Savings Bank of Manchester in Connecticut has joined the small but growing numbers of community banks that have hired a processing company to produce image-based checking account statements.

In the past few months, large financial institutions, including Fleet Financial Group, BayBanks Inc., and First Tennessee Bank, have begun offering the new statements, which are account summaries that consist of digitized images of canceled checks.

Although consumer response to the statements has been positive and the potential revenue and productivity gains are attractive to most financial institutions, the high cost of image processing equipment has generally kept community banks from par-taking of the new technology.

A Growing Service

But recently, as a number of vendors have begun adding image technology to their check processing services, institutions with smaller capital pools have been able to offer the statements without actually buying the equipment.

One of these companies, New York-based Nationar, has already signed the Savings Bank of Manchester and two other savings institutions to its service.

Several other vendors, including Broadway & Seymour, Charlotte, N.C., EDS Corp., Dallas, and Systematics Financial Services Inc., Little Rock, Ark., expect to sign the first customers to their image statement services in the upcoming months.

Raising Awareness

"One of the advantages of Fleet and BayBanks making a big play about check images is that it has raised consumer awareness," said Doug Anderson, senior vice president in operations at the $700 million-asset Savings Bank of Manchester.

"The big banks have carried the advertising budget to explain it to the consumer, and we're happy to be able to capitalize on that."

By the end of this month, Mr. Anderson said the Savings Bank of Manchester will be sending about 5,000 image-based checking statements to its premium checking accounts.

He expects the bank will move to send the statements to all customers sometime next year.

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