Risk-taking is not a term one normally associates with Wachovia Corp. So why is it now investing heavily in NCR's fledgling image system, which is not yet on the market?

The decision is pragmatic.

"We've been studying image for some time," said Bob Hill, a vice president and manager of item processing at Wachovia. "We chose NCR because we saw a good return on our investment."

In October 1991, Wachovia turned its Atlanta office into a testing ground for an NCR check proofing system. The proof-of-deposit component of the Scalable Image Item Processing System will be live at Wachovia by 1994.

Work Flow Simplified

Currently, the check proofing system at Wachovia is manual. Operators handle every check and key their dollar amount on a proof machine keyboard. The machine then encodes the amount in magnetic ink and balances checks with deposit slips. Next, operators put the checks on reader-sorters, where they are sorted by destination and information is recorded for other check processing systems.

When the NCR system is installed, checks will be placed on a transport and their images scanned. The system will automatically read the dollar amount, encode the magnetic ink, balance items, sort the checks, and pass information to other systems.

The system, known as SIIPS, will be able to handle the 35 million checks a month received from the bank's branches, which are in Georgia, North Carolina, and South Carolina.

Wachovia has tested the system's transport and its ability to read the courtesy, or handwritten, amount.

Staff Reduction Coming

The system is now able to recognize 50% of the handwritten amounts on checks and deposit items. The bank, therefore, estimates it will eliminate about 200 jobs in this area when the technology goes on line.

"We expect a payback from this system in less than five years," said Paul N. Boone, senior vice president, group executive, and manager of Wachovia's Georgia banking operations.

Although the bank declined to say how much it paid for the system, Kathleen Dyer, the director of imaging systems at the financial systems division of NCR, said a system capable of processing 300,000 to 350,000 checks per day is priced between $1.7 million and $2.2 million.

Since imaging is a new technology, it has had its share of problems. The SIIPS system has not been immune. At first, it could not recognize the internal cash tickets, which represent cash transactions. When Wachovia redesigned the ticket with a more prominent dollar sign, the recognition rate reached 60% to 70%.

Another area of difficulty was in the transport of the checks. When the checks and deposit slips came in from the branches, many of them were upside down, had dog ears, or had paper clips attached. Operators had to prepare them manually for the transport and this caused bottlenecks.

Educating the Tellers

One part of this problem was solved through simple communication.

"Tellers thought they were helping us by fastening paper clips on deposits, but we explained the problem, and they stopped doing it," said Mr. Hill.

Not all problems with imaging systems can be easily solved, however.

"Image is in its infancy and is likely to change," said Mr. Boone. "There are few standards for image, so we may have future difficulty connecting systems from different vendors."

"We won't look ourselves into one particular technology," said Mr. Boone. "We haven't committed ourselves to a single vendor."

Change in Job Skills

Regardless of which systems or vendors Wachovia goes with, imaging will have a tremendous impact on its work force.

"In the current [manual] environment, we need people who are familiar with proof documents and who understand balancing," said Mr. Hill. "With imaging, we need people who are computer-literate."

The bank will gear up for the changes by placing current employees into training programs. To eliminate the need for layoffs, the bank has replaced proof operators with temporary personnel since July.

When shopping for an imaging system, Wachovia also studied proposals from both IBM and Unisys. The bank's final decision to go with NCR was based on price; the system's transport, in which paper jams are easily corrected; and its support of computer industry standards.

While Wachovia is pleased with NCR and image technology, the bank does have an imaging wish list, which includes a recognition rate better than 50% and a transport faster than the present 500 documents per minute.

"We are always working on our transport speed and on recognition technology," said Michael L. Denny, assistant vice president of strategic major accounts at NCR.

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