Charlotte firm cashes in on check-imaging service for banks

Posted 7:50AM on Wednesday 3rd April 2002 ( 23 years ago )

CHARLOTTE, N.C. - Officials at Viewpointe Archive Services would like to alter a monthly ritual for the millions of Americans who pay their bills and buy groceries by writing a check. If they succeed, bank customers will be able to review their canceled checks without having to plod through a thick pile of financial records. Or if they need to inspect a specific check, they can get a virtual copy off the Internet and print it. Sensing a lucrative niche, the small Charlotte company offers a digital archive of check images, which allows customers to see exact copies of their checks while streamlining the banking industry's cumbersome task of processing the financial documents. "Nothing really new has happened with checks in the last 40 to 50 years," said chief executive officer John Lettko. "Everybody has the idea that banks hate checks because of all the work, but consumers still love the idea of personalized checks." Viewpointe, in business only a year, copies and stores one of every five personal checks written in the United States in its computers. The images can be accessed over a secure Internet connection. Its archives now contain more than 11 billion images and the total is mushrooming. Viewpointe was founded in 2000 by IBM, J.P. Morgan Chase & Co. and Bank of America Corp., which also is its largest client with more than 10 billion checks processed. Lettko expects the company to process half the nation's checks, or roughly 35 billion a year, by the end of 2003. That's a remarkable goal for a company with fewer than 50 employees. "We're pitching our company to the nation's top 50 banks," said Lettko. "Bank of America will always be the largest client we'll ever have because they handle three times the number of checks as their closest competitors." With Bank of America processing more than 60 million checks a day, Viewpointe took in about $20 million in revenues in its first year of operation. Viewpointe provides digital cameras to the banks to photograph a check as an image that is then stored in a computer. It makes its money by charging banks a fraction of a cent for each check. The process is meant to improve efficiency and lower the cost for banks to service checking accounts, while giving customers the peace of mind that comes from knowing they can review their financial records at any time. "The biggest asset is fraud prevention," Lettko said. He described a Bank of America customer in Atlanta who suspected that someone was writing checks on his account. After the customer realized a bundle of his checks was missing, he went into his bank branch to discuss his suspicion. Using Viewpoint's archive-imaging system, the teller was able to bring up copies of the most recent checks. "The teller noticed a few checks had different handwriting," Lettko said. "The bank put a stop on the account and gave the customer a new account with new checks before the old checks had cleared." Without the digital imaging archive, Lettko said, it might have taken several days to research the account. By then, some of the bogus checks might have been cleared. "Customers become very anxious when they think someone else might be writing checks on their account," Lettko said. Customer demand was the driving force behind Bank of America's search for a reliable and secure imaging system, Lettko said. Besides imaging checks for Bank of America and Chase, Viewpointe also provides imaging for First Tennessee National Corp. and Hong Kong Shanghai Banking Corp. Last month, Atlanta's SunTrust Banks, Inc., became a part owner of the company and signed a long-term agreement to use its archiving technology. Terms of the deal were not disclosed. "This technology will provide us an opportunity to further increase the efficiency of our processing and retrieval operations, while providing a valuable, convenient service to our customers," SunTrust vice chairman Ted Hoepner said. Some large banks, including Charlotte's Wachovia Corp., have their own in-house check-imaging system. And many smaller community banks have been using similar archiving technology for some time. "When you only handle a few thousand checks, it's easier to get your arms around it," said Steve Ledford, president of the Atlanta-based bank technology firm Global Concepts. With a more diverse customer base and millions of checks to process, the larger banks such as Wachovia and Bank of America held out for a while. "Now they are finding that imaging technology is an essential service their customers want," Ledford said. In an industry that's not known for embracing new technology, bankers needed to be convinced that the archiving system was trustworthy and reliable, he said. "It's not just a question of their customers' privacy," he said. "These banks also don't want their competitors to be able to see their data showing up in other places." ------ On the Net: Viewpointe Archive Services: http://www.viewpointearchive.com

http://accesswdun.com/article/2002/4/196577