Execs Keen on Automation, Wary on Imaging

A survey by the American Bankers Association has found that many bankers are eager to invest in retail delivery technology but are reluctant to invest in image processing.

About 60% of the operations professionals responding to a questionnaire distributed at the ABA's National Operations and Automation Conference expect their institutions to expand branch automation services, and more than 30% plan to increase investments in automated teller machines and voice response systems.

Image processing, a promising technology for check operations, still ranks among the most interesting technologies to the bankers surveyed. But few indicated that their institutions would be spending money on it soon.

Gloomy on Outsourcing

Bankers were also somewhat pessimistic on the future of outsourcing, in which a financial institution pays a contractor to handle some computer operations.

"Imaging and outsourcing are still quite new and unexplored by many bankers," said Robert J. Buskas, chairman of the ABA's operations and automation division. "We are getting more information on these areas, but some buyers are waiting for the technology to stabilize."

Among the 121 bankers responding to the survey, 26% ranked outsourcing as the most important issue facing operations managers. But less than 5% reported plans to outsource any part of their computer operations soon.

Team Bank Likes It

Outsourcing has proved an effective tool for stabilizing costs and simplifying back office operations at a number of institutions, such as Team Bank, Fort Worth, Tex., and Republic New York Corp.

But a number of high profile institutions with large outsourcing agreements have been hitting the skids recently, causing some bankers to question the long-term benefits of the trend. "Profitable banks may not be as diligent in looking for alternative processing methods, while banks experiencing heavy losses might find out it's too late," said John Scopaz, chief technologist at Republic. "I suspect this could be responsible if there appears to be waning interest."

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