Looking to jumpstart the industry's adoption of check imaging, Chase Manhattan Bank and Bank of America have uncorked a venture for capturingand storing vast numbers of digitized checks.
Called Viewpointe Archive Services, the venture aims to speed the exchange of check images among banks, reduce check processing costs industrywide and allow consumers to retrieve digitized check images from the Web.
Viewpointe is the first commercially available platform to support check image exchange. "This is the first national digital check archive," said William Hoefling, executive vice president of Chase Manhattan, which is merging with J.P. Morgan.
The service utilizes hardware and software from IBM plus "intellectual capital" from Chase, which worked with IBM to launch its own image archive three years ago. That archive processes an average of 12 million checks daily, and stores 21 billion check images stretching back seven years. The Chase archive plus that of Bank of America are being folded into Viewpointe.
Participating banks will capture digital images of checks and check-related items as they are processed and cleared, and transmit the images to either of two IBM data centers-one in Dallas and the other in Boulder, Colo.-via an IBM-provided telecom hookup. Technology from IBM and its Check Solutions subsidiary will enable the storage and retrieval of extremely high volumes of images. "All the banks have to worry about is collecting the digitized images and shipping them to us in a standard format," said Bob Zapfel, general manager of financial services for IBM Global Services.
Viewpointe caps a series of moves toward the creation of a national check image interchange. The Federal Reserve Bank of Minneapolis has been offering check imaging and electronic check presentment (ECP) services to banks in Montana for the past 18 months. Industry standards for check images and image cash letters have been created. And earlier this year, SVPCo-a New York-based ECP venture-took over the PACES check imaging project from the Financial Services Technology Consortium.
With Chase and BofA behind it, Viewpointe has the critical mass needed to pull in the rest of the industry, executives said. "We plan to have significant numbers of the Top 50 U.S. banks signed as Viewpointe customers over the next two to three years," Hoefling said.
Although banks have benefited individually from building their own image archives, they've missed out on the opportunity to build a shared check image interchange. "Without the ability to exchange check images with other banks, we've only been able to reap half the benefits of check imaging," said Hoefling.
"Joining this entity via the archive and being able to exchange images is a benefit they didn't have," said Jim Dixon, head of Internet banking at Charlotte, N.C.-based Bank of America, which handles 40 million checks daily and is conducting a check imaging pilot in Atlanta. "There are not that many banks that are near to the maturity of this platform," he added.
Viewpointe is another step toward the industry's goal of truncating, or destroying, paper checks at the bank of first deposit. However, for legal and business reasons, banks still have to put up with paper. "Different banks are going to have different truncation strategies for different segments of their customers," said Hoefling.
By eliminating the need for financial institutions to touch a check 12 times during processing-six times by the bank of deposit and six times by the bank of origin-the venture could shave as much as 30% off a bank's processing costs.
Viewpointe will save banks the hassle of maintaining their own image archives out of multiple hardware and software products. Application service providers (ASPs) offer the same benefit, but are still one-off solutions, IBM's Zapfel said. "While ASPs could help individual banks with check image archiving, such offerings cannot provide industry-transforming opportunities. Viewpointe provides its services across multiple enterprises all at once."
Check imaging yields geometric improvements in customer service response times. In the microfilm environment, the average turnaround time for retrieving a check copy is 24 hours. With Internet-based image archiving, retrieval times could be as low as 90 seconds. "With Viewpointe, retrieving images will be easy and convenient for customers," said Dixon. "They can click and print any check in a matter of seconds."