Just a few years ago, check processing wasn't exactly a glamour job at Signet Bank. The equipment was noisy and the area was cluttered with paper.

"It had been called a back-office dungeon," said Ben Vaughan, senior vice president of Signet's image item processing centers.

Now it's a different story. Employees work in a quiet and clean environment, using ergonomic work stations to process the bank's daily check volume on its new Unisys Image High Speed Item Processing System.

Signet, based in Richmond, Va., began installing the system in November, 1990, and began to use the high-speed image system to process all its incoming checks the following April. The $11.1 billion-asset bank has completely converted to a proof-of-deposit image system in Richmond and now is installing it in Baltimore.

Capturing the Image

The system incorporates a camera on a high-speed reader-sorter that captures a digital image of the check, stores it on a retrieval module disk, and transmits the image directly to a workstation, where an operator keys in the amount.

The new image system offers several distinct efficiencies compared to the old method of processing. Checks go directly to the high-speed reader-sorter, rather than going through a proof machine first.

Operators work with images of the checks on their terminals, rather than manually processing the paper checks, thereby eliminating redundant balancing.

Installing the new system at Signet hasn't been trouble-free.

"When you choose to be on the leading edge of technology, you expect some problems," said Mr. Vaughan.

New Work Flow Significant

Signet's biggest challenge, however, was adapting to a changed work flow. The system required an almost complete revamping of check processing: proof machines were eliminated, transportation schedules were revised, and the balancing area was reconfigured. Hardware was upgraded, forms were redesigned, and sort patterns were written.

"Most important, branch operations had to be brought up to speed on the new system," he said.

But other areas - including trust, money-center, customer service, and all internal departments - had to become familiar with how the new system worked as well.

Changes Being Planned

Signet has several enhancements on the drawing board, including:

* Courtesy Amount Read (CAR), which will enable the system to read handwritten amounts on checks and deposits. The bank expects to implement this enhancement by the first quarter 1993.

* Image statements, such as those currently being used by American Express, which would reduce postage expense and shrink the volume of paper handled by back offices.

* Optical Character Recognition (OCR), a module in the reader-sorter that would enable the system to read OCR-font type directly from documents.

* Archiving, which would permit long-term storage of images. This capability would have various uses, including signature verification, transmittal of images throughout the bank, and customer-service applications.

Just how cost effective is it to be on the leading edge of imaging technology? Very, said Mr. Vaughan.

Avoiding Layoffs

"Our capital investment was $7.5 million, with an estimated savings of $8 million over five years," he said. "We hadn't planned on seeing any savings in the beginning. But in 1991, our first year using imaging, our cost was less than it would have been using the conventional system."

Work force and equipment reductions account for some of the cost savings.

"During the conversion period, we simply didn't fill positions as they became vacant, which eliminated layoffs," said Mr. Vaughan.

Signet is also looking at imaging applications for corporate account reconciliations and for interfacing to corporate accounts payable systems.

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