Check-Image Exchange Gains Momentum

Wells Fargo and Co.'s decision to join the Viewpointe check-imaging service is the latest step in an industry effort to overhaul the way the nation's banks process checks, bank executives say.

Viewpointe Archive Services LLC, a bank-owned venture that stores and exchanges images of many of the 40 billion checks written annually in the United States, has conducted image-sharing tests among some of its owner banks, such as Bank of America, J.P. Morgan Chase, and SunTrust Banks.

Wells Fargo plans to move its internal check image archive over to the Viewpointe platform by the middle of 2006, says Mitch Christensen, executive VP of payment strategies at Wells Fargo Services Co. Wells Fargo recently acquired a stake in Viewpointe.

Other banks, such as Wachovia Corp., have conducted tests outside of Viewpointe. Wachovia, for example, launched a pilot project last month with Small Value Payments Co., another bank-owned venture. The pilot "has proven that the technology works," says Jim Stoudenmier, senior VP of item processing at Wachovia Operations Services. The task now is to provide "critical mass" for extending the imaging infrastructure to other banks, he says.

Last month, SunTrust Banks began exchanging check images through Viewpointe with First Horizon National Corp. "It's definitely not a pilot. It's a production system," albeit one with small volumes, says Lenora Thompson, group VP of banking services at SunTrust. The project has gone well so far, although work remains to be done in merging the dual workflow streams of images and paper.

The notion of banks exchanging images of checks instead of paper began to circulate in the late 1990's and gained momentum with passage of the Check Clearing for the 21st Century Act, which gave images or facsimiles of checks the same legal status as originals.

Image exchange will build slowly over the next two years, and reach critical mass in 2007, says Richard Winston, a partner at Accenture, which has performed consulting engagements for Viewpointe.

Over the next two years, other banks will follow suit, merging their archives with other banks either bilaterally or via third parties like Viewpointe, Small Value Payments, or the Federal Reserve. While the number of archives will shrink, those that remain will expand in size, Christensen says, adding that electronic gateways will be built to connect "the large archives of the future."