Check Processing Goes Digital

Chase Manhattan Bank to store checks electronically, saving time and money

By Martin J. Garvey

hase Manhattan Bank expects by next summer to automate the processing of millions of checks a day, as a result of one of the biggest projects in a banking technology trend that's expected to save the industry more than $2 billion a year.

In place of today's largely manual process, Chase will scan checks into a document-management system, then retrieve and process them as electronic images. "A typical check is touched by people 12 times," says Thomas Peppard, project leader for Chase's Enterprise Check Reengineering effort. "The goal is to touch it once."

Ultimately, Chase and other banks want to take the process a step further-using check imaging and automation to eliminate the transfer of paper checks between banks for clearing and other purposes. Analysts say that would save the industry $2 billion to $3 billion. "If you can elim- inate the paper, electronic pulses will replace stacks of paper being transported by truck," says Rockwell Clancy, executive VP with the Bank Administration Institute of Chicago, a banking-industry research firm.

The four- to five-day transfer process could be cut to a day, he says, if the industry as a whole implements imaging, which it's doing "in fits and starts." Chase is a member of the Image Archive Forum, a group of banks and vendors dedicated to promoting imaging; the group includes Wachovia Bank, NationsBank, and Bank of America.

Check imaging is not new, but observers say the size and extensiveness of Chase's effort mean it's a key project in the industry. "A lot of people are watching what's happening at Chase," says Scott Willis, applications manager at IAF member Storage Technology Corp. in Louisville, Colo. Chase already processes 200,000 checks a day using an IBM RS/6000 SP and document-management software from IBM Payment Systems in Charlotte, N.C. By next August, Chase plans to automate the handling of 12 million checks per day.

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