New Orleans - Interbold of North Canton, Ohio, one of two major players in the domestic automated teller machine market, has announced a software enhancement that will allow ATMs to read handwritten numbers on deposited checks.
The enhancement, to be commercially available by the end of next year, was designed by International Business Machines Corp., Armonk, N.Y., for Interbold's Intelligent Depositor Module - an ATM that projects images of deposited checks on its display screen.
Access to this software is exactly the type of benefit Diebold Inc., Canton, Ohio, hoped to gain from merging its ATM operations with IBM's to form Interbold in 1990.
The Comfort Factor
Several banks, including PNC Bank Corp., Pittsburgh, have installed the image-enabled ATMs in the belief that consumers are more comfortable depositing checks at ATMs when given visual confirmation of the machine's acceptance of the deposit.
PNC has installed about 30 of the terminals, and Interbold said about 100 are deployed nationwide. Experts say that number could rise significantly with the emergence of the new software.
"We are interested in the software insofar as it will allow us to do some things we haven't done before while also delivering some cost benefits," said a PNC spokesman. However, the spokesman said that PNC had not yet committed to purchasing the software.
Character recognition software is not new. Mellon Bank Corp., Pittsburgh, has used various versions of the technology in its check processing operations for years.
But with the recent acceptance of image-based check processing, in which computerized pictures of checks are processed in lieu of the paper items themselves, new applications for the technology have begun to emerge, spawning interest from institutions, such as PNC, that wish to reduce the cost of handling paper checks.
"The intelligent character recognition enhancement is an important step forward in the pursuit of paperless check processing," said Alben W. Warf, general manager at Interbold.
"The ability of the ATM to actually verify the amount on the check will provide an extra level of security and enable financial institutions to significantly reduce costs," in their back-office operations, he said.
The software used for character recognition on the InterBold ATM is an adaptation of the IBM software used by Mellon and Barclays Bank PLC, London, in their multimillion-dollar check image processing systems.
A customer using an ATM equipped with the software deposits a check - sans the usual envelope - in the deposit-taking slot. Within a few seconds, an image of the deposited check appears on the display screen.
The customer is then prompted to enter the amount appearing on the check using the ATM keyboard. The ATM software then compares the shapes of the numbers entered by the customer with those in the amount field on the check.
If the character recognition software comes up with a reasonable match to the numbers, the Intelligent Depository Module can cash the check immediately - to the penny, if desired.
The financial institution can set the criteria for what it deems a "reasonable" numbers match.
In addition to reading the amount filed on the check, the Interbold ATM also reads the magnetic ink line at the bottom of the check and can send that information over a network.
The images created by the ATM are stored in an industry standard format, which enables them to be sent over computer lines to processing centers and branch locations.
The portability of the check image is an important component in the cost-justification of many imaging systems. By making the check image accessible through networked personal computers, bankers believe they can gain financial benefits in areas outside check processing.
For instance, customer service efficiency will be improved, as bank representatives are able to more quickly answer queries about canceled checks and to fulfill requests for copies in a matter of hours - whereas it now takes days to get such copies from microfiche.