CHICAGO -- Officials at Barclays Bank PLC said this week that their "white-knuckle ride" toward a check image-processing system from International Business Machines Corp. is nearing its final destination.
London-based Barclays, one of the world's largest banks, with over $250 billion of assets, has become the first financial institution to take IBM's imaging systems for processing deposited checks out of testing and into day-to-day operation.
In check imaging for "proof of deposit" functions, paper checks are scanned and turned into digitized pictures that can be more efficiently processed and stored.
Waiting for IBM Solution
Several U.S. institutions, including Huntington Bancshares, Columbus, Ohio, Comerica Corp., Detroit, and Signet Banking Corp., Richmond, Va., have been running large amounts of deposit work through a check imaging system from Unisys Corp., Blue Bell, Pa., but experts said the Barclays announcement is nonetheless significant.
"There have been a lot of banks waiting for an IBM [proof-of-deposit] solution to come along before making a decision on image," said Thomas E. Rea, senior vice president at Littlewood, Shain & Co., a payment systems consulting firm based in Exton, Pa. "This should break up the logjam of decisions on image at the executive level."
Experts also said the Barclays announcement is an indication that the IBM check imaging project, once plagued by numerous development delays, is now out of the woods.
Once of the reasons for this optimism is the speed with which Barclays plans to put the IBM system to use for processing the millions of checks that pass through the bank every day.
Barclays, Britain's largest clearing bank, is currently running only about 25,000 checks per day through the system. But the plan is to hit 1.2 million items per day by the end of next year.
The Barclays system runs on its IBM mainframe and will eventually accommodate up to 5 million checks per day. The IBM hardware at the bank includes 24 high-speed check reader/sorters that handle between $45 billion and $60 billion worth of checks each day.
"The last three years, to be frank, have been easy," said David J. Cartwright, director of clearing and bullion services at Barclays. "I bet my career and that of my executive director on this working. Thankfully, it did."
Mr. Cartwright said Barclays was not pushing to be the first to run live work on the IBM system. Indeed, he indicated that the bank would have preferred, circumstances permitting, to have ceded the role of pioneer to one of the other institutions that are currently testing the IBM system. "First means you get to discover the bugs," he said.
However, the bank's aggressive consolidation plan, which will move most of the check work to two centralized sites, gave the image proof of deposit project a sense of urgency.
While Mr. Cartwright admits the speed with which the bank is implementing the technology is aggressive, he does not foresee a problem in training his employees how to use the system in time for the heavy volumes.
The American financial institutions testing the IBM system stand to benefit from Barclays' experience, according to IBM officials.
Several of these banks, including Mellon Bank Corp., are expected to begin running live work before the end of the year.
"Projects like this simply cannot get done without the commitment of banks like Barclays and Mellon," said Louise D. Nielsen, business executive in IBM's document and check image unit, which is run from Charlotte, N.C.