<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 MARCH 31, 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: 0-19922

                              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 MAY 31, 2004, THERE WERE 120,674,987 SHARES OF COMMON STOCK, PAR VALUE
$0.02 PER SHARE, OF THE REGISTRANT OUTSTANDING.

                        This document contains 85 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 and nine
                    months ended March 31, 2004 and 2003                                                   3

              Condensed Consolidated Balance Sheets as of March 31, 2004 and June
                    30, 2003                                                                               4

              Condensed Consolidated Statements of Cash Flows for the nine months
                    ended March 31, 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                                                                   19

         Item 4.  Controls and Procedures                                                                 25

PART II.  OTHER INFORMATION

         Item 2.  Changes in Securities, Use of Proceeds and Issuer Purchases of Equity
                  Securities                                                                              26

         Item 3.  Defaults upon Senior Securities                                                         26

         Item 5.  Other Information                                                                       26

         Item 6.  Exhibits and Reports on Form 8-K                                                        27

SIGNATURES                                                                                                28

EXHIBIT INDEX                                                                                             29
</TABLE>

                                EXPLANATORY NOTE

The Company has determined that it is appropriate to restate previously issued
financial statements to record adjustments for correction of errors resulting
from various accounting matters described herein (see Note 11). The Company
intends to restate its financial results for the fiscal years ended June 30,
2003, 2002 and 2001 and the quarters ended December 31 and September 30, 2003.
The adjustments fall into three general categories: adjustments to commissions
receivable in the Life Insurance division, adjustments relating to goodwill and
deferred taxes established in acquisition accounting for certain acquired
entities in the Life Insurance division, and adjustments to agent commissions
payable in the Life Insurance division. Additionally, as a result of the
restatement adjustments, adjustments to the computation of deferred tax assets
and liabilities were also recorded.

The restatement principally arose from the Company's continuing review and
analysis of estimates used in determining the level of commissions receivable in
the Life Insurance Services division. Based upon this review and analysis, the
Company determined that an adjustment of $80.0 million to reduce commissions
receivable in its Life Insurance division, together with corresponding
adjustments to revenues and expenses, should be recorded and be reflected in a
restatement of its financial results for the affected periods, as described
above. The adjustment to commissions receivable of $80.0 million is primarily
attributable to the over accrual of revenue, based on assumptions underlying the
estimates that were subsequently determined to be incorrect. The assumptions
were used to compute certain first year, bonus and renewal commissions
receivable during the period July 1999 through December 2003. In connection with
the aforementioned review, the Company also identified adjustments relating to
acquisition accounting for certain acquired entities in the Life Insurance
business, resulting in an adjustment to goodwill, deferred taxes and revenue
over the affected periods of $21.0 million. This adjustment reflects the
recording of commissions receivable as of the date of acquisition to convert the
acquired entity from the cash basis to the accrual basis of accounting,
resulting in a corresponding downward adjustment to revenue incorrectly accrued
following each such acquisition. Additionally, adjustments to commissions
payable of $2.6 million, together with corresponding adjustments to net
revenues, were identified as a result of an understatement in agent commissions
payable.

                                       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             Nine Months Ended
                                                March 31,                     March 31,
                                       --------------------------    --------------------------
                                          2004           2003           2004            2003
                                                      As Restated                   As Restated
                                       -----------    -----------    -----------    -----------
<S>                                    <C>            <C>            <C>            <C>
Revenues                               $   272,332    $   238,074    $   770,147    $   686,227
                                       -----------    -----------    -----------    -----------
Operating costs and expenses:
   Service and operating                   171,786        139,746        488,019        409,863
   Selling, general and
     administrative                         48,673         43,892        144,199        131,071
   Amortization of intangible assets         7,235          4,809         19,734         13,474
   Restructuring, impairment and
     other charges                          10,815              -         25,590         12,079
                                       -----------    -----------    -----------    -----------
Total operating costs and expenses         238,509        188,447        677,542        566,487
                                       -----------    -----------    -----------    -----------

Operating earnings                          33,823         49,627         92,605        119,740
Interest income                                391            270            998          1,178
Interest expense                            (4,741)        (4,475)       (14,140)       (13,428)
                                       -----------    -----------    -----------    -----------
Income before income taxes                  29,473         45,422         79,463        107,490
Income taxes                                10,079         16,435         33,912         40,287
                                       -----------    -----------    -----------    -----------
Net income                             $    19,394    $    28,987    $    45,551    $    67,203
                                       ===========    ===========    ===========    ===========

Basic earnings per share               $      0.16    $      0.24    $      0.38    $      0.56
                                       ===========    ===========    ===========    ===========

Diluted earnings per share             $      0.16    $      0.24    $      0.38    $      0.55
                                       ===========    ===========    ===========    ===========
</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>
                                                                 March 31,       June 30,
                                                                   2004            2003
                                                                               As Restated
                                                               ------------    ------------
<S>                                                            <C>             <C>
ASSETS

Current assets:
   Cash and cash equivalents                                   $     88,962    $     79,558
   Restricted cash                                                   61,995          26,603
   Accounts receivable, net                                          99,202          96,237
   Insurance premiums and commissions receivable, net                81,479          87,535
   Deferred tax asset                                                10,865          45,202
   Other current assets                                              47,767          34,806
                                                               ------------    ------------
     Total current assets                                           390,270         369,941
   Property and equipment, net                                      112,757         107,152
   Goodwill                                                         803,613         731,174
   Intangible assets, net                                           218,100         206,036
   Other assets                                                      33,859          43,839
                                                               ------------    ------------
     Total assets                                              $  1,558,599    $  1,458,142
                                                               ============    ============
LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Short-term borrowings                                       $    170,000    $    172,000
   Accounts payable                                                  20,330          21,518
   Insurance premiums and commissions payable                       110,395          81,840
   Other current liabilities                                        131,176         128,645
                                                               ------------    ------------
     Total current liabilities                                      431,901         404,003
   Long-term debt                                                   300,000         300,000
   Deferred tax liability                                            56,229          34,184
   Other liabilities                                                  4,743           4,026
                                                               ------------    ------------
     Total liabilities                                              792,873         742,213
                                                               ------------    ------------
Stockholders' equity:
   Common stock, $0.02 par value, 320,000,000 shares
     authorized, 120,855,235 and 120,274,571 shares issued            2,417           2,405
   Additional paid-in capital                                       389,557         378,986
   Retained earnings                                                386,933         348,401
   Notes receivable from stockholders                                (8,172)        (10,776)
   Employee benefit trust, 345,230 and 344,207 shares                (5,550)         (5,676)
   Deferred compensation                                              5,335           5,752
   Unearned compensation - restricted stock                          (7,177)              -
   Accumulated other comprehensive income (loss)                      5,437            (340)
   Treasury stock at cost, 169,822 and 141,118 shares                (3,054)         (2,823)
                                                               ------------    ------------
     Total stockholders' equity                                     765,726         715,929
                                                               ------------    ------------
     Total liabilities and stockholders' equity                $  1,558,599    $  1,458,142
                                                               ============    ============
</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>
                                                                                          Nine Months Ended
                                                                                              March 31,
                                                                                    ----------------------------
                                                                                        2004            2003
                                                                                                    As Restated
                                                                                    ------------    ------------
<S>                                                                                 <C>             <C>
Cash flows from operating activities:
Net income                                                                          $     45,551    $     67,203
Adjustments to reconcile net income to net cash provided by operating activities:
   Restructuring, impairment and other charges                                            25,590          12,079
   Depreciation and amortization                                                          45,172          36,223
   Deferred income tax provision                                                           8,389          (1,805)
   Change in operating assets and liabilities, net of effects from acquisitions           14,594           4,812
                                                                                    ------------    ------------
Net cash provided by operating activities                                                139,296         118,512
                                                                                    ------------    ------------
Cash flows from investing activities:
   Acquisitions of businesses, net of cash acquired                                      (56,926)       (126,396)
   Purchase of intangible assets                                                               -         (23,925)
   Capital expenditures                                                                  (27,763)        (33,821)
   Change in other investments                                                             1,486          (2,203)
                                                                                    ------------    ------------
Net cash used in investing activities                                                    (83,203)       (186,345)
                                                                                    ------------    ------------
Cash flows from financing activities:
   Proceeds from short-term borrowings                                                   212,000         248,000
   Repayment of short-term borrowings                                                   (314,000)       (143,000)
   Proceeds from long-term debt                                                          100,000               -
   Issuance of common stock                                                                5,021           4,581
   Proceeds from exercise of stock options                                                 6,767           5,398
   Repurchases of common stock                                                           (58,009)        (33,410)
   Other                                                                                   1,532            (251)
                                                                                    ------------    ------------
Net cash (used in) provided by financing activities                                      (46,689)         81,318
                                                                                    ------------    ------------

Net increase in cash and cash equivalents                                                  9,404          13,485

Cash and cash equivalents at beginning of period                                          79,558          78,371
                                                                                    ------------    ------------

Cash and cash equivalents at end of period                                          $     88,962    $     91,856
                                                                                    ============    ============
</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
                                   (UNAUDITED)

Throughout these Notes to Condensed Consolidated Financial Statements, all
referenced amounts for prior periods and prior period comparisons reflect the
balance and amounts on a restated basis. The Company expects to file amended
Form 10-K and Form 10-Q reports to reflect its restated results of operations
for prior periods as soon as practicable. For information on the restatement,
see Note 11, Prior Year Restatements, to these financial statements.

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 business process 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 2003 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 after considering restatement amounts) which are, in
      the opinion of management, necessary to fairly state this information.

      RECLASSIFICATION

      Certain reclassifications have been made to the fiscal year 2003 financial
      statements to conform to the fiscal year 2004 presentation.

      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 from the
      Company's life insurance brokerage division. In its capacity as a
      commercial property and casualty wholesale broker, the Company collects
      premiums from other agents and brokers and, after deducting its
      commissions, remits the premiums to the respective insurers.

      Net commission revenue from insurance distribution operations is
      recognized when all placement services have been provided, protection is
      afforded under the insurance policy, and the premium is known or can be
      reasonably estimated and is billable.

      RESTRICTED CASH

      Unremitted insurance premiums are held in a fiduciary capacity and
      approximated $62.0 million and $26.6 million at March 31, 2004 and June
      30, 2003, 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.

      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 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.

      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 FASB
      Statement No. 123, "Accounting for Stock-Based Compensation," (in
      thousands, except for per share amounts):

                                       6

<PAGE>

<TABLE>
<CAPTION>
                                                Three Months Ended              Nine Months Ended
                                                    March 31,                        March 31
                                           ----------------------------    ----------------------------
                                               2004            2003            2004            2003
                                                           As Restated                     As Restated
                                           ------------    ------------    ------------    ------------
<S>                                        <C>             <C>             <C>             <C>
Net income, as reported                    $     19,394    $     28,987    $     45,551    $     67,203

Add: Stock-based employee compensation
   expense included in reported net
   income, net of related tax effects               454               -             917               -

Deduct: Total stock-based employee
   compensation expense determined
   under fair value based method, net
   of related tax effects                        (4,352)         (4,506)        (12,449)        (13,247)
                                           ------------    ------------    ------------    ------------

Pro forma net income                       $     15,496    $     24,481    $     34,019    $     53,956
                                           ============    ============    ============    ============

Earnings per share:
   Basic, as reported                      $       0.16    $       0.24    $       0.38    $       0.56
                                           ============    ============    ============    ============
   Basic, pro forma                        $       0.13    $       0.20    $       0.28    $       0.45
                                           ============    ============    ============    ============

   Diluted, as reported                    $       0.16    $       0.24    $       0.38    $       0.55
                                           ============    ============    ============    ============
   Diluted, pro forma                      $       0.13    $       0.20    $       0.28    $       0.44
                                           ============    ============    ============    ============
</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 net commissions receivable, the allowance for doubtful
      accounts, goodwill and intangible assets, revenue recognition, income
      taxes, contingencies, and restructuring, impairment and other charges.

      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 (in thousands):

<TABLE>
<CAPTION>
                                                Three Months Ended               Nine Months Ended
                                                     March 31,                       March 31,
                                           ----------------------------    ----------------------------
                                               2004            2003            2004            2003
                                                           As Restated                     As Restated
                                           ------------    ------------    ------------    ------------
<S>                                        <C>             <C>             <C>             <C>
Net income                                 $     19,394    $     28,987    $     45,551    $     67,203
Unrealized gain on investments, net of
  deferred taxes                                  1,635               -           4,773               -
Foreign currency translation adjustment             387             (61)          1,004             134
                                           ------------    ------------    ------------    ------------
  Total comprehensive income               $     21,416    $     28,926    $     51,328    $     67,337
                                           ============    ============    ============    ============
</TABLE>

                                       7

<PAGE>

4.    EARNINGS PER SHARE

      Basic and diluted EPS computations for the three and nine months ended
      March 31, 2004 and 2003 are as follows (in thousands, except per share
      amounts):

<TABLE>
<CAPTION>
                                                Three Months Ended               Nine Months Ended
                                                     March 31,                       March 31,
                                           ----------------------------    ----------------------------
                                               2004            2003            2004            2003
                                                           As Restated                     As Restated
                                           ------------    ------------    ------------    ------------
<S>                                        <C>             <C>             <C>             <C>
Basic EPS

Net income                                 $     19,394    $     28,987    $     45,551    $     67,203
                                           ============    ============    ============    ============
Weighted average common shares
 outstanding                                    120,217         119,565         119,774         119,501
                                           ============    ============    ============    ============

Basic earnings per share                   $       0.16    $       0.24    $       0.38    $       0.56
                                           ============    ============    ============    ============

Diluted EPS

Net income                                 $     19,394    $     28,987    $     45,551    $     67,203
                                           ============    ============    ============    ============
Weighted average common shares
 outstanding                                    120,217         119,565         119,774         119,501

Assumed conversion of common shares
 issuable under stock-based compensation
 plans                                            1,222           1,206           1,127           2,127
                                           ------------    ------------    ------------    ------------
Weighted average common and common
 equivalent shares outstanding                  121,439         120,771         120,901         121,628
                                           ============    ============    ============    ============

Diluted earnings per share                 $       0.16    $       0.24    $       0.38    $       0.55
                                           ============    ============    ============    ============
</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 (in thousands, except
      per share amounts):

<TABLE>
<CAPTION>
                                                    Three Months Ended                    Nine Months Ended
                                                        March 31,                              March 31,
                                           -----------------------------------    ----------------------------------
                                                 2004               2003                2004              2003
                                                                As Restated                           As Restated
                                           ----------------   ----------------    ----------------  ----------------
<S>                                        <C>                <C>                 <C>               <C>
Number of options excluded                            7,269              8,267               7,396             5,858

Option price per share                     $16.89 to $35.30   $16.00 to $35.30    $16.70 to $35.30  $21.25 to $35.30

Average market price of common shares
 for the period                            $          16.83   $          15.84    $          16.28  $          19.36
</TABLE>

5.    RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

      During the three and nine months ended March 31, 2004, the Company
      recorded pre-tax restructuring, impairment and other charges of $10.8
      million and $25.6 million, respectively. The charges relate to the

                                       8

<PAGE>

      integration, consolidation, and reorganization of certain business
      operations, particularly in the Company's European Fund Services division
      and the Insurance and Education Services group, and the recording of
      estimated amounts for litigation expenses and contractual disputes.

      A summary of these items follows (in thousands):

<TABLE>
<CAPTION>
                                                            Three Months Ended           Nine Months Ended
                                                              March 31, 2004              March 31, 2004
                                                            ------------------           -----------------
<S>                                                         <C>                          <C>
Restructuring charges                                       $            2,164           $           9,577
Impairment charges                                                       3,350                       7,865
Litigation and other charges                                             5,301                       8,148
                                                            ------------------           -----------------
  Total restructuring, impairment and other charges         $           10,815           $          25,590
                                                            ==================           =================
</TABLE>

      Restructuring charges of $9.6 million during the nine months ended March
      31, 2004 were comprised of severance totaling $7.4 million and lease
      termination and other costs of $2.1 million. Severance charges resulted
      from the termination or planned termination of approximately 330 employees
      representing all levels of staffing.

      The following summarizes activity with respect to the Company's
      restructuring activities for the nine months ended March 31, 2004 (in
      thousands):

<TABLE>
<S>                                   <C>
Expense provision
   Employee severance                 $  7,434
   Facility closure                      2,143
                                      --------
                                         9,577
                                      --------
Cash payments and other                  5,821
                                      --------
Remaining accrual at March 31, 2004
Employee severance                       2,341
Facility closure                         1,415
                                      --------
                                      $  3,756
                                      --------
</TABLE>

      In connection with the aforementioned restructuring plans, certain
      severance costs approximating $1.8 million and lease termination costs of
      approximately $1.2 million are expected to be recognized throughout the
      remainder of fiscal 2004 and the first half of fiscal 2005 in accordance
      with FAS No. 146, "Accounting for Costs Associated with Exit or Disposal
      Activities."

      The Company recorded pre-tax restructuring charges of $12.1 million during
      the nine months ended March 31, 2003 related to the integration,
      consolidation and relocation of certain business operations, primarily as
      a result of acquisition activity and the downsizing of certain areas in
      the investment, insurance, education, and check imaging businesses in
      fiscal 2003. The restructuring charge included a provision of $7.2 million
      for severance-related costs for approximately 300 employees and $4.9
      million for facility closure and related costs. At March 31, 2004, an
      accrual of $0.9 million remains from this prior year charge and relates to
      lease costs for facility closures.

      The Company recorded asset impairment charges of $7.9 million during the
      nine months ended March 31, 2004, consisting primarily of the following
      items:

            -     a $3.9 million charge in the Investment Services segment for
                  the 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 during the calendar year 2004 following the
                  acquisition of two of the Company's significant customers by
                  acquirers with existing fund services capabilities;

            -     a $2.2 million charge in the Information Services segment for
                  write-downs of software licenses and obsolete inventory held
                  for resale, due to lack of sufficient demand;

            -     a $1.2 million charge in the Insurance and Education Services
                  segment for impairment of a customer-related intangible asset
                  deemed to be no longer recoverable from related future cash
                  flows.

                                       9

<PAGE>

      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.

      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 $3.1 million related to breach of contract claims
      in the life insurance services business. The amount of the charge includes
      an estimated resolution amount and actual legal fees incurred during the
      nine months ended March 31, 2004. The Company intends to continue to
      vigorously defend the claims asserted and has asserted a number of
      counterclaims. Additionally, during the three months ended March 31, 2004,
      the Company recorded a charge of $5.0 million in the Life Insurance
      division related to estimated resolution amounts with certain third
      parties arising from contractual disputes over the obligations of the
      parties.

6.    INTANGIBLE ASSETS AND GOODWILL

      INTANGIBLE ASSETS

      At March 31, 2004, acquired intangible assets were comprised of the
      following (in thousands):

<TABLE>
<CAPTION>
                            Gross Carrying     Accumulated         Net Book
                                Amount         Amortization         Value
                            --------------    --------------    --------------
<S>                         <C>               <C>               <C>
Customer related            $      218,321    $      (46,193)   $      172,128
Noncompete agreements               45,862           (15,396)           30,466
Other                               23,195            (7,689)           15,506
                            --------------    --------------    --------------
  Total                     $      287,378    $      (69,278)   $      218,100
                            ==============    ==============    ==============
</TABLE>

      At June 30, 2003, acquired intangible assets were comprised of the
      following (in thousands):

<TABLE>
<CAPTION>
                            Gross Carrying     Accumulated         Net Book
                                Amount         Amortization         Value
                            --------------    --------------    --------------
<S>                         <C>               <C>               <C>
Customer related            $      190,917    $      (32,618)   $      158,299
Noncompete agreements               42,451           (11,629)           30,822
Other                               23,070            (6,155)           16,915
                            --------------    --------------    --------------
  Total                     $      256,438    $      (50,402)   $      206,036
                            ==============    ==============    ==============
</TABLE>

      All of the Company's acquired intangible assets are subject to
      amortization. Amortization expense for acquired intangible assets was $7.2
      million and $19.7 million for the three and nine months ended March 31,
      2004 and $18.8 million for the year ended June 30, 2003. Estimated annual
      amortization expense is $27.0 million in fiscal 2004, $28.1 million in
      fiscal 2005, $27.0 million in fiscal 2006, $25.7 million in fiscal 2007,
      and $24.9 million in fiscal 2008.

      In connection with the Company's plan to reorganize its Life Insurance
      division and restructure its European fund services operations by exiting
      certain European locations during calendar year 2004, impairment losses of
      $2.0 million were recognized during the nine months ended March 31, 2004
      for customer-related intangibles. The amount of the impairment losses
      represented the remaining net book value of the intangibles.

                                       10

<PAGE>

      GOODWILL

      The changes in the carrying amount of goodwill by business segment for the
      nine months ended March 31, 2004 are as follows (in thousands):

<TABLE>
<CAPTION>
                                 Investment      Insurance and      Information
                                  Services     Education Services     Services        Total
                                 ----------    ------------------   -----------    ----------
<S>                              <C>           <C>                  <C>            <C>
Balance, July 1, 2003, as
 restated                        $  311,366    $          384,418   $    35,390    $  731,174

Additions                                 -                71,160             -        71,160

Adjustments to previous
 acquisitions                             -                 1,279             -         1,279
                                 ----------    ------------------   -----------    ----------
Balance, March 31, 2004          $  311,366    $          456,857   $    35,390    $  803,613
               === ====          ==========    ==================   ===========    ==========
</TABLE>

7.    BORROWINGS

      In March 2004, the Company entered into a new senior unsecured credit
      facility. The $400 million facility contains a $300 million revolving line
      of credit facility, of which $70 million is outstanding at March 31, 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
      agent fee of $25,000 and 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, among other things, the Company to maintain
      certain financial covenants and limits the Company's ability to incur
      future indebtedness and to pay dividends. As of March 31, 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
      ($3.2 million at March 31, 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
      March 31, 2004, the weighted average interest rate of the credit facility
      borrowings was 2.28%.

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

      As part of the Credit Agreement with lenders governing the senior
      unsecured credit facility, the Company made certain representations about
      its prior period financial statements. In light of the need for
      adjustments to these prior period financial statements, the lenders
      consider these representations to have been inaccurate when made, and
      therefore, the lenders have asserted that there has been a breach under
      the Credit Agreement causing the Company to be in default. Based on the
      Company's expectation of the extent of such adjustment at that time, the
      Company procured a waiver from the lenders which allow the Company to
      continue to rollover certain LIBOR-based borrowings. However, until the
      waiver becomes permanent, the terms of the waiver do not cure the asserted
      default and preclude the Company from drawing down additional borrowings
      under the credit facility. The waiver will become permanent if the Company
      files its amended Form 10-K for the fiscal year ended June 30, 2003 prior
      to the due date of the Company's Form 10-K for the fiscal year ended June
      30, 2004, which the Company expects to do, and the other conditions of the
      waiver are met. In addition, the lenders have informed the Company that,
      based on the information contained in this report, an additional waiver
      may be required. The lenders have asserted that they have the right to
      accelerate payment of outstanding borrowings under the credit facility
      until the waiver becomes permanent. Accordingly, all outstanding
      borrowings under the revolving line of credit and the term loan portion of
      the senior credit facility have been classified as a current obligation.
      The Company is in discussions with its lenders and believes that it will
      be successful in resolving these matters. However, in the unlikely event
      that the Company is unable to successfully resolve these matters with its
      lenders and the payment of outstanding borrowings under the credit
      facility is accelerated, there could be a material adverse effect on the
      Company's ability to meet its short-term working capital needs. Should
      this occur the Company believes that alternative funding sources are
      available to meet its working capital needs.


                                       11

<PAGE>

      Debt outstanding at March 31, 2004 and June 30, 2003 is as follows (in
      thousands):

<TABLE>
<CAPTION>
                                              March 31, 2004                   June 30, 2003
                                        ----------------------------    ----------------------------
                                                         Due within                      Due within
                                         Long-term        One Year       Long-term        One Year
                                        ------------    ------------    ------------    ------------
<S>                                     <C>             <C>             <C>             <C>
Senior credit facility, term loan,
at a rate of 2.375%                     $          -    $    100,000    $          -    $          -

Senior credit facility, revolving
line of credit, at a rate of 2.15%
and 2.00%, respectively                            -          70,000               -         172,000

Convertible subordinated 4% notes            300,000               -         300,000               -
                                        ------------    ------------    ------------    ------------
   Total Debt                           $    300,000    $    170,000    $    300,000    $    172,000
                                        ============    ============    ============    ============
</TABLE>

8.    SEGMENT INFORMATION

      The following table sets forth revenue and operating income by business
      segment and for corporate operations for the three and nine months ended
      March 31, 2004 and 2003. Restructuring, impairment and other charges are
      excluded from the operating results of the segment as management does not
      consider such charges in its assessment of segment performance, or in
      allocating resources among segments.

<TABLE>
<CAPTION>
                                                               (in thousands)
                                             Three Months Ended              Nine Months Ended
                                                  March 31,                       March 31,
                                        ----------------------------    ----------------------------
                                            2004            2003            2004            2003
                                                         As Restated                     As Restated
                                        ------------    ------------    ------------    ------------
<S>                                     <C>             <C>             <C>             <C>
Revenue:

Investment Services                     $    148,295    $    125,050    $    414,677    $    367,847
Insurance and Education Services              67,458          57,059         190,124         159,285
Information Services                          56,579          55,965         165,346         159,095
                                        ------------    ------------    ------------    ------------
   Total revenue                        $    272,332    $    238,074    $    770,147    $    686,227
                                        ============    ============    ============    ============
Operating income (loss):
Investment Services                     $     18,034    $     20,167    $     50,904    $     54,123
Insurance and Education Services              15,052          18,782          39,353          51,444
Information Services                          16,900          15,779          44,626          42,009
Corporate                                     (5,348)         (5,101)        (16,688)        (15,757)
                                        ------------    ------------    ------------    ------------
   Total operating income               $     44,638    $     49,627    $    118,195    $    131,819
                                        ============    ============    ============    ============
Restructuring, impairment and
other charges:

Investment Services                     $      1,709      $        -    $      8,115    $      5,430
Insurance and Education Services               6,960               -          13,891           2,866
Information Services                           2,133               -           2,631           1,494
Corporate                                         13               -             953           2,289
                                        ------------    ------------    ------------    ------------
   Total restructuring, impairment
     and other charges                  $     10,815    $          -    $     25,590    $     12,079
                                        ============    ============    ============    ============
   Total consolidated operating
     earnings                           $     33,823    $     49,627    $     92,605    $    119,740
                                        ============    ============    ============    ============
</TABLE>

                                       12

<PAGE>

9.    RESTRICTED STOCK

      Pursuant to the 1999 Equity Participation Plan, the Company provides for
      awards of restricted shares of the Company's common stock to key
      management employees. Restricted shares awarded under the plan are subject
      to certain transfer and forfeiture restrictions that lapse over a
      four-year vesting period. Awards for 505,284 restricted shares were
      granted, net of forfeitures, during the first nine months of fiscal 2004
      at fair values ranging from $13.15 to $18.71 per share. Unearned
      compensation expense related to the issuance of restricted shares is
      reported as a reduction of stockholders' equity on the accompanying
      condensed consolidated financial statements and compensation expense is
      recorded ratably over the four-year vesting period, during which the
      shares are subject to transfer and forfeiture restrictions, based on the
      fair value on the award date. Compensation expense related to the issuance
      of restricted shares approximated $0.7 million and $1.5 million during the
      three and nine months ended March 31, 2004.

10.   BUSINESS COMBINATIONS

      On January 12, 2004, the Company acquired Uhlemeyer Services, Inc.
      ("Uhlemeyer"), a St. Louis-based managing general agency ("MGA") serving
      the commercial property and casualty insurance marketplace and
      specializing in distributing and servicing workers' compensation insurance
      programs. Pro forma information has not been presented due to lack of
      materiality.

      On November 10, 2003, the Company acquired USA Insurance Group, Inc.
      ("USAIG"), a Florida-based MGA serving the commercial property and
      casualty insurance marketplace. The acquisition of USAIG broadens the
      product and geographic reach of the Company's commercial property and
      casualty line of business, and complements and significantly expands its
      MGA platform.

      The Company completed its acquisition of USAIG through the exchange of
      approximately 2.8 million shares of BISYS common stock held in treasury
      and $49.7 million cash for all of the equity interests of USAIG. The
      excess purchase price over the fair value of the net tangible assets
      acquired approximates $92.7 million. Of this amount, $64.0 million was
      allocated to goodwill and $28.7 million to other identifiable intangible
      assets based on estimates of fair values and is being amortized on a
      straight-line basis over periods ranging from 5 to 10 years. USAIG's fair
      value of assets and liabilities, including transaction costs, were as
      follows (in thousands):

<TABLE>
<S>                                             <C>
Estimated fair value of assets acquired         $    141,246
Liabilities assumed                                  (52,746)
Common stock issued                                  (38,823)
                                                ------------
  Net cash paid                                 $     49,677
                                                ============
</TABLE>

      The following unaudited pro forma consolidated results of operations has
      been prepared as if the acquisition of USAIG had occurred at the beginning
      of each period (in thousands, except per share data):

<TABLE>
<CAPTION>
                                      Three Months Ended              Nine Months Ended
                                          March 31,                       March 31,
                                 ----------------------------    ----------------------------
                                     2004            2003           2004             2003
                                                  As Restated                    As Restated
                                 ------------    ------------    ------------    ------------
<S>                              <C>             <C>             <C>             <C>
Revenues                         $    272,332    $    245,240    $    780,493    $    708,570
Net income                       $     19,394    $     30,130    $     46,951    $     70,398
Diluted earnings per share       $       0.16    $       0.24    $       0.38    $       0.56
</TABLE>

      The operations of USAIG and Uhlemeyer are included in the consolidated
      financial statements since the date of acquisition.

11.   PRIOR YEAR RESTATEMENTS

      Prior to the issuance of these March 31, 2004 interim financial
      statements, the Company determined that it was appropriate to restate
      previously issued financial statements to record adjustments for
      correction of errors resulting from various accounting matters described
      below. The Company intends to restate its financial results for the fiscal
      years ended June 30, 2003, 2002 and 2001 and the quarters ended December
      31 and September 30, 2003. The adjustments fall into three general
      categories: adjustments to commissions receivable in the Life Insurance
      division, adjustments relating to goodwill and deferred taxes established
      in

                                       13

<PAGE>


      acquisition accounting for certain acquired entities in the Life Insurance
      division, and adjustments to agent commissions payable in the Life
      Insurance division. Additionally, as a result of the restatement
      adjustments, adjustments to the computation of deferred tax assets and
      liabilities were also recorded. The net impact of the restatement on net
      income for the each of the relevant periods for each such category is set
      forth below (in thousands, except per share data):

<TABLE>
<CAPTION>
                                       SIX MONTHS
                                          ENDED                              YEARS ENDED JUNE 30,
                                      DECEMBER 31,    ------------------------------------------------------------------
                                          2003           2003          2002          2001        PRE-2001       TOTAL
                                      ------------    ----------    ----------    ----------    ----------    ----------
<S>                                   <C>             <C>           <C>           <C>           <C>           <C>
Net income, as reported               $     24,857    $  111,823    $  115,861    $   85,120
                                      ------------    ----------    ----------    ----------
Pretax adjustments:
  Commissions receivable                     2,270       (11,738)      (36,060)      (23,880)      (10,567)      (79,975)
  Goodwill and deferred taxes                    -        (7,348)       (6,486)       (7,214)            -       (21,048)
  Commissions payable                         (198)       (1,221)       (1,221)            -             -        (2,640)
                                      ------------    ----------    ----------    ----------    ----------    ----------
Total pretax adjustments                     2,072       (20,307)      (43,767)      (31,094)      (10,567)     (103,663)

Tax effect of restatement
 adjustment                                    772        (6,727)      (16,604)      (13,044)         (228)      (35,831)
                                      ------------    ----------    ----------    ----------    ----------    ----------

Total net adjustments                        1,300       (13,580)      (27,163)      (18,050)   $  (10,339)   $  (67,832)
                                      ------------    ----------    ----------    ----------    ----------    ----------

Net income, as restated               $     26,157    $   98,243    $   88,698    $   67,070
                                      ============    ==========    ==========    ==========
Basic earnings per share, as
 reported                             $       0.21    $     0.93    $     0.98    $     0.74
Effect of net adjustments                     0.01         (0.11)        (0.23)        (0.16)
                                      ------------    ----------    ----------    ----------
Basic earnings per share, as
 restated                             $       0.22    $     0.82    $     0.75    $     0.58
                                      ============    ==========    ==========    ==========
Diluted earnings per share, as
 reported                             $       0.21    $     0.92    $     0.94    $     0.71
Effect of net adjustments                     0.01         (0.11)        (0.22)        (0.15)
                                      ------------    ----------    ----------    ----------
Diluted earnings per share, as
restated                              $       0.22    $     0.81    $     0.72    $     0.56
                                      ============    ==========    ==========    ==========
</TABLE>

      The restatement principally arose from the Company's continuing review and
      analysis of estimates used in determining the level of commissions
      receivable in the Life Insurance Services division. Based upon this review
      and analysis, the Company determined that an adjustment of $80.0 million
      to reduce commissions receivable in its Life Insurance division, together
      with corresponding adjustments to revenues and expenses, should be
      recorded and be reflected in a restatement of its financial results for
      the affected periods, as described above. The adjustment to commissions
      receivable of $80.0 million is primarily attributable to the over accrual
      of revenue, based on assumptions underlying the estimates that were
      subsequently determined to be incorrect. The assumptions were used to
      compute certain first year, bonus and renewal commissions receivable
      during the period July 1999 through December 2003. In connection with the
      aforementioned review, the Company also identified adjustments relating to
      acquisition accounting for certain acquired entities in the Life Insurance
      business, resulting in an adjustment to goodwill, deferred taxes and
      revenue over the affected periods of $21.0 million. This adjustment
      reflects the recording of commissions receivable as of the date of
      acquisition to convert the acquired entity from the cash basis to the
      accrual basis of accounting, resulting in a corresponding downward
      adjustment to revenue incorrectly accrued following each such acquisition.
      Additionally, adjustments to commissions payable of $2.6 million, together
      with corresponding adjustments to net revenues, were identified as a
      result of an understatement in agent commissions payable.

      The Company intends to report revised financial statements reflecting the
      impact of the restatement on the fiscal years ended June 30, 2003, 2002
      and 2001 on Form 10-K/A for the fiscal year ended June 30, 2003, as well
      as report revised financial statements reflecting the impact of the
      restatement on the quarters ended December 31 and September 30, 2003 on
      Forms 10-Q/A for each respective period, as soon as practicable. The
      Company expects to make such filings prior to the due date of the
      Company's Form 10K for the fiscal year ended June 30, 2004. The

                                       14

<PAGE>

      restatement also affects periods prior to the fiscal year ended June 30,
      2001. The net impact of the restatement on such prior periods will be
      reflected as a reduction to beginning stockholders' equity as of July 1,
      2000 in the amount of $10.3 million.

      In connection with the process, the Company restated its financial
      statements for the three and nine months ended March 31, 2003. The net
      impact of the restatement on net income for the three and nine months
      ended March 31, 2003 was a decrease in net income of $3.5 million and
      $10.8 million, respectively.

      The following table sets forth the effects of the restatement adjustments
      discussed above on the Condensed Consolidated Statement of Income for the
      three month period ended March 31, 2003 (in thousands, except per share
      amounts):

<TABLE>
<CAPTION>
                                               Three Months Ended
                                                 March 31, 2003
                                            --------------------------
                                            As Reported    As Restated
                                            -----------    -----------
<S>                                         <C>            <C>
Revenues                                    $   244,776    $   238,074
                                            -----------    -----------
Operating costs and expenses:
   Service and operating                        141,076        139,746
   Selling, general and
   administrative                                43,892         43,892
   Amortization of intangible assets              4,809          4,809
   Restructuring, impairment and
   other charges                                      -              -
                                            -----------    -----------
Total operating costs and expenses              189,777        188,447
                                            -----------    -----------

Operating earnings                               54,999         49,627
Interest income                                     270            270
Interest expense                                 (4,475)        (4,475)
                                            -----------    -----------
Income before income taxes                       50,794         45,422
Income taxes                                     18,286         16,435
                                            -----------    -----------
Net income                                  $    32,508    $    28,987
                                            ===========    ===========

Basic earnings per share                    $      0.27    $      0.24
                                            ===========    ===========

Diluted earnings per share                  $      0.27    $      0.24
                                            ===========    ===========
</TABLE>

                                       15

<PAGE>

      The following table sets forth the effects of the restatement adjustment
      discussed above on the Condensed Consolidated Statement of Income for the
      nine months ended March 31, 2003 (in thousands, except per share):

<TABLE>
<CAPTION>
                                                Nine Months Ended
                                                 March 31, 2003
                                            --------------------------
                                            As Reported    As Restated
                                            -----------    -----------
<S>                                         <C>            <C>
Revenues                                    $   705,232    $   686,227
                                            -----------    -----------
Operating costs and expenses:
   Service and operating                        412,751        409,863
   Selling, general and
   administrative                               131,071        131,071
   Amortization of intangible assets             13,474         13,474
   Restructuring, impairment and
   other charges                                 12,079         12,079
                                            -----------    -----------
Total operating costs and expenses              569,375        566,487
                                            -----------    -----------

Operating earnings                              135,857        119,740
Interest income                                   1,178          1,178
Interest expense                                (13,428)       (13,428)
                                            -----------    -----------
Income before income taxes                      123,607        107,490
Income taxes                                     45,591         40,287
                                            -----------    -----------
Net income                                  $    78,016    $    67,203
                                            ===========    ===========

Basic earnings per share                    $      0.65    $      0.56
                                            ===========    ===========

Diluted earnings per share                  $      0.64    $      0.55
                                            ===========    ===========
</TABLE>

                                       16

<PAGE>

      The following table sets forth the effects of the restatement adjustments
      discussed above on the Condensed Consolidated Balance Sheet at June 30,
      2003 (in thousands):

<TABLE>
<CAPTION>
                                                                    June 30, 2003    June 30, 2003
                                                                     As Reported      As Restated
                                                                    -------------    -------------
<S>                                                                 <C>              <C>
ASSETS

Current assets:
   Cash and cash equivalents                                        $      79,558    $      79,558
   Restricted cash                                                         26,603           26,603
   Accounts receivable, net                                                96,237           96,237
   Insurance premiums and commissions receivable, net                     169,780           87,535
   Deferred tax asset                                                      13,655           45,202
   Other current assets                                                    34,806           34,806
                                                                    -------------    -------------
     Total current assets                                                 420,639          369,941
   Property and equipment, net                                            107,152          107,152
   Goodwill                                                               749,227          731,174
   Intangible assets, net                                                 206,036          206,036
   Other assets                                                            43,839           43,839
                                                                    -------------    -------------
     Total assets                                                   $   1,526,893    $   1,458,142
                                                                    =============    =============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Short-term borrowings                                            $     172,000    $     172,000
   Accounts payable                                                        21,518           21,518
   Insurance premiums and commissions payable                              79,398           81,840
   Other current liabilities                                              127,643          128,645
                                                                    -------------    -------------
     Total current liabilities                                            400,559          404,003
   Long-term debt                                                         300,000          300,000
   Deferred tax liability                                                  37,247           34,184
   Other liabilities                                                        4,026            4,026
                                                                    -------------    -------------
     Total liabilities                                                    741,832          742,213
                                                                    -------------    -------------
Stockholders' equity:
   Common stock, $0.02 par value, 320,000,000 shares authorized,
     120,274,571 shares issued                                              2,405            2,405
   Additional paid-in capital                                             378,986          378,986
   Retained earnings                                                      417,533          348,401
   Notes receivable from stockholders                                     (10,776)         (10,776)
   Employee benefit trust, 344,207 shares                                  (5,676)          (5,676)
   Deferred compensation                                                    5,752            5,752
   Accumulated other comprehensive income (loss)                             (340)            (340)
   Treasury stock at cost, 141,118 shares                                  (2,823)          (2,823)
                                                                    -------------    -------------
     Total stockholders' equity                                           785,061          715,929
                                                                    -------------    -------------
     Total liabilities and stockholders' equity                     $   1,526,893    $   1,458,142
                                                                    =============    =============
</TABLE>

                                       17

<PAGE>

12.   SUBSEQUENT EVENTS

      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 as described in Note
      11. The Company notified the Securities and Exchange Commission ("SEC") of
      its intention to restate prior period financial results and that there
      would be a delay in the filing of its Form 10Q for the quarter ended March
      31, 2004. Subsequently, the SEC advised the Company that the SEC is
      conducting an investigation into the facts and circumstances related to
      the restatement. The Company is cooperating fully with the SEC.

      Following the Company's May 17, 2004 announcement regarding the
      restatement of its financial results, two putative class action lawsuits,
      Rosen v The Bisys Group, Inc., et al. and Vogel v The Bisys Group, Inc, et
      al., 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. The complaints purport to be brought on behalf of all
      shareholders who purchased the Company's securities between October 23,
      2000 and May 17, 2004. The complaints generally assert 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. The complaints
      seek damages in an unspecified amount against the Company. The Company
      intends to defend itself vigorously against these claims but is unable to
      determine the ultimate outcome. In addition to these lawsuits, the Company
      has seen public announcements by others purporting to file similar
      lawsuits but the Company has not seen such other complaints.

      The Audit Committee of the Company's Board of Directors is conducting an
      independent investigation into the events and circumstances that resulted
      in the restatement and has retained independent counsel to assist in such
      investigation. The Company is fully cooperating with the independent
      counsel in this ongoing investigation.

                                       18

<PAGE>

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

Throughout this discussion and analysis of financial condition and results of
operations, all referenced amounts for prior periods and prior period
comparisons reflect the balance and amounts on a restated basis.

The Company provides outsourcing solutions to and through financial
organizations. The following table presents the percentage of revenues
represented by each item in the Company's condensed consolidated statements of
income for the periods indicated:

<TABLE>
<CAPTION>
                                                           Three Months Ended              Nine Months Ended
                                                               March 31,                       March 31,
                                                      ---------------------------     ---------------------------
                                                          2004            2003            2004            2003
                                                                      As Restated                     As Restated
                                                      -----------     -----------     -----------     -----------
<S>                                                   <C>             <C>             <C>             <C>
Revenues                                                    100.0%          100.0%          100.0%          100.0%
                                                      -----------     -----------     -----------     -----------
Operating costs and expenses:
   Service and operating                                     63.0            58.7            63.4            59.7
   Selling, general and administrative                       17.9            18.4            18.7            19.1
   Amortization of intangible assets                          2.7             2.0             2.6             2.0
   Restructuring, impairment and other charges                4.0               -             3.3             1.8
                                                      -----------     -----------     -----------     -----------
Total operating costs and expenses                           87.6            79.1            88.0            82.6
                                                      -----------     -----------     -----------     -----------
Operating earnings                                           12.4            20.9            12.0            17.4
Interest income                                               0.1             0.1             0.1             0.2
Interest expense                                             (1.7)           (1.9)           (1.8)           (1.9)
                                                      -----------     -----------     -----------     -----------
Income before income taxes                                   10.8            19.1            10.3            15.7
Income taxes                                                  3.7             6.9             4.4             5.9
                                                      -----------     -----------     -----------     -----------
Net income                                                    7.1%           12.2%            5.9%            9.8%
                                                      ===========     ===========     ===========     ===========
</TABLE>

COMPARISON OF THE THREE MONTHS ENDED MARCH 31, 2004 WITH THE THREE MONTHS ENDED
MARCH 31, 2003.

      Revenues increased 14.4% from $238.1 million for the three months ended
      March 31, 2003 to $272.3 million for the three months ended March 31,
      2004. This growth was derived from acquired businesses during the past
      twelve months, sales to new clients, existing client growth, and cross
      sales to existing clients. Internal revenue growth approximated 8% for the
      three months ended March 31, 2004 over the same period last year.

      Service and operating expenses increased 23.0% from $139.7 million for the
      three months ended March 31, 2003 to $171.8 million for the three months
      ended March 31, 2004 and increased as a percentage of revenues from 58.7%
      to 63.0%. The dollar and percentage increase resulted from additional
      costs associated with greater revenues, lower margins in the Investment
      Services segment, principally in the 401(k) administration business, and
      changes in the mix of the Company's business.

      Selling, general and administrative expenses increased 10.9% from $43.9
      million for the three months ended March 31, 2003 to $48.7 million for the
      three months ended March 31, 2004 and decreased as a percentage of
      revenues from 18.4% to 17.9%. 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 $2.4 million for the three
      months ended March 31, 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 $0.3 million for the three months ended March
      31, 2004 over the same period last year primarily due to the interest
      costs associated with higher average borrowings under the Company's
      revolving credit facility.

      The income tax provision of $10.1 million for the three months ended March
      31, 2004 decreased from $16.4 million for the three months ended March 31,
      2003, due to lower taxable income. The provision represents an

                                       19

<PAGE>

      effective tax rate, excluding the impact of restructuring, impairment and
      other charges, of 35.0% and 36.2% for the periods ended March 31, 2004 and
      2003, respectively. The decrease in the effective tax rate is primarily
      due to a state tax valuation allowance adjustment taken during the quarter
      ended March 31, 2004.

      Operating earnings, before amortization of intangibles and restructuring,
      impairment and other charges, resulted in margins of 19.0% and 22.9% for
      the three months ended March 31, 2004 and 2003, respectively. The margin
      decrease was primarily due to a significant margin decline in the
      Insurance and Education Services segment as a result of a decline in
      internal revenue and change in the mix of business.

COMPARISON OF THE NINE MONTHS ENDED MARCH 31, 2004 WITH THE NINE MONTHS ENDED
MARCH 31, 2003.

      Revenues increased 12.2% from $686.2 million for the nine months ended
      March 31, 2003 to $770.1 million for the nine months ended March 31, 2004.
      This growth was derived largely from acquired businesses during the past
      twelve months. Internal revenue growth approximated 6% for the nine months
      ended March 31, 2004 over the same period last year.

      Service and operating expenses increased 19.1% from $409.9 million for the
      nine months ended March 31, 2003 to $488.0 million for the nine months
      ended March 31, 2004 and increased as a percentage of revenues from 59.7%
      to 63.4%. The dollar and percentage increase resulted from additional
      costs associated with greater revenues, a higher cost base in certain
      areas of the Life Insurance Services division, lower margins in the 401(k)
      administration business, and changes in the mix of the Company's business.

      Selling, general and administrative expenses increased 10.0% from $131.1
      million for the nine months ended March 31, 2003 to $144.2 million for the
      nine months ended March 31, 2004 and decreased as a percentage of revenues
      from 19.1% to 18.7%. 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 $6.3 million for the nine
      months ended March 31, 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 $0.7 million for the nine months ended March
      31, 2004 over the same period last year primarily due to the interest
      costs associated with higher average borrowings under the Company's
      revolving credit facility.

      The income tax provision of $33.9 million for the nine months ended March
      31, 2004 decreased from $40.3 million for the nine months ended March 31,
      2003, due to lower taxable income. The tax provision for the nine months
      ended March 31, 2004 also includes recognition of an additional tax
      valuation allowance of $5.2 million for deferred tax assets associated
      with tax loss carryforwards from the European mutual fund services
      operations that are not expected to be realized. The provision represents
      an effective tax rate, excluding the impact of restructuring, impairment
      and other charges, of 36.4% and 37.5% for the nine months ended March 31,
      2004 and 2003, respectively. The decrease in the effective tax rate is
      primarily due to a state tax valuation allowance adjustment taken during
      the third fiscal quarter of 2004.

      Operating earnings, before amortization of intangibles and restructuring,
      impairment and other charges, resulted in margins of 17.9% and 21.2% for
      the nine months ended March 31, 2004 and 2003, respectively. The margin
      decrease was primarily due to a significant margin decline in the
      Insurance and Education Services segment as a result of a decline in
      internal revenue and a higher cost base in certain areas of the Life
      Insurance Services division.

RESTRUCTURING, IMPAIRMENT AND OTHER CHARGES

      During the three and nine months ended March 31, 2004, the Company
      recorded pre-tax restructuring, impairment and other charges of $10.8
      million and $25.6 million, respectively. The charges relate to the
      integration, consolidation, and reorganization of certain business
      operations, particularly in the Company's European Fund Services division
      and the Insurance and Education Services group, and the recording of
      estimated amounts for litigation expenses and contractual disputes.

                                       20

<PAGE>

      A summary of these items follows (in thousands):

<TABLE>
<CAPTION>
                                                         Three Months Ended    Nine Months Ended
                                                           March 31, 2004       March 31, 2004
                                                         ------------------    -----------------
<S>                                                      <C>                   <C>
Restructuring charges                                    $            2,164    $           9,577
Impairment charges                                                    3,350                7,865
Litigation and other charges                                          5,301                8,148
                                                         ------------------    -----------------
  Total restructuring, impairment and other charges      $           10,815    $          25,590
                                                         ==================    =================
</TABLE>

      Restructuring charges of $9.6 million during the nine months ended March
      31, 2004 were comprised of severance totaling $7.4 million and lease
      termination and other costs of $2.1 million. Severance charges resulted
      from the termination or planned termination of approximately 330 employees
      representing all levels of staffing.

      The following summarizes activity with respect to the Company's
      restructuring activities for the nine months ended March 31, 2004 (in
      thousands):

<TABLE>
<S>                                         <C>
Expense provision
   Employee severance                       $    7,434
   Facility closure                              2,143
                                            ----------
                                                 9,577
                                            ----------

Cash payments and other                          5,821
                                            ----------
Remaining accrual at March 31, 2004
Employee severance                               2,341
Facility closure                                 1,415
                                            ----------
                                            $    3,756
                                            ----------
</TABLE>

      In connection with the aforementioned restructuring plans, certain
      severance costs approximating $1.8 million and lease termination costs of
      approximately $1.2 million are expected to be recognized throughout the
      remainder of fiscal 2004 and the first half of fiscal 2005 in accordance
      with FAS No. 146, "Accounting for Costs Associated with Exit or Disposal
      Activities."

      The Company recorded pre-tax restructuring charges of $12.1 million during
      the nine months ended March 31, 2003 related to the integration,
      consolidation and relocation of certain business operations, primarily as
      a result of acquisition activity and the downsizing of certain areas in
      the investment, insurance, education, and check imaging businesses in
      fiscal 2003. The restructuring charge included a provision of $7.2 million
      for severance-related costs for approximately 300 employees and $4.9
      million for facility closure and related costs. At March 31, 2004, an
      accrual of $0.9 million remains from this prior year charge and relates to
      lease costs for facility closures.

      The Company recorded asset impairment charges of $7.9 million during the
      nine months ended March 31, 2004, consisting primarily of the following
      items:

            -     a $3.9 million charge in the Investment Services segment for
                  the 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 during the calendar year 2004 following the
                  acquisition of two of the Company's significant customers by
                  acquirers with existing fund services capabilities;

            -     a $2.2 million charge in the Information Services segment for
                  write-downs of software licenses and obsolete inventory held
                  for resale, due to lack of sufficient demand;

            -     a $1.2 million charge in the Insurance and Education Services
                  segment for impairment of a customer-related intangible asset
                  deemed to be no longer recoverable from related future cash
                  flows.

      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.

                                       21

<PAGE>

      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 $3.1 million related to breach of contract claims
      in the life insurance services business. The amount of the charge includes
      an estimated resolution amount and actual legal fees incurred during the
      nine months ended March 31, 2004. The Company intends to continue to
      vigorously defend the claims asserted and has asserted a number of
      counterclaims. Additionally, during the three months ended March 31, 2004,
      the Company recorded a charge of $5.0 million in the Life Insurance
      division related to estimated resolution amounts with certain third
      parties arising from contractual disputes over the obligations of the
      parties.

LIQUIDITY AND CAPITAL RESOURCES

      At March 31, 2004, the Company had cash and cash equivalents of $89.0
      million and negative working capital of $41.6 million. On March 31, 2004,
      the Company entered into a new senior unsecured credit facility. The $400
      million facility contains a $300 million revolving line of credit and a
      $100 million term loan. The facility expires March 31, 2008 and replaced a
      $300 million facility which was due to expire on June 30, 2004. At March
      31, 2004, the Company had outstanding borrowings of $70 million against
      its $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 2.28% on all outstanding borrowings
      under the facility at March 31, 2004. The facility is used to support the
      Company's working capital requirements, repurchase the Company's common
      stock, and fund the Company's future acquisitions.

      The Company's 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. The Company's policy is to retain earnings to support future
      business opportunities, rather than to pay dividends. The Company has
      historically used a significant portion of its cash flow from operations
      to fund acquisitions and capital expenditures with any remainder used to
      reduce outstanding borrowings under the credit facility. The Company
      believes that its cash flow from operations together with other available
      sources of funds will be adequate to meet its funding requirements. In the
      event that the Company makes significant future acquisitions, however, it
      may raise funds through additional borrowings or the issuance of
      securities.

      At March 31, 2004, the Company had $3.2 million outstanding in letters of
      credit and $300 million of outstanding 4% convertible subordinated notes
      due March 2006 and $170 million of outstanding borrowings under the credit
      facility. The Company's debt ratio (total debt/total debt plus equity) is
      0.38 at March 31, 2004, and the Company's maximum debt ratio may not
      exceed 0.50 under the terms of the revolving credit facility. At March 31,
      2004, the Company was in compliance with all financial covenants required
      by the credit facility. However, as part of the Credit Agreement with
      lenders governing the senior unsecured credit facility, the Company made
      certain representations about its prior period financial statements. In
      light of the need for adjustments to these prior period financial
      statements, the lenders consider these representations to have been
      inaccurate when made, and therefore, the lenders have asserted that there
      has been a breach under the Credit Agreement causing the Company to be in
      default. Based on the Company's expectation of the extent of such
      adjustment at that time, the Company procured a waiver from the lenders
      which allow the Company to continue to rollover certain LIBOR-based
      borrowings. However, until the waiver becomes permanent, the terms of the
      waiver do not cure the asserted default and preclude the Company from
      drawing down additional borrowings under the credit facility. The waiver
      will become permanent if the Company files its amended Form 10-K for the
      fiscal year ended June 30, 2003 prior to the due date of the Company's
      Form 10-K for the fiscal year ended June 30, 2004, which the Company
      expects to do, and the other conditions of the waiver are met. In
      addition, the lenders have informed the Company that, based on the
      information contained in this report, an additional waiver may be
      required. The lenders have asserted that they have the right to accelerate
      payment of outstanding borrowings under the credit facility until the
      waiver becomes permanent. Accordingly, all outstanding borrowings under
      the revolving line of credit and the term loan portion of the senior
      credit facility have been classified as a current obligation. The Company
      is in discussions with its lenders and believes that it will be successful
      in resolving these matters.


      Accounts receivable represented 42 and 44 days sales outstanding (DSO) at
      March 31, 2004 and June 30, 2003, respectively, based on quarterly
      revenues. The calculation of DSO for accounts receivable excludes
      insurance premiums and commissions receivable arising from the Company's
      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 the insurance carriers have customary
      payment terms of up to twelve months.

      For the nine months ended March 31, 2004, operating activities provided
      cash of $139.3 million. Investing activities used cash of $83.2 million,
      primarily for the acquisition of businesses of $56.9 million and for
      capital expenditures of $27.8 million. Financing activities used cash of
      $46.7 million, comprised of repurchases of Company stock of $58.0 million
      and net payments of short-term borrowings of $102.0 million, offset by
      proceeds from debt of $100 million, proceeds from exercises of stock
      options of $6.8 million, and issuance of common stock of $5.0 million.
      Approximately 2.8 million shares of treasury stock were issued in
      connection with the acquisition of USAIG in November 2003.

      The Board of Directors authorized a new stock buy-back program of up to
      $100 million effective November 12, 2003. Through March 31, 2004, the
      Company has purchased 0.8 million shares for $11.9 million under the stock
      buy-back program, leaving $88.1 million available for future purchases.
      Purchases have occurred and are expected to continue to occur from time to
      time in the open market to offset the possible dilutive effect of

                                       22

<PAGE>

      shares issued under employee benefit plans, for possible use in future
      acquisitions, and for general and other corporate purposes.

SEGMENT INFORMATION

      The following table sets forth revenue and operating income by business
      segment and for corporate operations for the three and nine months ended
      March 31, 2004 and 2003. Restructuring, impairment and other charges are
      excluded from the operating results of the segment as management does not
      consider such charges in its assessment of segment performance, or in
      allocating resources among segments (see Note 8).

<TABLE>
<CAPTION>
                                                                 (in thousands)
                                                Three Months Ended             Nine Months Ended
                                                     March 31,                     March 31,
                                            --------------------------    --------------------------
                                                2004           2003          2004           2003
                                                           As Restated                   As Restated
                                            -----------    -----------    -----------    -----------
<S>                                         <C>            <C>            <C>            <C>
Revenue:
   Investment Services                      $   148,295    $   125,050    $   414,677    $   367,847
   Insurance and Education Services              67,458         57,059        190,124        159,285
   Information Services                          56,579         55,965        165,346        159,095
                                            -----------    -----------    -----------    -----------
     Total revenue                          $   272,332    $   238,074    $   770,147    $   686,227
                                            ===========    ===========    ===========    ===========

Operating income (loss):
   Investment Services                      $    18,034    $    20,167    $    50,904    $    54,123
   Insurance and Education Services              15,052         18,782         39,353         51,444
   Information Services                          16,900         15,779         44,626         42,009
   Corporate                                     (5,348)        (5,101)       (16,688)       (15,757)
                                            -----------    -----------    -----------    -----------
     Total operating income                 $    44,638    $    49,627    $   118,195    $   131,819
                                            ===========    ===========    ===========    ===========
</TABLE>

      Internal revenue growth (excluding acquisitions) for Investment Services,
      Insurance and Education Services, and Information Services approximated
      19%, -11%, and 1%, respectively, during the three months ended March 31,
      2004 over the same period last year. A substantial portion of the
      Company's revenues 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. The
      Company expects to achieve an overall positive annual internal growth rate
      in fiscal 2004.

      Revenue in the Investment Services business segment increased $23.2
      million, or 18.6%, during the three months ended March 31, 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 decreased
      $2.1 million, or 10.6%, during the fiscal third quarter. Operating margins
      were 12.2% and 16.1% for the three months ended March 31, 2004 and 2003,
      respectively. The margin decreased primarily due to lower margins in the
      401(k) administration business and, to a lesser extent, increased expenses
      in the Fund Services business and investments in the infrastructure of the
      Hedge Fund Services division.

      Revenue in the Insurance and Education Services business segment increased
      $10.4 million, or 18.2%, during the three months ended March 31, 2004,
      over the same period last year. The revenue increase was primarily due to
      acquisitions offset by a decline in internal revenue of -11%. The decrease
      in internal revenue was primarily due to company declines in sales of life
      and fixed annuity insurance products and lower sales productivity.
      Operating income in the Insurance and Education Services business segment
      decreased $3.7 million, or 19.9%, during the fiscal third quarter.
      Operating margins were 22.3% and 32.9% for the three months ended March
      31, 2004 and 2003, respectively. Margins decreased in the fiscal third
      quarter primarily due to a decline in internal revenue and change in the
      mix of business.

      Revenue in the Information Services business segment increased $0.6
      million, or 1.1%, during the three months ended March 31, 2004, over the
      same period last year. The revenue increase was due to existing client
      growth, cross sales of ancillary products and services to existing
      clients, and sales to new clients. Operating income in the Information
      Services business segment increased $1.1 million, or 7.1%, during the
      fiscal third

                                       23

<PAGE>

      quarter. Operating margins were 29.9% and 28.2% for the three months ended
      March 31, 2004 and 2003, respectively.

      Corporate operations represent charges for the Company's human resources,
      legal, accounting and finance functions, and various other unallocated
      overhead charges.

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), the Company does 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 the Company believes 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 the Company's business units; renewal of
      material contracts in the Company's business units consistent with past
      experience; successful and timely integration of significant businesses
      acquired by the Company 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 the Company's
      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 the Company's processing systems; absence of consolidation among
      client financial institutions or other client groups; timely conversion of
      new customer data to the Company's platforms; attracting and retaining
      qualified key employees; no material breach of security of any of the
      Company's systems; control of costs and expenses; continued availability
      of financing, and financial resources on the terms required to support the
      Company's future business endeavors; the mix of products and services;
      compliance with the covenants and restrictions of the Company's bank
      credit facility and convertible subordinated notes indenture; the possible
      acceleration of the amounts borrowed under the Company's bank credit
      facility; and the outcome of pending and future litigation and
      governmental or regulatory proceedings.

      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.

                                       24

<PAGE>

ITEM 4. CONTROLS AND PROCEDURES

We have engaged in a continuing 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 have determined that commissions
receivable should be adjusted as described below. 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 deficiencies with respect to related documentation and review
processes for significant accounting entries, including entries relating to
acquisition accounting. We have taken, and continue to take, steps to rectify
these matters.

Based upon our review and analysis, we determined that an adjustment of $80.0
million to commissions receivable in our Life Insurance division, together with
corresponding adjustments to revenues and expenses, should be recorded. We also
determined that the adjustment requires a restatement of our financial results
for each of the fiscal years ended June 30, 2003, 2002 and 2001, as well as our
interim results for the quarters ended December 31 and September 30, 2003, to
reflect the impact of the adjustment on each of the periods presented.

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 of $21.0 million, and adjustments to
commissions payable of $2.6 million as a result of an understatement in agent
commissions payable. These adjustments will also be reflected in the restatement
of financial results described above.

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;

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

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

      -     Initiated system enhancements to further automate processes
            associated with 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
of 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, other than
the weakness described above, the Company's Chief Executive Officer and Chief
Financial Officer concluded that the Company's disclosure controls and
procedures were effective. Subsequent to March 31, 2004, the Company has
implemented the steps described above and concluded that the disclosure controls
and procedures are effective as of the date of this report.

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 at the
reasonable assurance level.

                                       25

<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
                                                                   of Publicly          Yet Be Purchased
                   (a) Total Number       (b) Average Price     Announced Plans or     Under the Plans or
   Period         of Shares Purchased       Paid per Share           Programs               Programs
-------------     -------------------    -------------------   --------------------    -------------------
<S>               <C>                    <C>                   <C>                     <C>
January 2004                        -                      -                      -    $        92,735,711
February 2004                 255,304    $             17.98                255,304    $        88,145,345
March 2004                          -                      -                      -    $        88,145,345
Total                         255,304    $             17.98                255,304    $        88,145,345
</TABLE>

        Effective November 12, 2003, the Board of Directors authorized a new
        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 3. DEFAULTS UPON SENIOR SECURITIES

        For information regarding an asserted default to the Company's senior
        unsecured credit facility, see Note 7 to the Company's financial
        statements included in Part I, Item 1 of this Report.

ITEM 5. OTHER INFORMATION

        Subsequent Events

        Following the Company's May 17, 2004 announcement regarding the
        restatement of our financial results, two putative class action
        lawsuits, Rosen v The Bisys Group, Inc., et al. and Vogel v The Bisys
        Group, Inc, et al., 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. The complaints purport to be brought on
        behalf of all shareholders who purchased the Company's securities
        between October 23, 2000 and May 17, 2004. The complaints generally
        assert 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. The complaints seek damages in an unspecified amount against
        the Company. The Company intends to defend itself vigorously against
        these claims but is unable to determine the ultimate outcome. In
        addition to these lawsuits, the Company has seen public announcements by
        others purporting to file similar lawsuits but the Company has not seen
        such other complaints.

        The Company notified the SEC of its intention to restate prior period
        financial results and that there would be a delay in the filing of its
        Form 10Q for the quarter ended March 31, 2004. Subsequently, the SEC
        advised the Company that the SEC is conducting an investigation into the
        facts and circumstances related to the restatement. The Company is
        cooperating fully with the SEC.

        The Audit Committee of the Company's Board of Directors is conducting an
        independent investigation into the events and circumstances that
        resulted in the restatement and has retained independent counsel to
        assist in such investigation. The Company is fully cooperating with the
        independent counsel in this ongoing investigation.

                                       26

<PAGE>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

    (a) EXHIBITS

        Exhibit 10.1 - Credit Agreement, dated as of March 31, 2004, by and
        among the Registrant, the Lenders party thereto, Fleet National Bank,
        JPMorgan Chase Bank, Suntrust Bank, and Wachovia Bank, National
        Association, as Documentation Agents, and The Bank of New York, as
        Administrative Agent.

        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

        No Current Reports on Form 8-K were filed with the Securities and
        Exchange Commission during the fiscal quarter ended March 31, 2004.

        A Current Report on Form 8-K, dated April 22, 2004, was furnished to the
        Securities and Exchange Commission to report on the announcement of the
        Company's financial results for the fiscal quarter ended March 31, 2004
        (Item 12).

        A Current Report on Form 8-K, dated May 18, 2004, was furnished to the
        Securities and Exchange Commission to update the Company's financial
        results for the fiscal quarter ended March 31, 2004 (Item 12).

                                       27

<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: June 16, 2004     By: /s/ James L. Fox
                            ----------------------------------------------------
                            James L. Fox
                            Executive Vice President and Chief Financial Officer
                            (Duly Authorized Officer)

                                       28

<PAGE>

                              THE BISYS GROUP, INC.
                                  EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit No.
<S>            <C>
     (10.1)    Credit Agreement, dated as of March 31, 2004, by and among
               the Registrant, the Lenders party thereto, Fleet National
               Bank, JPMorgan Chase Bank, Suntrust Bank, and Wachovia Bank,
               National Association, as Documentation Agents, and The Bank
               of New York, as Administrative Agent

     (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
</TABLE>

                                       29