S1 Corp. will be integrating image-based check clearing software from the less well-known Alogent Corp. into its own popular teller system.
The plan, announced Thursday, will enable S1 Teller users to capture digital images of checks and deposit slips at the branch.
The Alogent product, Sierra Xpedite, uses optical character recognition to verify that the amount written on checks and deposit slips match. "You not only capture [digital images of] a transaction, but you do the proofing, balancing, and validation of the deposit while the customer is standing there," said Vijay Balakrishnan, Alogent's executive vice president of marketing.
Automating functions such as verifying the customer's math frees the teller "to sell and service the customer," Mr. Balakrishnan said.
Sean Dwyer, S1's vice president of channel sales and alliances, said the integration work is under way. A version of Alogent's program optimized to run with S1 Teller should be ready for delivery by early in the fourth, he said. The partners, both of Atlanta, will start selling it next month, after completing proof of the concept, Mr. Dwyer said.
S1, formed in 1996 as a maker of Internet banking software, today offers a range of channel applications for cash management, call centers, branches, and tellers, and an integration system called Enterprise.
Mr. Dwyer said the long-term goal of the Alogent partnership is to incorporate image capabilities in other applications, such as call center or cash management systems, improving banks' access to information about their customers.
Banks are scrambling to prepare for the Check Clearing for the 21st Century Act, which is widely expected to be a major driver in the transition to image-based electronic check clearing.
S1 and Alogent are not the first to form such an alliance. Robert Hunt, a senior analyst at TowerGroup, noted that in November the image-technology vendor Carreker Corp. and the core processing software firm Argo Data Resource Corp., both of Dallas, expanded their alliance to include branch image-capture.
Both of these alliances merge complementary technology components into a single package that aims to ease the transition to image settlement. "These alliances make perfect sense," said Mr. Hunt, whose research firm is based in Needham, Mass.
The S1 pact could open up the U.S. market for Alogent, Mr. Balakrishnan said. One thousand banking companies here use S1's teller system.
Alogent, which is nine years old, has been most successful in the United Kingdom. There its software underlies an image-based check-clearing venture, Intelligent Processing Solutions Ltd. (iPSL), that was formed by Lloyds TSB Bank PLC, Barclays Bank PLC, and Unisys Payment Services Ltd.
But Alogent has also made some unannounced sales in the United States, Mr. Balakrishnan said. It is working with a top-10 U.S. banking company to install Xpedite software at 18,000 teller stations, he said.
That is "without doubt … the largest deposit automation implementation anywhere in the world," Mr. Balakrishnan said. The contract prevents him from naming the bank, he said. "They're in the process of rolling it out."
(Alogent's Web site lists Bank One Corp. of Chicago and Wells Fargo & Co. of San Francisco as customers. Representatives of Bank One and Wells Fargo did not respond to requests for information about their relationships with the vendor.)
Richard Winston, a partner in the financial services group of the consulting firm Accenture Ltd., warned that many of the new image technologies are unproven, products of a "land grab" by vendors rushing to establish their position in the Check 21 marketplace.
"Very little of it is production-hardened. There's going to be some real work in putting these solutions in place and making them work," Mr. Winston said.
Mr. Hunt noted that despite the pell-mell rush by banks and vendors to prepare for image exchange and settlement, there is plenty of time for them to install the needed technology. "Check 21 will be a several-year transition process," he said. "We're at the crest of a whole reengineering process here, but it may take five to seven years before we're in a fully electronic world."
S1 stock closed Friday at $8.28, up 3% for the week. The company is scheduled to report its first-quarter earnings on Wednesday.
