The news this summer mixed for IBM Corp.

On the one hand, it's more profitable than it has been in years. On the other, it's becoming clearer every day that Big Blue has lost the operating system war to Microsoft Corp.

Given that, IBM must have welcomed Chemical Banking Corp.'s decision to convert its check operations to an image-technology system from IBM.

Chemical is one year into a five-year effort in which the fourth biggest banking company in the country will have spent $100 million to convert seven check sites, including two in New York, one in Delaware and four associated with its Texas Commerce Bank subsidiary. About half of that total will go to IBM, and the remainder to an internal re-engineering effort associated with the new technology and software programs from other companies.

[Expanded Picture]Texas Commerce's Dallas center, which processes about 1 million of the 9 million checks Chemical handles each day, is serving as a laboratory and will be the first to be converted, according to Thomas Vicknair, a senior vice president who is supervising the conversion.

Chemical had also looked closely at imaging systems from Unisys Corp. and other vendors. The bank chose the IBM system because the computer systems that are connected to the check operations also run on IBM equipment, and IBM's imaging equipment runs about 50% faster than does Unisys', says Denis O'Leary, Chemical's chief information officer.

Chemical will have to spend about $1 million apiece to upgrade most of its 40 reader/sorters, but by the time the project is completed, it will be able to sell about 10 of them into the secondary market, perhaps for as much as $500,000 apiece.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.