Ohio Bank's Image System Handling Nearly All Checks

Huntington Bancshares Inc. has reached a milestone in getting its check image processing system from Unisys Corp. into day-to-day use.

Columbus, Ohio-based Huntington last week became the first bank to use imaging to process all the checks it receives from its branches. Huntington and other banks already capture the images of checks from other banks and from corporations.

Branches, which provide 40% of the checks that the bank processes, send them without magnetic-ink coding of the dollar amount and other data. Unencoded checks exemplify the items on which image processing can save the most money; without the technology, back-office clerks must encode each check individually.

Projected Savings

Huntington hopes imaging will save half a million dollars a year in operating costs, beginning in mid-1992.

Capturing the images of already-encoded checks let the bank reduce its check-balancing staff of 25 to 20. Using images for all checks, the bank expects to cut a staff of 60 encoders in half by the end of next year.

Huntington and another Unisys system user, Signet Banking Corp., Richmond, are neck and neck in shifting check operations to imaging systems that can cost millions of dollars to install. Other banks are testing a check imaging system from International Business Machines Corp., but they are believed to be further behind.

|Working Out the Kinks'

"It's a great technology, and I don't think people realize that it's already here," said Ben Vaughan, a senior vice president at Signet Bank.

Huntington is running about 150,000 unencoded checks through its imaging system each night. The bank uses a "power encoder" at the end of the imaging process that quickly prints the magnetic-ink processing codes onto checks.

"We're still working out the kinks, still having minor problems with workflow," said Rick Sellers, president of Huntington Services Co., the automation unit of Huntington Bancshares. "If [unencoded] volume kicks up to 250,000, we're not so sure we could handle so big a jump in one night."

For example, problems arose with the power encoders recently. Pockets that hold the checks as they are encoded were too small, and created a bottleneck when too many items were sent through. Mr. Sellers said the bank got around the problem, which Unisys is fixing, by stationing employees beside its three power encoders to ensure that checks did not get stuck.

"We've got three power encoders, but they're not operating at the speed we'd intended," said Mr. Sellers. "We have to babysit more, but we can still continue to keep it in production as long as the volume is relatively low." The bank expects to be processing images of about 400,000 unencoded checks at the beginning of November.

Huntington processes between 800,000 and one million items per day.

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