Bank of Boston Corp. has embarked on an upgrade of its check imaging system that should lead to a bankwide imaging and document archive system.

The $54.1 billion-asset bank is adding three components to its current check imaging system:

An archive of digitized checks for retail and corporate customers.

A system that lets the bank offer image statements to retail customers.

A system for image-based exception processing.

The components were designed with International Business Machines Corp. They enhance a three-year old imaging system that features applications for proof of deposit and for providing CD-ROM image-based statements to corporate clients.

IBM's package of imaging products was exhibited this week at the Bank Administration Institute's imaging conference in Orlando.

Many banks - including Bank of Boston - have experimented with imaging technology, trying to improve response time on customer inquiries while reducing costs for paper storage and postage for statement mailings.

"We see it as a way to provide better information to our customers," said Marianne Crowe, director of technology solutions at Bank of Boston.

But it has largely been midsize banks - those with assets around $1 billion - that have installed imaging technology on a broad scale, technology experts said.

And few banks have installed archiving systems that let the check images be used to their fullest extent.

"The experience for most banks with imaging has been rifle shot," said Geoffrey Emerson, general manager of IBM's global payment solutions unit.

"They use it for statements, or (proof of deposit), or CD creation. Bank of Boston is unique because they are trying to put it all together."

IBM also collaborated on an imaging project with Chemical Banking Corp. prior to its merger earlier this year with Chase Manhattan Corp.

That project is ongoing at the new Chase Manhattan Corp., said Mr. Emerson said. Its parameters are similar to those of the Bank of Boston project.

Larger banks are moving into check imaging more cautiously than some midsize and small banks, mainly because the stakes of converting to a new system are very high for banks with heavy check processing traffic.

"It's tougher for the big banks to get their arms around the system," said Ronald Thompson, senior vice president at ImageSoft, a software company that specializes in imaging technology for banks. "A lot of folks are afraid they will establish a technology island that ends up being a throwaway solution."

Bank of Boston executives say the most important advancement will be the completion of the document archive, slated for the end of next year.

IBM's Selective Archive software, designed for storage of imaged checks, will eventually be used to handle research requests for retail and corporate customers.

"Our strategy is to have a full enterprise archive system by the end of next year," Ms. Crowe said. "These products fit in nicely with that long- term goal."

Bank of Boston processes 2.4 million checks daily, Ms. Crowe said.

After the systems conversion from the bank's merger with BayBanks Inc. is completed next spring, daily volumes are expected to jump to 3.1 million. About 50% of those items are eligible for imaging, said Ms. Crowe.

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