First Chicago Corp. plans to announce today that it will offer abbreviated checking account statements with digitized images of canceled checks.
Many bankers believe these new statements can offer a competitive advantage, reduce mailing costs, and generate fee income. First Chicago estimates it will save $1.47 million over five years in mailing costs. The bank said it is too early to estimate the potential fee income.
First Chicago, with assets of $47.3 billion, will become the largest U.S. bank to offer image statements. Fleet Financial Group, BayBanks Inc., and First Tennessee National Corp. began offering such statements this spring. First Interstate Bank Seattle started offering the product in 1984 and, for many years, was the only bank offering it.
Switched Suppliers
Until last fall, First Chicago was working closely with International Business Machines Corp. to develop the image technology, but the bank switched suppliers because the project was delayed. Officials of the banking company said they wanted to be the first in Chicago with image statements.
Fleet took over as IBM's development partner after First Chicago dropped out and has begun to issue image statements.
The Chicago-based bank plans to begin in September charging customers $2 a month, a relatively high fee, if they maintain balances of less than $2,000. Most of the other banks offering the service charge about $1.50 a month.
Free to Some Customers
The statements will be free to customers who maintain a balance of more than $2,000 and to customers 55 or older, under First Chicago's Renaissance Banking program.
Customers will be able to request the service beginning today and can receive the statements in the next statement cycle. The bank will not begin charging for the statements until September.
First Chicago is offering three options to its customers, who can continue to get their canceled checks every month, receive the image statement, or get a simple bank statement that lists the previous month's checking account activity but does not include canceled checks.
Cincinnati Bell, BancTec
The system First Chicago is using was supplied by Cincinnati Bell Information Systems Inc., Maitland, Fla., and BancTec Inc., Dallas.
A camera on BancTec's ImageFirst check-sorting machine photographs the front of each check. The image is reduced and stored on a mainframe computer, and at the end of the month, the Cincinnati Bell software matches images to the customer's statement and prints copies of up to 18 checks on a single sheet of paper.
The bank will continue to keep microfilm copies of checks for seven years, and make them available to customers, bank officials said. It will recycle the canceled checks.
