Wachovia Joins NCR on Imaging

Bank Testing AT&T Unit's Check-Processing System

Wachovia Corp. and NCR Corp. announced this week that they had teamed up to develop and test an image-processing system for check operations.

The banking company is the first to test NCR's system.

Wachovia chose to work with NCR, a subsidiary of American Telephone and Telegraph Co., despite being a large user of check-processing hardware and software from International Business Machines Corp.

Many banks in similar positions apparently plan to buy image systems from IBM when they become available.

Others have opted for a check-imaging system from Unisys Corp.

|Open Systems' Design

Wachovia executives said they chose NCR's image technology because it is based on an "open systems" design that can easily communicate with a variety of vendors' hardware.

"One of the challenges for us and NCR will be to make this thing work with our existing check-processing system," said Bob Hill, vice president of check processing at Wachovia, which is based in Winston-Salem, N.C.

It is unclear how much Wachovia is investing. Mr. Hill declined to say. NCR officials said that their company and Wachovia would devote "resources" to the partnership, but they declined to be specific.

In such partnerships, sources said, banks typically get most equipment for free in exchange for testing the system and making recommendations.

The banking company may also get large discounts if it decides to buy more equipment.

Further Partnerships

Officials of NCR, which is based in Dayton, Ohio, said they will also form testing partnerships this year with two other large banks.

The New York Clearing House is also looking at the NCR system for a test that it plans to begin early next year.

Wachovia is in the first phase of a five-part test that will continue for several months.

The company has installed some NCR imaging equipment and will test the system's capabilities in capturing images, encoding checks, recognizing characters, balancing, and reconciliation.

The system is designed for the back-end processing of unencoded checks, also known as the proof-of-deposit function, not for processing checks that have been encoded by other banks or for producing statements that contain laser-printed copies of cleared checks.

Kathleen Dyer, director of imaging systems in the financial systems division at NCR, said her company is taking this approach because proof of deposit is the one application in which image technology offers a payback on a bank's investment.

NCR will add image statements and image archiving capabilities later, she said.

Using Regional Centers

The test will be done at Wachovia's operations facility in Atlanta. But the bank has seven other operations centers of varying sizes in Georgia and North Carolina. It wants to explore capturing images of unencoded checks at these sites, rather than centralizing check processing in one or two large facilities.

If NCR can build an interface between its image systems and IBM check-processing systems, it will mean more choices for banks that want to move toward image technology.

"This is a way for [Wachovia officials] to hedge their bets," said Chuck McDonough of Andersen Consulting. For banks that want to keep their IBM check-processing systems, he said "NCR would be a good alternative."

NCR's system uses a line of computers based on the Unix operating system. The check-processing equipment that Wachovia will test has two functions -- it can be used either to capture images or encode checks at high speed.

Price: $175,000 to $225,000

The apparatus is said to capture images of up to 500 items per minute and to encode 400 items per minute. It is priced at $175,000 to $225,000, depending on configuration. The complete system -- fully configured with workstations, server computers for data handling, and software -- would cost more.

Checks will be fed through the new equipment, which can capture images and read handwritten amounts. The information is then distributed to workstations, where operators complete balancing tasks and key in dollar amounts that could not be recognized by the system. The checks are then encoded.

NCR is building software into the system to let IBM host computers for account posting recognize information as though it came from an IBM check-processing device.

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