BayBanks Inc. has signed a multimillion-dollar contract with Unisys Corp. to install an imaging system for its check processing operations.
Baybanks will convert its check processing operations from International Business Machines Corp. equipment to Unisys in order to move more quickly to image capture technology for processing deposited checks.
By eliminating most manual handling of checks, image capture technology is expected to reduce costs by 35% to 40% at banks that process large volumes of checks.
Baybanks is the second major bank to move to the Unisys imaging system after using IBM check processing technology. Republic National Bank said last month that it would turn over its check processing operations to Systematics Financial Services Inc., which is converting its New Jersey processing center from IBM equipment to the Unisys system.
IBM's check image processing project is months behind the Unisys program. While IBM is now in the final phases of testing its image capture system for deposited checks at several banks, several Unisys customers, including Huntington Bancshares, Comerica Inc., and Signet Banking Corp., have had image systems in production since the middle of last year.
"Certainly we considered IBM and NCR," said Robert Hunt, managing director of BayBank Systems Inc., the processing arm of the Boston-based bank. "The key factor in our choosing Unisys was to have someone would worked out the bugs" in the technology.
"We felt more confident the conversion would go smoothly with Unisys," Mr. Hunt added.
High-Profile Test Case
"Everyone will be anxiously looking at this conversion [from IBM to Unisys] as a laboratory to see how easily it can be ackomplished," said Stanley E. Mitko, a banking consultant at Littlewood, Shain & Co. in Exton, Pa.
Baybanks, which proces average volume of 1.5 million checks a day plans to install the Unisys Infolmage item processing system. The system eliminates most manual handling by automatically reading the amount on a check.
Baybanks also is the first bank to plan to incorporate the handling of automated teller machine deposits into an image capture system. The bank will work with Unisys to develop software that captures the amount keyed in by a customer at an ATM, and compares it with the amount captured on the envelope deposited at the ATM.
Extensive Retail Franchise
That capability will allow Baybanks to streamline its ATM deposit-posting function, which already is centralized in a single location. Many other banks perform this function in the branches.
BayBanks, with assets of $9.8 billion, has an extensive retail network of over 200 branches and 1,200 ATMS. BayBanks operates its own ATM network, called X-press 24.
The bank employs dozens of proof operators in a central location who ha.ndle ATM deposits, matching check amounts with the amount keyed into'the ATM and then sending the checks to reader/sorters.
When the ATM software is developed, Unisys will be able to market the system to other banks, officials said.
BayBanks has already had some success with image capture technology. Last year, the bank installed software to produce statements with images of checks rather than the checks themselves. BayBanks, which does not charge a fee either for image statements or for returning checks, now issues some image statements to about 100,000 customers monthly.
While Mr. Hunt declined to specify cost savings, he said the percentage of statements containing effors had been reduced 1.2% to 0.2%.