NCR Corp. is stepping up its effort to make image technology available to community banks.

The Dayton, Ohio-based unit of American Telephone and Telegraph Co. has contracted with Document Solutions Inc., Birmingham, Ala., to provide software for the NCR 7780 item processor. The software will allow the 7780 to make images of canceled checks.

NCR's check-imaging capability was unveiled earlier this year at a check-processing conference in Phoenix. It is the nucleus of the only complete imaging system in a price range generally affordable for community banks - $100,000 to $300,000 for the basic components.

With the software agreement, the 7780 hardware - called a transport - can produce monthly check statements that include digitized images of cleared checks.

Multimillion-dollar systems to produce image statements are already in full operation at major banking companies such as Comerica Inc., Detroit, and Fleet Financial Group, Providence, R.I.

Ground-Floor Opportunity

Although experts expect image bank statements to be common in two or three years, many community banks that invest in the technology today may be getting in on the ground floor of a business opportunity.

"Image statements have yet to catch on in many regions," said Rex M. Scott, an imaging consultant based in Rocky Mount, N.C. "In many cases, the opportunity is still there for community banks to beat larger competitors to the punch."

And other experts believe the novelty of a new product such as image-based statements could affect market share in the competition for new deposits.

Mr. Scott speaks from experience. Until a few months ago, he was the head operations officer at Unity Bank and Trust Co., a $141 million-asset institution in Rocky Mount that has been issuing image statements since early 1992.

In the shadows of super-regional banks Wachovia Corp. and First Union Corp., Unity Bank became the first bank in its area to issue image statements. The statements have met with wide acceptance - 98% of the bank's 10,000 checking customers receive the statements today.

The system costs about $250,000, Mr. Scott said. Estimating that the streamlined statements cost about 40% less to mail than conventional statements with canceled checks, Mr. Scott said the system would pay for itself in four to five years.

A handful of banks have purchased the new NCR transport with the Document Solutions software, but the systems - which process about 500 items per minute - are not yet up and running.

The Document Solutions software runs on a personal computer, and NCR officials said they were finalizing agreements with vendors of similar software for other types of computer operating systems.

A typical NCR 7780 system equipped with Document Solutions software would consist of the transport, personal-computer servers, a high-resolution monitor, laser printers, and an optical jukebox, which stores discs of data that can be retrieved on demand.

NCR will target sales efforts at about 7,200 financial institutions with assets of $50 million to $700 million.

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