Corporate Clients Gripe About Bank Imaging Uptake

Steve Bills
May 5, 2005
American Banker

Following are excerpts taken from the May 5, 2005 edition of American Banker.

ORLANDO - Corporate customers are voicing frustration about banks' sluggish shift toward check imaging.

In a panel discussion Tuesday at the 2005 Bank Administration Institute TransPay conference here, several treasury management executives said that image-exchange systems and remote deposit services can and should make funds available sooner, but still are not.

Russ Augsburg, the director of cash and banking operations at Allstate Insurance Co., said he was disappointed by "the slowness of the industry adoption rate" and described his long-term vision of what image technology should mean for his business.

If the deposit "is in by 10 o'clock, it should be good money by 2 o'clock," Mr. Augsburg said. "I don't mean just a little improvement in float."

John D. "Denny" Carreker, the chairman and chief executive of Carreker Corp. and the panel's moderator, agreed that the use of imaging to clear and settle paper checks is "coming about slower than some of us thought, but it's still very profound." Carreker, of Dallas, makes software for image processing.

The corporate customers also noted the check imaging, especially the remote-capture deposit service that lets them transmit check images to a bank for deposit, is increasingly competing with automated clearing house payment options such as the accounts receivable and point of payment category codes.

Mr. Augsburg said Allstate, of Northbrook, Ill., is installing check scanners at its 11,500 agent offices around the nation so that its local agents can convert checks to ACH payments.

In fact, ACH has become the company's preferred method for clearing customer payments. But Mr. Augsburg said Allstate has no plans to use ARC at its lockbox sites, because those centers handle a mix of both consumer payments, which are eligible for ARC, and business payments, which are not.

As a result, imaging might eventually supplant ACH as the preferred payment option, Mr. Augsburg said.

Harold Williams, a senior vice president and the chief administrative officer at the Creative Payments Solutions Inc. unit of BB&T Corp. of Winston-Salem, N.C., said multiple systems will probably coexist for some time.

"We don't know what is going to happen with ACH," he said. "In my opinion there will be a place for both."