BILL KELVIE

Executive vice president

Federal National Mortgage Association

IMAGING TECHNOLOGY has permitted us to get a significant reduction of our head count in a very paper-intensive industry. We've got a major imaging project under way. We used to have vaults in each of our five regions for our notes. We've used reengineering principles and centralized our document delivery facility. We've cut a day from our funding cycle. Our customers get their funds a day earlier. We are also more knowledgeable about error resolution because we can access and handle documents.

It is largely transparent (to customers). We can reconcile and troubleshoot in a more timely way. When you delay work you wind up doing it twice. In imaging, you do it once and it's complete. Once the note is scanned, you can move it around locally. The speed and control means lower costs. But in a number of areas, imaging does not lend itself to lower costs. Over a wide area network, it is still expensive. If you are constantly accessing a note from remote locations, your economies of scale are going to be a lot harder to achieve.

Rather than scan paper, eventually we should remove it completely with electronic data interchange. With imaging you are still sending digitized copy of paper. If I was (planning) an architecture for the industry, I would strongly emphasize straight EDI transactions rather than going to imaging.

C. EDWARD DUNMIRE

President

New Bethlehem Bank

New Bethlehem, Pa.

WE ARE FINDING that imaging has improved our relationships with our customers. We're a community bank, with $120 million in assets, and service is what we're all about.

The image camera has been turned on for four days (as of Nov. 3) and we are receiving an excellent response. I personally talked to a dozen of our customers. Everyone, except for one person, reacted favorably. The one who didn't give a favorable response didn't really understand it.

Our employees also love it. It has reduced the time it takes to research a check to minutes rather than the days it might have taken in the past.

Eventually, we plan on using it in our loan documentation area. With the economies of scale that can be achieved with imaging and with the customer response, there is no other way to go. We'll pay for our system in about four years. And as other institutions' check processing equipment depreciates, they will go for imaging as well.

PATRICK COLLINS

Senior vice president

First Tennessee Bank

Memphis

THERE ARE TWO TYPES of customers, the corporate and the smaller commercial businesses. The corporate customers are already reviewing their own organization and how imaging can help them. They want to know how they can reduce filing and how they can capture an image. The commercial side is beginning to get on board and use image for filing statements and such.

We have been providing image statements for about three years. We mostly do check-related processes with imaging, but we are looking at other areas. It is going to expand as much as one's imagination will let it expand. Once the platform is in place, once you have made the commitment to it, you can take it anywhere. It is a building-block process. It is natural to transition to anything with high volumes, such as mortgage payments, credit card payments, and remittance payments.

In the last few years, the image quality has gotten better and it's less expensive. The people who program the systems have a better understanding of how it is used in actuality. The images are becoming more accessible.

Imaging is still at an embryonic stage. We need to work with the customers to show them what it can do for them. We need to package it so it is understandable and user-friendly.

JEFF BUTLER

Managing director

Countrywide Funding Corp.

Pasadena, Calif.

ONE OF THE THINGS everyone has hoped for is that imaging would provide us with the ability to get information more readily. Customers want their questions answered right there, not in two days. If a customer wants something, all the (customer service representatives) have to do is point and click and it can be faxed directly to consumers. Customers don't care if you have the document as long as they get what they want in an easy fashion.

Imaging has changed from the good old days of scan, store, and retrieve and blossomed into scanning or digitizing it, with the ability to move the image around from desktop to desktop. It is part of the whole reengineering process and a way of looking at how an organization should work.

The mortgage industry was behind the curve to implement imaging. Part of the problem has been that there are no serious standards. Most systems are proprietary so my system A couldn't interact with your system B. Many of the government agencies the mortgage industry dealt with mandated paper. It didn't make sense to spend lots of money to implement imaging when the guy you deliver the documents to still wanted paper.

REX M. SCOTT

Principal

Scott Image Associates Inc.

Sanford, N.C.

FINANCIAL SERVICE ORGANIZATIONS can hand commercial customers a CD- ROM with their items so that they become immediately accessible on- line. For personal customers, imaging is giving them information that is organized, convenient, accessible. They do not have to fumble through checks but can keep records in a notebook.

For both personal and commercial accounts, the bank can access items within a matter of minutes. It is a far more efficient way to deliver service. Customers expect that. They want their pizza in 30 minutes, so why should they differ in what they expect from their bank? If it is implemented in the proper way, there is no question that imaging can be a phenomenal success. Of the 50 plus banks we have helped to implement, we have had an average of 99% of the retail customers accept image statements, and 97% of the commercial customers. The success is dependent on the way it is introduced. You must educate the staff to understand the product and give them the tools to convince those customers on the fence.

JIM SUTTON

Manager, check systems

Earnings Performance Group

Short Hills, N.J.

FROM MY VIEW, imaging has not done a heck of a lot. Most of the focus has been on internal processes and cost reduction. The only thing the customer has seen different is in such areas as checking statements.

There are a number of technological things that need to come together. For one, the archival storage costs need to be as cheap as microfilm. We are close to that curve now. The interchange standards between different image proprietary systems needs to be worked on. Eventually, we might be exchanging images instead of paper, but we are not there yet. First, image must be accepted as legal representation of a document. That will eventually go through the courts. The recognition technology also needs work. When it becomes truly a commodity, when you can make it work efficiently at your speed and fonts, then we will be able to take the check without a lot of rekeying work.

Long term, there are great benefits. By simply scanning in a check, a bank will get access to huge amounts of data that can be exploited for advertising or marketing purposes. Instead of a paper document that a bank is obligated to store, it will become an asset to exploit, where they can use the data to provide additional services or pinpoint marketing.

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