Check image exchange just got a boost from further automation in the clearing and settlement process, as volume continues to surge.
Viewpointe Archive Services LLC and the National Clearing House Association announced this week that they have begun providing an integrated "settlement exchange for check image exchange," including returns and adjustments, for the 11 large banks that store images in Viewpointe's shared archive and the four banks that use its Pointe2Pointe service for image exchange. Related Link
Still, providing such services to Viewpointe banks is a major step.
The five large banking companies that own Viewpointe clear almost all their common checks, 2.1 billion items a year (not counting those that still clear as paper), within the massive shared repository.
"As of Friday, this was a manual process within all our banks," Diane Scott, the chief sales, marketing, and product officer at Viewpointe, said in an interview Tuesday.
The automated system went live Monday. Glenn Wheeler, the NCHA's president and chief executive, said the Dallas settlement agent worked for six months with the Viewpointe Users Group on technical issues, "so all the trading partners could come on at the same time."
The NCHA system allows real-time, multilateral netting, which means that banks clearing checks with multiple trading partners can see their net credit or debit position and can settle those payments according to agreed schedules.
"They exchange files at various times during the day," Ms. Scott said.
But banks continue to clear checks largely in batches, and Mr. Wheeler said "the jury is still out" on the business issues involved in settling accounts numerous times a day.
But in a reflection of the growing complexity of the image-exchange ecosystem, at least one large Viewpointe trading partner, Fiserv Inc., plans only select use of the NCHA settlement system.
Fiserv clears checks for more than 600 clients through its Fiserv Clearing Network, and relies primarily on corespondents or bankers' banks for settlement services. Stephen J. Ward, the division president of market development and product delivery in Fiserv's item processing group, said the Brookfield, Wis., company is clearing check images only with Bank of America Corp.
"We did that the old-fashioned way — by hammering out an agreement," he said. "We're not exchanging yet with all the Viewpointe banks, and this will make it easier."
Mr. Wheeler said the NCHA is working with Fiserv in other areas. "We're providing settlement for Fiserv, between the settlement banks," but not within Viewpointe.
NCHA also reported this week that its image-exchange settlement set a one-month record in May, topping 200 million items.
The 206.6 million items were 625% more than the May 2006 tally, and the value was $194 billion, against $13 billion in May 2006.
Mr. Wheeler said 90% of those images settled without the creation of image replacement documents, and image now accounts for 39% of the NCHA's settlement volume.
In addition to Viewpointe, the association provides settlement services for more than 4,000 institutions using the Endpoint Exchange Network that is operated by Metavante Corp., and for 20 local and regional check exchanges.
