Sanwa Bank California expects to soon be the largest bank in the Golden State to send images of checks, rather than the checks themselves, to corporate as well as retail customers.

Other California banks that offer image statements have done so primarily to appeal to retail customers, but the $7.7 billion-asset Sanwa plans to market check images to corporate customers first.

Commercial checks account for about 60% of the four million on-us checks that Sanwa processes each month.

Executives of Sanwa, a Los Angeles-based unit of $522 billion-asset Sanwa Bank Ltd., Osaka, Japan, see check imaging as a promising form of delivery, particularly for corporate customers.

The bank plans to introduce services that will allow corporate customers to retrieve check images on personal computers and store checks on CD-ROMs, during the second quarter.

Retail image statements are expected in the third quarter.

"Imaging is not a tactical decision, but a strategic decision," said Mark Cova, vice president of deposit services at Sanwa. "This takes PC banking and 24-hour telephone banking one step further.

"Today we reach customers through ATM networks, the telephone, and the home computer, but if you have a customer who needs to see a check, then you must rely on couriers, or send it through the mail."

Other banks that offer image statements have taken a different tack.

For instance, Bank of the West says it has found a niche for image statements among retail customers, in part because the state's two largest banks, Bank of America and Wells Fargo & Co., don't offer image statements and do charge fees to return checks.

Image statements provide customers with more information about each check - such as the name of the payee - than statements that merely list the checks.

Sanwa has purchased software for the undertaking from Walnut Creek, Calif.-based IA Corp., a $20 million company specializing in image-based cash management software.

The initial investment in hardware and software will be $1 million to $1.5 million; including maintenance costs, Sanwa expects to spend $3 million in five years, Mr. Cova said.

The project is expected to yield a return on investment of $2.5 million over five years, Mr. Cova said.

The bank might set up a fee schedule in which truncation would be the least expensive alternative, image statements would be a little more expensive, and the return of physical checks would be the most expensive.

Sanwa does not use image processing for high-speed proof encoding, although Mr. Cova did not rule it out.

In the near term, the bank is planning a service that allows companies to view cleared checks and return items via personal computer.

A customer can find out who bounced a check at least two days earlier than it would in the normal course of check clearing, and it could decide right away to stop accepting checks from that payer, Mr. Cova said.

In the future, Sanwa also could offer special statements to retail customers that assign categories for checks based on a two- or three-digit code that the customer writes on the check.

The statement could be designed to show checks under categories such as household budget, business expenses, or entertainment, so that customers can more easily keep track of their expenses.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.