its officers, and
      its auditor, PricewaterhouseCoopers LLP, allegedly violated the federal
      securities laws in connection with the purported issuance of false and
      misleading information concerning the Company's financial condition. The
      complaint seeks damages in an unspecified amount as well as unspecified
      equitable/injunctive relief.

                                       12

<PAGE>

      The remaining putative class action purports to be brought on behalf of
      all persons who acquired non-publicly traded BISYS securities from the
      Company as part of private equity transactions during the period October
      23, 2000 to May 17, 2004. The complaint generally asserts that the Company
      and certain of its officers allegedly violated the federal securities laws
      in connection with the purported issuance of false and misleading
      information concerning the Company's financial condition, and seeks
      damages in an unspecified amount. Plaintiffs have not yet filed an amended
      complaint.

      The derivative complaints purport to be brought on behalf of the Company
      and generally assert that certain officers and directors are liable for
      alleged breaches of fiduciary duties, abuse of control, gross
      mismanagement, waste, and unjust enrichment that purportedly occurred
      between October 23, 2000 and the present. The derivative complaints seek
      disgorgement, constructive trust, and damages in an unspecified amount.
      The Court has ordered that the derivative actions be consolidated with one
      another; plaintiffs have not yet filed a consolidated amended complaint.

      The Company intends to defend itself vigorously against these claims but
      is unable to determine the ultimate outcome.

                                       13

<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

BUSINESS OVERVIEW

      We provide outsourcing solutions that enable investment firms, insurance
      companies, and banks to more efficiently serve their customers, grow their
      businesses, and respond to evolving regulatory requirements. We currently
      support over 1,000 clients in the financial services industry through
      three business segments: Investment Services, Insurance Services, and
      Information Services.

      Our segments are separately managed strategic business units that offer
      different products and services. The Investment Services segment provides
      outsourcing services, including administration and distribution, to
      domestic and offshore mutual fund complexes, hedge funds and private
      equity funds and retirement plan services to small to mid-size retirement
      plans. The Insurance Services segment provides distribution solutions for
      commercial property and casualty, annuities, life, long-term care,
      disability and special risk insurance products; offers certification and
      continuing education training for insurance and investment professionals;
      and provides licensing-related software products and services. The
      Information Services segment provides information processing, imaging, and
      asset retention solutions to banks, insurance companies and corporate
      clients.

      Our growth strategy emphasizes internal revenue growth, supplemented by
      acquisitions of complementary businesses. Our objectives in the near term
      are to focus on internal revenue growth and margin expansion, improve
      customer service performance to achieve higher retention, and further
      invest in the development of our associates. We endeavor to expand the
      scope of our services through focused account management, emphasizing
      services with recurring revenues and long-term contracts. We achieve
      internal revenue growth and expand our business base through organic
      growth of our clients, sales of additional products and services to
      existing clients, and direct sales to new clients.

RESULTS OF OPERATIONS

      The following table presents the percentage of revenues represented by
      each item in our condensed consolidated statements of income for the
      periods indicated:

<TABLE>
<CAPTION>
                                                         Three Months Ended
                                                            September 30,
                                                        --------------------
                                                        2004           2003
                                                        -----          -----
<S>                                                     <C>            <C>
Revenues                                                100.0%         100.0%
                                                        -----          -----

Operating costs and expenses:
   Service and operating                                 65.0           63.4
   Selling, general and administrative                   19.2           19.5
   Amortization of intangible assets                      2.7            2.5
   Restructuring, impairment and other charges            0.2            5.3
                                                        -----          -----
Total operating costs and expenses                       87.1           90.7
                                                        -----          -----
Operating earnings                                       12.9            9.3
Interest income                                           0.2            0.2
Interest expense                                         (1.8)          (2.0)
Investment gains                                          1.6              -
                                                        -----          -----
Income before income taxes                               12.9            7.5
Income taxes                                              4.8            5.0
                                                        -----          -----
Net income                                                8.1%           2.5%
                                                        =====          =====
</TABLE>

COMPARISON OF THE THREE MONTHS ENDED SEPTEMBER 30, 2004 WITH THE THREE MONTHS
ENDED SEPTEMBER 30, 2003.

      Revenues increased 13% from $236.4 million for the three months ended
      September 30, 2003 to $268.1 million for the three months ended September
      30, 2004. This growth was derived from recently acquired businesses, sales
      to new clients, existing client growth, and cross sales to existing
      clients. Internal revenue growth approximated 10% for the three months
      ended September 30, 2004 over the same period last year.

                                       14

<PAGE>

      Service and operating expenses increased 16% from $149.9 million for the
      three months ended September 30, 2003 to $174.3 million for the three
      months ended September 30, 2004 and increased as a percentage of revenues
      from 63.4% to 65.0%. The dollar and percentage increases resulted from
      additional costs associated with greater revenues, lower margins in the
      Information Services segment, expenses associated with adding new clients,
      and changes in the mix of the business.

      Selling, general and administrative expenses increased 12% from $46.1
      million for the three months ended September 30, 2003 to $51.5 million for
      the three months ended September 30, 2004 and decreased as a percentage of
      revenues from 19.5% to 19.2%. The dollar increase resulted from additional
      costs associated with greater revenues. The decrease as a percentage of
      revenues resulted from further utilization of existing general and
      administrative support resources.

      Amortization of intangible assets increased $1.3 million for the three
      months ended September 30, 2004 over the same period last year due to a
      higher level of intangible assets associated with recently acquired
      businesses and customer contracts.

      Interest expense increased $0.2 million for the three months ended
      September 30, 2004 over the same period last year primarily due to higher
      interest rates on borrowings under our revolving credit facility.

      Investment gains of $4.2 million were realized during the three months
      ended September 30, 2004 from the sale of a portion of an investment we
      held in the common stock of another publicly traded company. The remainder
      of the investment was sold in October 2004 and an additional gain of more
      than $4 million is expected to be recognized in the fiscal second quarter
      of 2005.

      The income tax provision of $12.8 million for the three months ended
      September 30, 2004 increased from $11.8 million for the three months ended
      September 30, 2003, due to higher taxable income. The provision represents
      an effective tax rate, excluding the impact of restructuring, impairment
      and other charges, of 37.0% and 37.25% for the periods ended September 30,
      2004 and 2003, respectively. The decrease in the effective tax rate is
      primarily due to the mix of business in foreign tax jurisdictions, which
      have lower tax rates.

      Operating earnings, before restructuring, impairment and other charges,
      resulted in margins of 13.1% and 14.6% for the three months ended
      September 30, 2004 and 2003, respectively. The margin decrease was
      primarily due to a margin decline in the Investment Services group for
      expenses associated with adding new clients and a margin decline in the
      Information Services group due to flat revenues and ongoing investments in
      several new products.

RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

      During the three months ended September 30, 2004 and 2003, we recorded
      pre-tax restructuring, impairment and other charges of $0.5 million and
      $12.6 million, respectively. The charges primarily relate to the
      integration, consolidation, and reorganization of certain business
      operations in the Company's European Fund Services division and the Life
      Insurance Services division, and the recording of estimated amounts for
      certain litigation expenses.

      A summary of these items follows:

<TABLE>
<CAPTION>
                                                           Three Months Ended
                                                              September 30,
                                                           -------------------
                                                           2004         2003
                                                           ----        -------
<S>                                                        <C>         <C>
Restructuring charges                                      $107        $ 5,462
Impairment charges                                            -          4,515
Litigation and other charges                                381          2,647
                                                           ----        -------
  Total restructuring, impairment and other charges        $488        $12,624
                                                           ====        =======
</TABLE>

                                       15

<PAGE>

      The following summarizes activity with respect to restructurings for the
      three months ended September 30, 2004:

<TABLE>
<S>                                             <C>
Restructuring accrual at June 30, 2004          $ 3,849
                                                -------
Expense provision:
   Employee severance                               263
   Reversals                                         (8)
   Currency translation gain                       (148)
                                                -------
      Total                                         107
                                                -------
Cash payments and other                           1,858
                                                -------
Remaining accrual at September 30, 2004:
Employee severance                                1,212
Facility closure                                    886
                                                -------
      Total                                     $ 2,098
                                                =======

</TABLE>

      Restructuring charges of $0.1 million during the three months ended
      September 30, 2004 were related to the ongoing restructuring of the
      European mutual fund services operations and were comprised of severance
      totaling $0.3 million, offset by currency translation gains of $0.1
      million.

      For the three months ended September 30, 2003, restructuring charges of
      $5.5 million were comprised of severance totaling $4.2 million and lease
      termination costs of $1.3 million. Severance charges resulted from the
      termination of approximately 175 employees representing all levels of
      staffing. In connection with our restructuring activities, we recorded
      asset impairment charges of $4.5 million in the first quarter of fiscal
      2004. Of these charges, $3.9 million relates to impairment of an
      intangible asset and other long-lived assets as a result of our plan to
      restructure our European mutual fund services operations and to exit
      certain European locations following the acquisition of two of our
      significant customers by acquirers with existing fund services
      capabilities. We also recorded an additional tax valuation allowance of
      $5.2 million for deferred tax assets associated with tax loss
      carryforwards arising from the European mutual fund services operations as
      we believe the deferred tax assets will not be realized.

      In connection with the aforementioned restructuring of the European mutual
      fund services operations, additional contract termination costs of
      approximately $1.0 million are expected to be recognized in the second
      quarter of fiscal 2005 in accordance with FAS No. 146, "Accounting for
      Costs Associated with Exit or Disposal Activities."

      Based on internal analysis and discussions with counsel on the status of
      various litigation matters and contract disputes, we recorded a charge of
      approximately $2.6 million during the three months ended September 30,
      2003 related to breach of contract claims in the life insurance services
      business. The total amount of the charge includes an estimated resolution
      amount and actual legal fees incurred. We intend to continue to vigorously
      defend the claims asserted and have asserted a number of counterclaims.

SEGMENT INFORMATION

      The following table sets forth revenue and operating income by business
      segment and for corporate operations for the three months ended September
      30, 2004 and 2003. Measures used to assess segment performance include
      revenues and operating earnings, exclusive of restructuring, impairment
      and other charges. Segment operating earnings exclude restructuring,
      impairment and other charges since they are not allocated to the segments
      for internal evaluation purposes. While these items are identifiable to
      the business segments, they are not included in the measurement of segment
      operating earnings provided to the chief operating decision maker for
      purposes of assessing segment performance and decision making with respect
      to resource allocation.

                                       16

<PAGE>

<TABLE>
<CAPTION>
                                         (in thousands)
                                       Three Months Ended
                                         September 30,
                                   ---------------------------
                                      2004             2003
                                   ---------         ---------
<S>                                <C>               <C>
Revenue:
   Investment Services             $ 149,435         $ 128,171
   Insurance Services                 66,636            56,178
   Information Services               52,058            52,085
                                   ---------         ---------
     Total revenue                 $ 268,129         $ 236,434
                                   =========         =========

Operating income (loss):
   Investment Services             $  18,268         $  16,413
   Insurance Services                 11,991            10,460
   Information Services               11,574            12,887
   Corporate                          (6,673)           (5,180)
                                   ---------         ---------
     Total operating income        $  35,160         $  34,580
                                   =========         =========

Restructuring, impairment
  and other charges:
Investment Services                $     112         $   5,438
Insurance Services                       381             6,176
Information Services                       -               145
Corporate                                 (5)              865
                                   ---------         ---------
   Total restructuring,
      impairment and other
        charges                    $     488         $  12,624
                                   =========         =========

   Total consolidated
        operating earnings         $  34,672         $  21,956
                                   =========         =========
</TABLE>

      Internal revenue growth (excluding acquisitions) for Investment Services,
      Insurance Services, and Information Services approximated 17%, 3%, and 0%,
      respectively, during the three months ended September 30, 2004 over the
      same period last year. A substantial portion of our revenues, especially
      in the Investment and Information Services business segments, are
      recurring in nature and are derived from long-term customer contracts with
      terms that generally average from three to five years.

      Revenue in the Investment Services business segment increased $21.3
      million, or 16.6%, during the three months ended September 30, 2004, over
      the same period last year. The revenue increase was primarily due to the
      addition of several new clients and increased assets under administration.
      Operating income in the Investment Services business segment increased
      $1.9 million, or 11.3%, during the fiscal first quarter. Operating margins
      were 12.2% and 12.8% for the three months ended September 30, 2004 and
      2003, respectively. The margin decreased primarily due to expenses
      associated with adding new clients to our Fund and Retirement Services
      platforms and additional investments in both our Hedge Fund and Private
      Equity businesses. For fiscal year 2005, margins in the Investment
      Services segment are expected to expand modestly and internal revenue
      growth is expected to be in the range of 6% to 9%. The projected rate of
      internal revenue growth reflects the loss of a significant Fund Services
      client in the second half of the fiscal year representing approximately
      $25 to $30 million of annualized revenue. The loss of the customer was the
      result of the acquiring entity's decision to use its in-house solution to
      service the acquired client.

      Revenue in the Insurance Services business segment increased $10.5
      million, or 18.6%, during the three months ended September 30, 2004, over
      the same period last year. The revenue increase was primarily from the
      acquisition of USA Insurance Group in November 2003. Operating income in
      the Insurance Services business segment increased $1.5 million, or 14.6%,
      during the fiscal first quarter. Operating margins were 18.0% and 18.6%
      for the three months ended September 30, 2004 and 2003, respectively. The
      margin decrease was primarily due to additional investments in sales
      support, customer service, finance, and IT resources. For fiscal year
      2005, internal revenue growth is expected to be positive and margins in
      the Insurance Services business segment are expected to be in the range
      of 17% to 19%.

      Revenue in the Information Services business segment decreased $0.03
      million, or 0.1%, during the three months ended September 30, 2004, over
      the same period last year. The revenue decrease was due to the loss of a
      major customer in the latter half of 2004, offset by existing client
      growth, cross sales of ancillary products

                                       17

<PAGE>

      and services to existing clients, and sales to new clients. Operating
      income in the Information Services business segment decreased $1.3
      million, or 10.2%, during the fiscal first quarter. Operating margins were
      22.2% and 24.7% for the three months ended September 30, 2004 and 2003,
      respectively. The margin decrease was primarily due to flat revenue and
      ongoing investments in the growth of several new products. For fiscal year
      2005, margins in the Information Services business segment are expected to
      decline by approximately 400 basis points, and revenue is expected to be
      lower than fiscal 2004 due to the loss of a major customer that was
      acquired and deconverted in the latter half of fiscal 2004.

      Corporate operations represent charges for our human resources, legal,
      accounting and finance functions, and various other unallocated overhead
      charges. Corporate expenses of $6.7 million for the three months ended
      September 30, 2004 increased from $5.2 million in the same period last
      year primarily due to additional expenses of more than $1 million related
      to the restatement process, Sarbanes Oxley implementation, and other legal
      and accounting fees.

FINANCIAL CONDITION

      At September 30, 2004 and June 30, 2004, we had cash and cash equivalents
      of $95.5 million and $139.9 million, respectively. Cash and cash
      equivalents held outside the U.S. at September 30, 2004 and June 30, 2004
      amounted to $54.1 million and $50.9 million, respectively. Stockholders'
      equity was $803.2 million and $785.0 million at September 30, 2004 and
      June 30, 2004, respectively.

      Capital expenditures were $8.2 million in fiscal first quarter of 2005 and
      are expected to approximate $30 to $35 million for fiscal year 2005.

LIQUIDITY AND CAPITAL RESOURCES

      At September 30, 2004, we had outstanding borrowings of $7 million against
      our $300 million revolving credit facility and a $100 million term loan
      under the credit facility. The revolver and term loan bear interest at
      LIBOR plus a margin of 1.025% and 1.25%, respectively, resulting in a
      weighted average interest rate of 3.11% on all outstanding borrowings
      under the facility at September 30, 2004. The facility is used to support
      our working capital requirements, repurchase our common stock, and fund
      our future acquisitions. At September 30, 2004, we had $2.7 million
      outstanding in letters of credit and $300 million of outstanding 4%
      convertible subordinated notes due March 2006. Our debt ratio (total
      debt/total debt plus equity) is 0.34 at September 30, 2004, and our
      maximum debt ratio may not exceed 0.50 under the terms of the revolving
      credit facility. At September 30, 2004, we were in compliance with all
      financial covenants required by the credit facility.

      We manage our debt structure and interest rate risk through the use of
      fixed- and floating-rate debt. While changes in interest rates could
      decrease interest income or increase interest expense, we do not believe
      that it has a material exposure to changes in interest rates based on the
      relative size of our interest bearing assets and liabilities. We do not
      undertake any specific actions concerning exposure to interest rate risk,
      and we are not party to any interest rate management transactions.

      Our strategy includes the acquisition of complementary businesses financed
      by a combination of internally generated funds, borrowings from the
      revolving credit facility, long-term debt and common stock. Our policy is
      to retain earnings to support future business opportunities, rather than
      to pay dividends. We have historically used a significant portion of our
      cash flow from operations to fund acquisitions and capital expenditures,
      with any remainder used to reduce outstanding borrowings under the credit
      facility or repurchase our own common stock. We believe that our cash flow
      from operations, together with other available sources of funds, will be
      adequate to meet our funding requirements. In the event that we make
      significant future acquisitions, however, we may raise funds through
      additional borrowings or the issuance of securities.

      Accounts receivable represented 44 and 45 days sales outstanding (DSO) at
      September 30, 2004 and 2003, respectively, based on quarterly revenues.
      The calculation of DSO for accounts receivable excludes insurance premiums
      and commissions receivable arising from our insurance-related businesses.
      DSO is less relevant for this type of receivable because it includes
      premiums that are ultimately remitted to the insurer and not recognized as
      revenue. Additionally, certain life insurance commissions due from
      insurance carriers have customary payment terms of up to twelve months. We
      regularly evaluate our accounts receivable position relative to our
      revenues and monitor our accounts receivable aging as part of managing our
      receivable portfolio. Credit risk is generally mitigated by reasonably
      short payment terms, the nature of our customers

                                       18

<PAGE>

      (i.e., commercial banks, mutual funds, and insurance carriers) and our
      large and diverse customer base. We generally do not require collateral
      for accounts receivable.

      For the three months ended September 30, 2004, operating activities
      provided cash of $19.3 million, primarily as a result of net income of
      $21.7 million, depreciation and amortization of $16.0 million, and
      deferred income taxes of $9.9 million offset by changes in working capital
      items of $24.6 million. Investing activities used cash of $0.5 million,
      primarily for capital expenditures of $8.2 million, offset by $7.4 million
      of proceeds from the sale of investments. Financing activities used cash
      of $63.2 million, comprised of repurchases of our stock of $8.7 million
      and net payments of short-term borrowings of $59.0 million, offset by
      proceeds from repayment of notes receivable from shareholders of $4.4
      million.

      Repurchases of the Company's common stock have occurred and are expected
      to continue to occur from time to time in the open market to offset the
      possible dilutive effect of shares issued under employee benefit plans,
      for possible use in future acquisitions, and for general and other
      corporate purposes. The following table presents stock repurchase activity
      during the three months ended September 30, 2004 and the year ended June
      30, 2004 under programs authorized by the Board of Directors, disclosing
      total shares repurchased under each program and the associated cost. Upon
      authorization of each new stock repurchase program, the former program is
      superseded and replaced.

<TABLE>
<CAPTION>
                                             Three Months Ended            Year Ended
                                             September 30, 2004           June 30, 2004
                                            -------------------       ---------------------
                                            Shares        Cost        Shares          Cost
                                            ------       ------       ------        -------
<S>                                         <C>          <C>          <C>           <C>
Share Repurchase Programs:
$100 million, authorized August 2002            -        $    -        3,158        $46,153
$100 million, authorized November 2003        636         8,754          869         13,565
                                              ---        ------        -----        -------
Total Stock Repurchases                       636        $8,754        4,027        $59,718
                                              ===        ======        =====        =======
</TABLE>

FORWARD-LOOKING STATEMENTS

      This Management's Discussion and Analysis of Financial Condition and
      Results of Operations and other sections of this report contain
      forward-looking statements that are based on management's current
      expectations, estimates, forecasts and assumptions concerning future
      events. In addition, other written or oral statements that constitute
      forward-looking statements may be made by or on behalf of management.
      These statements are subject to numerous known and unknown risks,
      uncertainties and assumptions that could cause actual events or results to
      differ materially from those projected. Words such as "believes,"
      "anticipates," "expects," "intends," "estimates, "projects," "plans,"
      "targets," and variations of such words and similar expressions are
      intended to identify such forward-looking statements. Except as required
      under the federal securities laws and the rules and regulations of the
      Securities and Exchange Commission (SEC), we do not undertake any
      obligation to update or revise publicly any forward-looking statements,
      whether as a result of new information, future events, changes in
      assumptions or otherwise. Although we believe that its plans, intentions,
      and expectations reflected in or suggested by the forward-looking
      statements made in this report are reasonable, there can be no assurance
      that such plans, intentions or expectations will be achieved.

      The risks, uncertainties and assumptions include: achieving planned
      revenue growth in each of our business units; renewal of material
      contracts in our business units consistent with past experience;
      successful and timely integration of significant businesses acquired by us
      and realization of anticipated synergies; increasing price, products, and
      services competition by U.S. and non-U.S. competitors, including new
      entrants; changes in U.S. and non-U.S. governmental regulations; the
      timely implementation of our restructuring programs and financial plans;
      general U.S. and non-U.S. economic and political conditions, including the
      global economic environment and interest rate and currency exchange rate
      fluctuation; continuing development and maintenance of appropriate
      business continuity plans for our processing systems; absence of
      consolidation among client financial institutions or other client groups;
      timely conversion of new customer data to our platforms; attracting and
      retaining qualified key employees; no material breach of security of any
      of our systems; control of costs and expenses; continued availability of
      financing, and financial resources on the terms required to support our
      future business endeavors; the mix of products and services; compliance
      with the covenants and restrictions of our bank credit facility and
      convertible subordinated notes indenture; and the outcome of pending and
      future litigation and governmental or regulatory proceedings.

                                       19

<PAGE>

      These are representative of the risks, uncertainties and assumptions that
      could affect the outcome of the forward-looking statements. In addition,
      such statements could be affected by general industry and market
      conditions and growth rates, and other future events.

                                       20

<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

As previously disclosed, we engaged in a review and analysis of estimates used
in determining the level of commissions receivable in our Life Insurance
Services division. As a result of our efforts, we determined that an adjustment
to commissions receivable in our Life Insurance division, together with
corresponding adjustments to revenues and expenses, should be recorded and
reflected in a restatement of our prior period financial results. In connection
with the aforementioned review, we also identified adjustments relating to
acquisition accounting for certain acquired entities in the Life Insurance
business, resulting in a reduction in goodwill and deferred tax liabilities over
the affected periods, and adjustments to commissions payable as a result of an
understatement in agent commissions payable. These adjustments were also
reflected in the restatement of our prior period financial results. In addition,
in reviewing our past practices, procedures and processes, we have determined
that there needs to be revisions to such practices, procedures and processes. In
this regard, we concluded there was a material weakness in our internal controls
over financial reporting relating to the validation and monitoring of
assumptions underlying the estimates used to compute certain first year, bonus
and renewal commissions receivable and with respect to related documentation and
review processes for significant accounting entries, including entries relating
to acquisition accounting.

To date, we have taken steps to improve our internal controls at our Life
Insurance Services division, including the following:

      -     Added personnel to the accounts receivable department to allow for
            more timely reconciliation and adjustment of aged accounts
            receivable and related agent payable accounts;

      -     Added senior management personnel to the finance staff focused on
            financial accounting, financial reporting and financial controls;

      -     Enhanced processes for reviewing and monitoring reserves for
            commissions receivable;

      -     Augmented review of commission revenue transactions to ensure
            adherence to our revenue recognition policies;

      -     Improved process for documentation and review of significant
            accounting entries and balance sheet account reconciliations;

      -     Initiated system enhancements to further automate processes
            associated with cash receipts, accounts receivable and revenue
            recognition; and

      -     Implemented systematic review of data quality and control.

We intend to continue to monitor our internal controls, and if further
improvements or enhancements are identified, we will take steps to implement
such improvements or enhancements. Except as set forth above, there have been no
changes in our internal controls over financial reporting, which have materially
affected, or are reasonably likely to materially affect, such internal controls.

We maintain disclosure controls and procedures that are designed to ensure that
information required to be disclosed in our reports, filed pursuant to the
Securities Exchange Act of 1934, is recorded, processed, summarized and reported
within the time periods specified in the SEC's rules and forms, and that such
information is accumulated and communicated to our management, including our
Chief Executive Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure.

We carried out an evaluation as of the end of the period covered by this report
on Form 10-Q, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing and upon
taking into consideration the steps described above to remediate the noted
material weakness, the Company's Chief Executive Officer and Chief Financial
Officer concluded that the Company's disclosure controls and procedures were
effective.

It should be noted that the design of any system of controls is based upon
certain assumptions about the likelihood of future events, and there can be no
assurance that such design will succeed in achieving its stated objective under
all potential future conditions, regardless of how remote. However, the
Company's Chief Executive Officer and the Company's Chief Financial Officer
believe the Company's disclosure controls and procedures provide reasonable
assurance that the disclosure controls and procedures are effective.

                                       21

<PAGE>

                                     PART II

ITEM 2.  CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY
         SECURITIES

         (e) Issuer Purchases of Equity Securities

<TABLE>
<CAPTION>
                                                               (c) Total Number   (d) Approximate
                                                                   of Shares       Dollar Value of
                                                               Purchased as Part   Shares that May
                      (a) Total Number     (b) Average Price       of Publicly     Yet Be Purchased
                          of Shares          Paid per Share    Announced Plans    Under the Plans or
    Period                Purchased                               or Programs          Programs
--------------        ----------------     -----------------   -----------------  ------------------
<S>                   <C>                  <C>                 <C>                <C>
July 2004                       -                     -                    -        $ 86,435,340
August 2004               550,630               $ 13.67              550,630        $ 78,910,598
September 2004             85,000               $ 14.46               85,000        $ 77,681,477
Total                     635,630               $ 13.77              635,630        $ 77,681,477
</TABLE>

         Effective November 12, 2003, the Board of Directors authorized a stock
         buy-back program of up to $100 million. Purchases have occurred and
         will continue to occur from time to time in the open market to offset
         the possible dilutive effects of shares issued under employee benefit
         plans, for possible use in future acquisitions, and for general and
         other corporate purposes.

ITEM 5.  OTHER INFORMATION

         Legal Proceedings

         Our Insurance Services division is involved in litigation with a West
         Coast-based distributor of life insurance products, with which we had a
         former business relationship. We intend to continue to vigorously
         defend the claims asserted and have asserted a number of counterclaims.
         We believe that we have adequate defenses against claims arising in
         such litigation and that the outcome of this matter will not have a
         material adverse effect upon our financial position, results of
         operations or cash flows.

         Following the Company's May 17, 2004 announcement regarding the
         restatement of its financial results, seven putative class action and
         two derivative lawsuits were filed against the Company and certain of
         its current and former officers in the United States District Court for
         the Southern District of New York. By order of the Court, all but one
         of the putative class actions have been consolidated into a single
         action, and on October 25, 2004, plaintiffs filed a consolidated
         amended complaint. The complaint purports to be brought on behalf of
         all shareholders who purchased the Company's securities between October
         23, 2000 and May 17, 2004 and generally asserts that the Company,
         certain of its officers, and its auditor, PricewaterhouseCoopers LLP,
         allegedly violated the federal securities laws in connection with the
         purported issuance of false and misleading information concerning the
         Company's financial condition. The complaint seeks damages in an
         unspecified amount as well as unspecified equitable/injunctive relief.

         The remaining putative class action purports to be brought on behalf of
         all persons who acquired non-publicly traded BISYS securities from the
         Company as part of private equity transactions during the period
         October 23, 2000 to May 17, 2004. The complaint generally asserts that
         the Company and certain of its officers allegedly violated the federal
         securities laws in connection with the purported issuance of false and
         misleading information concerning the Company's financial condition,
         and seeks damages in an unspecified amount. Plaintiffs have not yet
         filed an amended complaint.

         The derivative complaints purport to be brought on behalf of the
         Company and generally assert that certain officers and directors are
         liable for alleged breaches of fiduciary duties, abuse of control,
         gross mismanagement, waste, and unjust enrichment that purportedly
         occurred between October 23, 2000 and the present. The derivative
         complaints seek disgorgement, constructive trust, and damages in an

                                       22

<PAGE>

         unspecified amount. The Court has ordered that the derivative actions
         be consolidated with one another; plaintiffs have not yet filed a
         consolidated amended complaint.

         The Company intends to defend itself vigorously against these claims
         but is unable to determine the ultimate outcome.

         SEC Investigation

         We notified the SEC in May 2004 of our intention to restate prior
         period financial results. Subsequently, the SEC commenced an
         investigation into the facts and circumstances related to the
         restatement. We have cooperated and intend to continue to cooperate
         with the SEC's investigation. We cannot predict when the SEC will
         conclude its investigation or the outcome or impact thereof.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

   (a)   EXHIBITS

         Exhibit 10.1 - Form of Incentive Stock Option Agreement

         Exhibit 10.2 - Form of Non-Qualified Stock Option Agreement

         Exhibit 10.3 - Form of Restricted Stock Agreement

         Exhibit 31.1 - Rule 13a-14(a)/15d-14(a) Certification of Chief
                        Executive Officer

         Exhibit 31.2 - Rule 13a-14(a)/15d-14(a) Certification of Chief
                        Financial Officer

         Exhibit 32 - Section 1350 Certifications

   (b)   REPORTS ON FORM 8-K

         A Current Report on Form 8-K, dated September 27, 2004, was filed with
         the Securities and Exchange Commission to report on the announcement of
         the Company's filing of its previously delayed Annual Report on Form
         10-K (Item 8).

         A Current Report on Form 8-K, dated August 31, 2004, was filed with the
         Securities and Exchange Commission to report on the resignation of Lynn
         Mangum, Chairman and Director of the Company, and appointment of his
         replacement as well as a newly elected Director and member of the Audit
         Committee (Item 5).

                                       23

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                          THE BISYS GROUP, INC.

Date: November 8, 2004                    By:  /s/ James L. Fox
                                              ----------------------------------

                                              James L. Fox
                                              Executive Vice President and
                                              Chief Financial Officer
                                              (Duly Authorized Officer)

                                       24

<PAGE>

                              THE BISYS GROUP, INC.
                                  EXHIBIT INDEX

Exhibit No.

      (10.1) Form of Incentive Stock Option Agreement

      (10.2) Form of Non-Qualified Stock Option Agreement

      (10.3) Form of Restricted Stock Agreement

      (31.1) Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

      (31.2) Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer

      (32) Section 1350 Certifications

                                       25