ORLANDO - Corporate customers are voicing frustration about banks' sluggish shift toward check imaging.
In a panel discussion Tuesday at the 2005 Bank Administration Institute TransPay conference here, several treasury management executives said that image-exchange systems and remote deposit services can and should make funds available sooner, but still are not.
Russ Augsburg, the director of cash and banking operations at Allstate Insurance Co., said he was disappointed by "the slowness of the industry adoption rate" and described his long-term vision of what image technology should mean for his business.
If the deposit "is in by 10 o'clock, it should be good money by 2 o'clock," Mr. Augsburg said. "I don't mean just a little improvement in float."
This conference is perhaps the first industrywide gathering for financial institutions to compare their image-exchange capabilities since the Check Clearing for the 21st Century Act took effect last October, and Mr. Augsburg's comments drew nervous laughter from an audience composed mostly of bankers. As the banks' operations executives draw up their six-month report card for Check 21, their corporate clients seem to agree that progress has not met many people's expectations.
John D. "Denny" Carreker, the chairman and chief executive of Carreker Corp. and the panel's moderator, agreed that the use of imaging to clear and settle paper checks is "coming about slower than some of us thought, but it's still very profound." Carreker, of Dallas, makes software for image processing.
Two retailers on the panel said that their check volumes are dropping steadily, and while they are eager to use image systems that could improve their operations, they are not willing to invest much money or effort into them. They also said that with a high-turnover checkout staff, any new payment system must be easy to use.
Michael Carter, the accounts receivable manager at Publix Super Markets Inc., said that his customers are increasingly using payment cards instead of checks. "How much time do you spend revamping checks when it's a declining payment option?" he wondered.
Still, checks have not disappeared entirely for Publix, and the Lakeland, Fla., company is developing a proof-of-concept imaging test that Mr. Carter said "will allow us to work out the kinks without impacting our grocery stores."
The corporate customers also noted the check imaging, especially the remote-capture deposit service that lets them transmit check images to a bank for deposit, is increasingly competing with automated clearing house payment options such as the accounts receivable and point of payment category codes.
Mr. Augsburg said Allstate, of Northbrook, Ill., is installing check scanners at its 11,500 agent offices around the nation so that its local agents can convert checks to ACH payments.
In fact, ACH has become the company's preferred method for clearing customer payments. But Mr. Augsburg said Allstate has no plans to use ARC at its lockbox sites, because those centers handle a mix of both consumer payments, which are eligible for ARC, and business payments, which are not.
As a result, imaging might eventually supplant ACH as the preferred payment option, Mr. Augsburg said.
Harold Williams, a senior vice president and the chief administrative officer at the Creative Payments Solutions Inc. unit of BB&T Corp. of Winston-Salem, N.C., said multiple systems will probably coexist for some time.
"We don't know what is going to happen with ACH," he said. "In my opinion there will be a place for both."
