Fifth Third Bancorp is applying the imaging expertise that it has acquired in clearing check images to increase efficiency in other operations.
Though imaging technology is not new, observers say it has been used primarily for archiving completed paperwork, and that financial companies only recently started using it to create and manage that paperwork.
“The full benefit of image is to embrace it and say, We will reduce our dependence on paper and we will improve our workflow,” said Raymond Dury, Fifth Third’s chief information officer.
Mr. Dury said a deal announced last month illustrates the Cincinnati company’s strategic use of imaging. It agreed to use software from Fiserv Inc. to image-enable its mortgage processing functions, from loan origination to servicing.
It is already using imaging and workflow technology to improve its service to hospitals and other medical practices that use Fifth Third’s wholesale lockbox. Other new uses include Fifth Third’s internal business operation.
“The more you do, the greater your benefit,” Mr. Dury said.
Madhavi Mantha, a senior analyst at the research and consulting firm Celent LLC of Boston, said banks historically have used imaging for archiving files rather than the workflow associated with using those documents. Their imaging work has “tended to take place at the end of a process,” she said. “Imaging is now taking place at the front end of a process, so you can automate a business process that used to be manual and paper-based.”
Banks “are in the fairly early stages of moving toward an enterprise view of business process and content management,” she said.
Craig Le Clair, a senior analyst at Forrester Research Inc. in Cambridge, Mass., said imaging, optical character recognition, and workflow systems have been available since the 1990s but have generally not been used as part of companies’ efforts to boost efficiency.
“The thing that has changed is that technologies have gotten better and more stable, and the ability to link these technologies together has gotten better,” Mr. Le Clair said. The use of imaging at the start of a document’s life cycle is “a major shift in the document management market,” he said.
Mr. Dury said that the Fifth Third mortgage unit’s imaging project will probably be up and running in the fourth quarter, and is expected to make sending loan documents to various people more efficient. Archiving also should be easier, “so we don’t have to store all those file cabinets of mortgage documents.”
Within the next 12 months Fifth Third plans to hire a vendor to scan dealer-originated auto loans, which will further streamline the processing of those accounts, Mr. Dury said.
Fifth Third is about to start using imaging internally to track and approve digital versions of vendor invoices using a workflow engine and document management system, he said.
In April it started a service to translate health-care “explanation of benefits” documents for hospitals and doctors’ practices, promising fewer data-entry errors and faster access to information. Fifth Third converts the EOB forms into image files at its wholesale lockbox. Revenue Management Solutions LLC of Oklahoma City then uses OCR technology to convert the images into data files that feed directly into health-care providers’ patient accounting systems.
The goal is to reduce keyboard errors and speed payments processing. “This is for the majority of the health-care providers that are not yet electronically connected,” Mr. Dury said. “They get access to it a lot faster. We’ve combined it with our lockbox. We’ve combined it with our treasury management.”
The service complies with health-care privacy laws, Mr. Dury said. “If you’re good already, all the additional reporting only documents all the good things you were doing already.”
In health-care payment processing the $99.8 billion-asset Fifth Third competes against such larger providers as Bank of America Corp. and JPMorgan Chase & Co., which are rolling out technologies to electronify that type of payment information. “We’ve got access to the same technologies, and we’ve got probably an easier ability to implement, because we’re smaller,” Mr. Dury said.
Like its bigger rivals, Fifth Third is testing check image technology at its automated teller machines, but it is approaching that project cautiously, he said.
“We’re very diligent about where we put them and where we don’t,” Mr. Dury said. “It’s not inexpensive to do that. The imaging module is an add-on to most ATMs. On our new ATMs, we’re definitely enabling them right away.”
Fifth Third is also offering remote check-image capture to business customers, in both thin-client and thick-client versions, and is testing back-counter capture at remote branches in Ohio, Kentucky, and Tennessee, he said. “We can get the same kind of availability in those remote branches as in a city branch that gets picked up two or three times a day.”
Mr. Dury said his company has become the fifth-largest image-exchange bank on the SVPCO Image Payments Network operated by The Clearing House Payments Co. LLC, of New York, behind Bank of America, JPMorgan Chase, and Wachovia Corp.
“For a superregional bank, we’re knocking the socks off of it” as an image-exchange player, he said. “We’re looking for additional endpoints. We’re looking for additional partners.”
More than 30% of Fifth Third’s outgoing check volume is image, up from 18% to 20% in January, he said. “That’s a pretty steep curve.”
Fifth Third is using its connection to SVPCO to reach all its check trading partners, including those on the networks operated by the Federal Reserve banks and Metavante Corp., which is being spun off by the Milwaukee banking company Marshall & Ilsley Corp.
In June, Fifth Third became the second large banking company to use the SVPCO connection to reach the 4,000 institutions, mostly community banks, that use Metavante’s Endpoint Exchange Network.
“It’s rolling out exactly how we predicted it would,” Mr. Dury said. “If you’ve got the infrastructure there, use it.”
