BancorpSouth Inc. has become the third banking company in two months to agree to connect its own check image archive to the massive shared repository operated by Viewpointe Archive Services LLC.
Viewpointe recently permitted nonmembers to share images with its members. The BancorpSouth agreement, announced Monday, demonstrates that the new strategy is helping the vendor sign up outside banks to its Pointe2Pointe image-exchange service.
The other two recent deals were with Compass Bancshares Inc. of Birmingham, Ala., and Synovus Financial Corp. of Columbus, Ga.
This is the third link to an image network for the $10.8 billion-asset BancorpSouth, of Tupelo, Miss. Bill Gully, a first vice president at the company, said it has been sending items to the Federal Reserve since December, using the central bank's FedForward service. It has also been sending and receiving image files since January over the Endpoint Exchange Network operated by Metavante Corp., the technology subsidiary of the Milwaukee banking company Marshall & Ilsley Corp.
"Viewpointe was a natural extension for us" and "the next best opportunity" to boost BancorpSouth's image-exchange volume, Mr. Gully said. "Our philosophy is to clear electronically those items that make sense."
BancorpSouth is using images or image replacement documents to clear about 8% of its checks, but those items account for 25% to 30% of its dollar value, he said.
The Viewpointe connection could increase those numbers significantly. Viewpointe's 11 customers include several of the country's largest banks, and it claims they store about 65% to 70% of the nation's check volume within the Viewpointe archive.
Mr. Gully would not say how much of BancorpSouth's check volume is drawn on Viewpointe banks. He said his company plans to start talking this week with potential trading partners that store images with Viewpointe. BancorpSouth must complete separate agreements with each banking company in order to share images with any that are Viewpointe members.
He said the negotiations would focus on trading partners that have large volumes in Mississippi and Alabama, where BancorpSouth has many of its 250 branches. He mentioned several candidates, including Bank of America Corp. of Charlotte, First Horizon National Corp. of Memphis, and SunTrust Banks Inc. of Atlanta.
BancorpSouth plans a 120-day project to connect its image systems to Viewpointe's. Mr. Gully said he hopes to be exchanging images with at least one other bank by the fourth quarter.
Viewpointe, of Charlotte, was originally developed as a shared archive that allowed members to clear checks within the system. However, it modified its model in May and allowed nonmember banks to connect their own archives to Viewpointe's.
Jennifer Lucas, Viewpointe's marketing director, said the company is "seeing a lot of momentum" from the shift to image clearing. "We're seeing a lot of people ready to go and looking for trading partners." BancorpSouth is smaller than most of Viewpointe's customers, she said, but "they're definitely aggressive and ready to go, and that's the kind of organization that we're looking to partner with."
Aaron McPherson, the manager of payments research at Financial Insights Inc. of Framingham, Mass., said many banks can transmit image files but few are ready to receive them.
"That's a continuing problem," he said, but BancorpSouth's readiness to receive is a sign that the industry is gaining ground. "We should start to see volumes escalate by the end of this year. It does look like it's happening, finally."
