Systematics Financial Services Inc. said Tuesday it plans to install an imaging system in its New Jersey check processing center later this year.
With the announcement, the Little Rock, Ark.-based company became the first provider of check processing services to say it will use a new technology called image proof of deposit.
Other technology outsourcing firms, including Electronic Data Systems Corp. of Plano, Tex., and Nationar of New York have begun selling so-called image-statement services, in which copies of checks are printed on sheets of paper stuffed into monthly statements.
The check copies replace the original check. Some banks charge a small fee for the service, in the belief that check copies are easier to handle than original checks.
Cuts Amount of Data Entry
The image proof of deposit technology is supposed to provide banks with big back-office cost savings, by reducing the amount of data entry needed to process deposited checks.
The technology enables computers to automatically read the dollar amount written on a check, and then record it into computer records, and encode it onto the back of a check.
"We think its going to give us a tremendous boost," said Robert Taylor, a Systematics vice president.
Systematics will buy Unisys Corp.'s Infoimage Image Item Processing System.
The computers, check sorters, and software that make up the system will cost tens of millions of dollars, according to a check processing expert who asked not to be identified.
Systematics expects to get enough cost savings and new revenue from the technology to pay for its investement within five years, Mr. Taylor said.
Systematics plans to begin installing the Infoimage system in its Piscataway, N.J., check processing center in the fourth quarter of this year, Mr. Taylor said. The center processes 122 million checks annually for 125 financial institutions, all of which are located within a 500-mile radius.
Will Be Used to Rectify Errors
Systematics bought the center last year from the Federal Home Loan Bank of New York.
Initially, Systematics will use the system to help rectify errors, such as when consumers write a different amount on their deposit slip than on their check.
Systematics plans to start using the Infoimage's proof of deposit capability early next year.
By the end of next year, Systematics plans to buy another computer system that will enable it to create image statements.
Late next year, Systematics plans to install a check imaging system in its two California check processing centers, which, combined, support about the same number of banks that the Piscataway center serves.
In late 1994 and early 1995, Systematics plans to start selling new check image services that would,. for example, let banks return check images electronically to corporations, or would use computers to verify check signatures.