The mortgage unit of PNC Bank Corp. has started to use optical disk technology to store its extensive loan documentation files.

After one year of development, PNC Mortgage is installing the new imaging system at its Louisville, Ky. - based customer service site, which should be fully operational in August. Converting the documents from their current medium - microfiche - to optical disk will cut expenses, improve customer service, and allow instant computer access to mortgage documents.

Saving Time and Space

The decision to move to optical disks was not driven by technology, said Peter Begg, the executive vice president of PNC Mortgage, but by the need to save time and space.

"Here was a technology tool that will truly enable us to redesign our process," Mr. Begg said.

Currently, it can take as long as two days for service representatives to retrieve a file and answer customer queries. When the transfer of data from microfiche to disk is complete, Mr. Begg expects that waiting time to drop to as little as "half a minute." With 600,000 calls a year coming into the Louisville service center alone, that time can add up.

Eliminating 'Morass of Paper'

Saving the information optically, Mr. Begg expects, will bypass "the morass of paper that mortgages cause." Each of these 12-inch disks contain millions of bytes of information. In fact, two "jukeboxes" of disks can hold PNC's entire mortgage portfolio - more than 480,000 loan files.

PNC Mortgage will sink $3 million into this project overall, Mr. Begg said, with two-thirds of that going to hardware and software. Placing loan documentation on microfiche costs the company $500,000 a year, he added. 20% Reduction in Costs Seen "Once you get past the fixed cost, this is absolutely cheaper," he said, adding that PNC mortgage expects to see a 20% minimum reduction in costs.

PNC is using this technology within other paper-intensive divisions as well, including student loans, credit cards, and commercial lending. Although some banks are experimenting with optical disks in check storage, Mr. Begg said PNC was careful where this technology was being placed.

"I think the key is how you change the process, whether you're just inserting the technology or redesigning the workflow," he said.

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