Several small California banks and one large thrift say that check image statements have given them a marketing edge over the state's largest banks, many of which are committed to check safekeeping.

Late last month, Sanwa Bank signed a contract for image statement software from Walnut, Calif.-based IA Corp. In doing so, it joined a short list of institutions in the state that already offer the statements.

Bank of Stockton and Bank of the West, with assets of $800 million and $4.3 billion, respectively, also are delivering image-based checking statements.

These institutions are finding that image statements, which consist of miniaturized copies of canceled checks, can dramatically reduce costs. Bank of the West has reduced postage costs by $200 million per year.

The service also appeals to customers of other banks who receive truncated statements but would like greater detail on their checking statements.

Despite the positive experiences of banks offering image statements, most of the state's largest institutions are unlikely to offer them anytime soon.

Bank of America Corp. and Wells Fargo & Co. capture images of checks in processing operations such as proofing and encoding of canceled checks. These are the areas where costs can be radically cut by reducing the number of times a single physical check must be sorted through the system.

But the big banks typically do not use images for statements because they do not see a payback in such an endeavor. Through truncated statements, many of the large institutions have already arrived at the postage cost savings promised by image statements.

Instead of returning canceled checks with a customer's account statement, the truncation banks send statements with a line showing the number of the canceled check, the date it was paid, and the amount.

Both Wells and Bank of America charge a monthly fee to customers who request canceled checks.

Wells Fargo tested image statement software two years ago, but decided not to go ahead with it.

"The large banks have trouble cost-justifying the use of image-based statements," said Thierry Leger, head of marketing for IA Corp., a $20 million company that specializes in image-based cash management software.

"If you process a large volume of checks and are already very efficient, then you don't save much by doing image statement rendering."

"It would be very expensive for us" to move to image statements, said Robert Wynne, a spokesman for BankAmerica Corp.

About 55% of BankAmerica's retail accounts have opted for truncation, also called check safekeeping.

If necessary, customers can obtain photocopies of several checks each month for free. The remaining 45% of customers pay $1.00 per month to have canceled checks returned to them.

"Most people don't need to see the check to know that it's cleared," Mr. Wynne said.

But it is exactly here that the smaller banks say they've found a marketing opportunity.

Bank of Stockton executives said that during the first six months the bank offered image statements, it signed up 1,000 new accounts - with more new accounts signed up in the first month than in the previous six.

About 97% of the bank's customers receive image statements, according to the company.

In focus groups held by Bank of the West, image statements were very well-received by those who now use truncated statements, according to Donald R. Ward, executive vice president and division manager of operations and systems at the bank.

"With BofA or Wells, you either don't get your checks back, or you get them back and pay a premium," said Mr. Ward.

"We figure we can offer the best of both worlds - you reduce the work required to return the check, and at the same time give the customer more than they would have if they had received a statement with no checks enclosed."

The bank does not charge a fee for image statements, but it does charge $1.00 to return a canceled check. It provides binders where customers can keep statements.

"We think image statements have given us a competitive advantage," said Robert Raye, senior vice president and director of marketing for Bank of the West.

"People tell us it's the best invention in banking since the shoe box."

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