The five banks that own Viewpointe Archive Services LLC have almost attained a goal they set for themselves 19 months ago: to clear electronically all their common checks within the massive, shared image repository.
Lou Buglioli, the Charlotte archive company's chief executive, said the original goal, announced in September 2005, was for the owners to be sharing 100% of their common items by the first quarter of 2007, clearing an estimated 2.2 billion to 2.4 billion images annually.
In March, the five banks cleared 173 million items, an annual run-rate of 2.1 billion images. Mr. Buglioli said that part of the shortfall is simply that people are writing fewer checks, though another important factor is that some of the banks have yet to shift their entire check volume to images.
However, these factors have also been offset by merger activity. For example, U.S. Bancorp bought Vail Banks Inc. in Avon, Colo., last May and brought over its check image volume to Viewpointe.
Besides U.S. Bancorp, Viewpointe's owners are Bank of America Corp., SunTrust Banks Inc., JPMorgan Chase & Co., and Wells Fargo & Co.
"We are very close to achieving the 100% with our owners," Mr. Buglioli said. "It is not even a challenge for us right now." The next goal is moving the archive's six nonowner bank customers into full clearing operations by yearend, he said.
John G. Feldman Jr., a senior vice president at B of A and the Charlotte banking company's image transaction and payments executive, said, "We are clearing some industrial-strength volumes through" Viewpointe. He could not give an exact figure for the number of images B of A is clearing through Viewpointe. "I wouldn't say we're at 100%. I would say we're getting close."
B of A is now clearing one-third of its total check volume as images, through Viewpointe and other image networks, due in part to what Mr. Feldman called "a significant hockey stick in volume in the last six months."
B of A is the nation's largest check-clearing bank and was the first one to connect with the four largest image-clearing systems the Federal Reserve banks; SVPCO Image Payments Network, which is run by Clearing House Payments Co. LLC in New York; the Endpoint Exchange Network operated by Metavante Corp. (which is being spun off by the Milwaukee banking company Marshall & Ilsley Corp.); and Viewpointe.
By contrast, SunTrust, which was one of the first pairs of banks to clear checks through Viewpointe's archive (with First Horizon National Corp. in Memphis) and the first to use it to transmit images to the Fed, has chosen Viewpointe as its exclusive portal for image clearing.
"Our volume ramp-up has actually exceeded our original projections," said Vicki Bitzis, a senior vice president at SunTrust and the director of operations in its enterprise information services unit. "We're ready to do more."
SunTrust reached full clearing with the four other Viewpointe owners in late 2006 and is now clearing with most of the six nonowner bank customers BB&T Corp., First Horizon, the Harris Bank unit of Bank of Montreal, HSBC Bank USA, National City Corp., and Zions Bancorp.
SunTrust currently clears about 20% of its check volume electronically, through Viewpointe. But this proportion is to rise sharply this year.
"All but one routing number will be open by the end of this month, including controlled disbursement," Ms. Bitzis said. The exception, which she described as a "low-volume, special situation" section of the bank, is to be open by yearend, she said. As a result, SunTrust expects to clear 70% of its checks through Viewpointe by yearend.
Alenka Grealish, the manager of the banking group at the Boston research and consulting firm Celent LLC, said that banks must invest in check imaging even if it is painful financially.
"Infrastructure costs money. It's hard to invest in this declining-volume business," she said. But the big banks that own Viewpointe are smart to drive up their use of the archive. "As owners of a huge fixed-cost infrastructure, you're going to be feeling that pressure," she said. "You want to get that capacity up."
Though the archive remains a bit short of its goal, Ms. Grealish applauded the effort. "If you set aggressive goals, you know you've done as much as you can," she said.
Other companies are also hooking up to Viewpointe. Fiserv Inc. in Brookfield, Wis., announced last month that it had begun using Viewpointe's Pointe2Pointe connection to start clearing checks between B of A and the more than 600 small banks that use the "on-we" Fiserv Clearing Network.
Ms. Grealish said that, as the interconnections among clearing systems proliferate, banks will be compelled to get on board with imaging. "The momentum is there. The battleship is turning," she said. "They definitely need to go in one direction or another. Eventually the costs in their back offices are going to push them off the fence."
Mr. Buglioli said B of A is to begin converting in May to Viewpointe 2, a database architecture that the archive has been developing in conjunction with International Business Machines Corp.
This upgrade, to be completed in the first half, is to enable faster access to images (up to 3,500 transactions per second), real-time disaster recovery, and access by multiple indexes to a single check image.
(Though today's clearing system is called "image share," it actually involves putting duplicate images in the different banks' sections of the archive.)
Viewpointe's image-share model also means that fewer than 5% of the images cleared through its system need to be printed out as image-replacement documents; by contrast, many images sent through the other networks must be converted back to paper for presentment to banks that are not ready to accept image files.
Mr. Buglioli said Viewpointe also expects this year to test a way to permit universal access to its images by financial institutions.
