Provident Bank Mines Check Images for Gold

Imaging is helping Provident Bank boost revenues and reduce fraud.

For Provident Bank, imaging technology is about more than just cutting down on administrative costs. The $5 billion institution has embarked on a series of projects using imaging to not only improve storage and access to documents, but to uncover new streams of revenue and prevent fraud.

"We've always known image technology was going to provide a more robust way to complete our tasks, whether that's providing customer service or the way we communicate with our customers," said Jay Fitzhugh, senior vice president for strategic directions at Baltimore-based Provident Bank.

Among the imaging projects underway are distributed research, fraud protection, Check 21 and providing online access to cleared checks.

The latest initiative involves reading payer information, such as name, address, Zip code and phone number, off transit checks in order to gain insight into customer activity, as well as provide lists of prospective retail and commercial customers. The goals are to provide a new source of marketing and sales leads, to identify cross-sell opportunities, and to provide loss prevention assistance.

The bank has installed MindReader, a check recognition software product from Orbograph, Billerica, Mass., for this purpose. The system applies image processing, OCR, ICR and textual processing algorithms to interpret various text fields. The information is then inserted into a relational database table. The system also includes a set of software tools for organizing the data.

MindReader enables Provident Bank to analyze the complexity of the transactions it processes, said Fitzhugh, "as opposed to just processing them and having them disappear out the door as in more traditional item processing."

He added, "The product allows us to gain a better understanding of our customers' transactions set. We can now do better selection and better analysis. And it certainly allows us to do the analysis on a scale that we couldn't do manually."

By pairing MindReader with its 180-day online image archive, the bank is able to analyze transactions as far back as six months. "We can target what transactions we want to look at and then we can specifically bring those through the product," said Fitzhugh.

Both the image archive and MindReader are hosted by Aurum Technology, which provides Provident with image-based item processing and related back-office support services. Aurum provides an export file based on pre-selected queries.

Although MindReader has embedded analytical capabilities, the bank has chosen to use its existing analytical systems.

"We're using it in a very rudimentary way, and have not utilized the database and architectural components within the Orbograph product itself," said Fitzhugh. "We already have a pre-established marketing program and direct mailing program, and what we're doing is bringing this data in as another element."

An added benefit of Mindreader was the speed with which it was installed. "Aurum Technology and Orbograph brought it up in literally a week's time," said Fitzhugh.

In addition to helping the bank identify cross-sell and direct marketing opportunities, the system will aid in quality and fraud protection issues, such as verifying that the dollar amounts on checks match the encoded amounts and comparing check payee names with the name on the deposit account.

Today, the bank requests only about one query per week through Aurum. However, that's expected to increase in the months ahead to include a series of queries per week for marketing purposes, as well as a daily process for fraud detection.

The success of the project hinges on good planning and execution, noted Fitzhugh. "What you have to do is be very good with the strategies. What are the golden nuggets of information that will allow you to improve your profitability or reduce your risk as a result of your analysis?"

The bank is working with Orbograph to develop an upgraded version of the product with expanded features that's expected to be available later this year.

The bank had little difficulty justifying the expense for MindReader. "It's a trust me approach," said Fitzhugh. "The results in the end will ultimately validate whether we were able to improve our cross-sell ratios, identify opportunities within our market area to attract new business, or correct a large error or identify a customer from whom we shouldn't be accepting checks.

"You have to believe in that potential and be willing to take some risk. To date, we know that the installation has gone well and now we're waiting for the results to prove out that investment."

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FAST FACTS

INSTITUTION: Provident Bank

ASSETS: $5 billion

BUSINESS CHALLENGE: Develop new sources of sales and marketing leads, identify cross-sell opportunities, and reduce fraud.

SOLUTION: MindReader from Orbograph, Billerica, Mass.

KEY QUOTE: "We've always known image technology was going to provide a more robust way to complete our tasks, whether that's providing customer service or the way we communicate with our customers."