The microfilm machines once used to capture check images are turned off. Fewer customers are calling or visiting the bank to ask for copies of checks, since the images are available online. And the bank's technology budget has declined for two years in a row.
These are some of the developments that Huntington National Bank, the chief subsidiary of Huntington Bancshares Inc., points to as the benefits of its ongoing effort to suffuse the organization with image technology.
Images of checks and other items - including all manner of branch tickets and loan coupons - are captured at three central sites and stored in an in-house archive, which is now three years old and will eventually hold seven years of records.
"By integrating image throughout the back room, not only have we been able to drive cost down, but also improve customer service," said Wilton Dolloff, the executive vice president of operations and technology services at the Columbus, Ohio-based bank.
Imaging was a relatively dead topic during the dot-com boom years, but more recently the larger banks that had put it on the sideline have started to move it front and center. Though Huntington claims that imaging has been one of its top priorities since the early 1990s, when it began working with Unisys Corp. on the system in place today, the commitments of other large banks have fluctuated as other priorities suggested themselves.
Community banks, which have been more active in imaging, because they have more manageable loads of items, are also being swept up in the fervor. A poll released this month by the Independent Community Bankers of America found that 40% of community banks offer a form of check imaging, and another 46% plan to invest in the technology within 18 months.
Huntington is one of the larger banks that has added check images to its Web site and to some paper statements (with more to be added soon). Other large banks that have put check images online for consumers include Bank One Corp., Charter One Financial Corp., Wachovia Corp., and First Tennessee National Corp. Bank of America has started to introduce them state by state.
Before the images went online, Huntington had been retrieving about 40,000 checks a year on behalf of customers who requested them; since the online feature was introduced in late March, that number has gone "almost down to zero," Mr. Dolloff said. "Where you get the biggest paybacks is in the day-to-day service of the customer."
Washington Mutual Inc. said last week that it would install image technology in all its branches over the next two years, with Unisys as its vendor. Moving the image-capturing function from the back room to the branch puts Wamu in the vanguard.
Mr. Dolloff said that moving the function to the branch makes sense only at remote branches, where transporting items is more of an ordeal, and at branches that need to make more than one transportation run a day to bring items back to a centralized site. Huntington captures its images at two small private banking offices it maintains in Florida (which were not among those sold this year to SunTrust Banks Inc.), but not at other branches.
"We have not yet been able to work a business case yet that would justify doing it in high-volume offices," Mr. Dolloff said. "Our focus is to keep our offices more focused on servicing the customer, and we didn't want to sidetrack them from that to get into operational activities."
Plus, "We typically only have one transportation run per day back to the centralized site," he said. "Even if you do image on the site, you're going to have one transportation run, so we did not see the savings in it in our case."
Computer Sciences Corp. is Huntington's technology vendor for its in-house image archive, and the bank plans to seek a bank partner in the coming months for an image exchange program. Even though his bank set up its archive before the Viewpointe one was established, Mr. Dolloff said that he still favors an in-house archive - with its connections to other back-office systems and easy retrieval features - rather than the outsourced type that Viewpointe offers.
Next year the bank plans to lobby on behalf of the Check Clearing for the 21st Century bill - and to try to make sure that the final legislation gives banks the right to destroy the paper shortly after it is imaged.
"Full truncation is the most efficient for the bank," Mr. Dolloff said.
Huntington's three image-capturing centers use a "load balancing" technique, so that if one center is overtaxed, part of its workload is shifted to a center that is less busy, he said. "I don't know anybody else who does that."
Imaging has also helped boost the rate of courtesy amount recognition, which automatically reads the dollar amount written in the small box on the right side of a check. The recognition rate with traditional sorters was 50%, but imaging has raised that rate to 70%, and there has been a corresponding reduction in the manual work required to check the items that could not be read automatically, Mr. Dolloff said.
Joe Gottron, the chief information officer in Huntington's operations and technology services division, said that since the bank upgraded its online banking platform in March (as part of a vendor switch to Corillian Corp. from S1 Corp.), the number of active users - people who have used the service within the last 90 days - has more than doubled, to 115,000.
Real-time transaction updates have been added, Mr. Dolloff said, so that a customer who pays for lunch in a restaurant with a debit card can view the transaction online immediately afterward. If a child has a card linked to the account, "you can watch your child in college go from store to store to store."
Huntington gives credit for the real-time feature (and many other aspects of its online banking platform) to e-Bank, the software and services technology company that the bank helped create, and which counts Huntington as its chief customer. The bank's former head of technology, William M. Randle, is now the chief executive officer of e-Bank, which is also based in Columbus.
e-Bank's software unifies data across a bank's enterprise and makes it consistent across branches, call centers, the voice response unit, automated teller machines, online banking, and the sales and service platform.
Mr. Randle says his company's technology is different from standard customer relationship management techniques. "What we really have in e-Bank is an enterprise business integration engine that delivers the data to all of those channels and enables those channels to deliver consistent CRM," he said.
e-Bank takes a "totally different approach" from most CRM vendors, he said. "We've pulled the data in a dynamic, real-time fashion out in front of the legacy mainframe system." As a result there is "no need to data warehouse."
An updated version of e-Bank's core product, which will be more robust for commercial customers, is forthcoming, the company says.
Mr. Gottron said that the "single view of the customer" has been a focus of the technology operation since he joined Huntington in March 2001. A 16-year veteran of International Business Machines Corp., he joined the bank a month after Thomas E. Hoaglin became the chief executive officer.
There has been a "very dramatic cultural shift" during Mr. Hoaglin's tenure, according to Mr. Gottron. First, Huntington has scaled back its technology ambitions to focus exclusively on things that are directly and immediately useful to customers, he said. Mr. Randle, who left late last year to take the helm of e-Bank, had been steering the bank toward more experimental technology applications.
Despite the significant investments that have been needed to bring about the single customer view (which is still a work in progress), the senior management's commitment to technology efforts has not flagged, Mr. Gottron said. A new teller system has been installed using technology from Argo Data Research Corp. that connects to e-Bank on the back end. Next to be replaced are the call center and sales and service platforms. The corporate online bank will also get a facelift, Mr. Gottron said.
He wears a lapel pin that says "Go Ahead," which he says is the motto of the "new" Huntington. Employees should feel "empowered" to move forward with projects that they think will benefit the customer, he said.
Despite all the makeovers, his department has delivered declining budgets two years in a row, as automation has replaced manual processes and as the cost of image storage systems has come down Mr. Dolloff said. The numbers may be lower, but "we didn't do it at the sacrifice of customer service."
Mitchell R. Zoellner, the client executive at e-Bank, said that Huntington has "sustained its investment [in technology] while other banks give up on it - they can't see the medium return."
Mr. Dolloff interjected, "How many banks abandoned their imaging five or six years ago because they didn't see the payoff?"
Chris Musto, the vice president of research at Gomez Inc., a Waltham, Mass., firm that gauges the quality of financial services companies' Internet offerings, said that Huntington's progress in imaging is noteworthy but does not put the bank ahead of the pack.
"There has been a lot of rollout of online check imaging this year, and a lot of large banks are doing this," he said. "Huntington is not alone in having digitized its checks, and it's not alone in having brought some level of document imaging online."
The Citibank division of Citigroup Inc. already offers seven years of imaged statements online, Mr. Musto said. Also, "when Wachovia and First Union merged, one of the first things that happened was that the First Union customers got check imaging."
Three or four years ago "a number of large banks would tell us that there was no way that they could digitize their entire check inventory," but banks now have a stronger appreciation of how useful the Internet can be and of how many customers it reaches, Mr. Musto said.
