Nationar Signs First Two Customers for Statement Service
Two New York savings banks are the first institutions to sign up for a service that will provide their customers with checking account statements accompanied by copies of check images.
Ridgewood Savings Bank, Queens, N.Y., and Greene County Savings Bank, Catskill, N.Y., have contracted with Nationar, a New York-based check processing service provider, for a new image statement service called ImageTec.
Instead of receiving original checks back with their monthly statements, customers that sign up for the service will receive miniature copies of check images along with the standard summary of account activity.
Postage Savings Projected
The banks think the statements will be popular with customers because the check images are easier to store. The banks also hope to save postage because the statements weigh less.
"We can provide better quality service and customize our statements for specific market segments," said Harold Jones, senior vice president at Ridgewood Savings, a $1.5 billion saving institution with 14 branches. "We're looking at approximately $200,000 a year in reduced postage expenses if 60% of our customers take the image statements."
Nationar, which launched ImageTec this week, is the first item processing company to offer an image statement service aimed specifically at small and medium-size banks.
The Targeted Market
The company's 150 customers are mostly small and midsize banks and savings institutions. Nationar provides check processing, consulting, dividend checks, teller checks, and other services. The company was formerly the Savings Bank Trust Co.
Nationar began installing image-based check processing equipment at its Long Island processing center earlier this year. The company is using image capture equipment from Recognition Equipment Inc., Dallas, and image statement software from Cincinnati Bell Information Systems Inc.
Both Ridgewood and Green County previously used Nationar for check processing. Nationar executives say they expect other customers to follow suit.
A Selling Point
"The service allows community banks to differentiate themselves" from other community banks and from larger competitors, said William Sheluck Jr., president and chief executive officer.
Arne Johnson, senior vice president of the information management group at Nationar, said that five other institutions had signed up for the service but did not want to announce their plans for competitive reasons.
He also said that the company has had discussions with a few large New York City banks that are interested in offering image statements to private banking customers.
A handful of banks around the country are offering customers image statements.
These institutions installed their own image equipment rather than hire an outside firm, a practice known as outsourcing.
But many community banks cannot afford to install image-based check processing equipment and will choose outsourcing, said Nationar's Mr. Sheluck.
To help banks market the service to customers, Nationar is also offering marketing programs such as consumer research services, operations and product development consulting, strategic marketing support, among other services.
The ImageTec statement service is priced according to the number of statements. For customers with a high volume, the service is about 50 cents per statement, compared with 25 cents to 30 cents for traditional statement rendering.
Nationar plans to eventually install more image equipment to offer customers image-based back-end check processing. The company believes the investment for so-called proof of deposit systems is too steep right now, but hopes to have a system installed by 1993.