PETER BRYTOWSKI
‘More efficient’

If it looks like a check, feels like a check and works like a check – it must be a check. Or is it?

In today’s banking world, rattled by heightened security concerns but functioning via improved technology, banks are supplementing actual checks found in customer’s bank statements with the digital images of checks cashed on that account.

While the process of digital imaging is a decade old, banking leaders now are making every effort to ensure that terrorist attacks, natural disasters or other disruptions would not disrupt the financial services industry.

Some banks, however, saw the benefits of electronics and began implementing the technology years ago.

“[Leominster Credit Union] began check imaging a couple of years ago because we felt that the future of banking was going to be in electronics and the current method [of distribution] was more manual,” said Peter Brytowski, vice president of information technology at Leominster Credit Union. “We were doing a lot of work from paper and now all of our documents are imaged. The minute they come in the door from the processing center, we transfer them to images and we are able to use them … It creates a more efficient method of processing.”

According to a survey by the Independent Community Bankers of America, 47 percent of community banks in the nation were using check-image technology in 2002 and 41 percent of community banks were considering implementation within the next year.

In Massachusetts, banks varying in size are garnering the cost benefits of check imaging, but bankers say they respect the state law that states a consumer can still receive the original checks at no added cost to the consumer.

‘Better Ways’

Louis H. Kruger, senior vice president of retail and operations at Plymouth Savings Bank, said check imaging can benefit the bank and consumer.

Because imaging would be costly and inefficient as a standard practice, many banks are pushing for the implementation of digital check imaging without harming the traditional values of some clients.

According to Kruger, check imaging reduces the cost of mailing because it reduces the size of bulky monthly statements, and it lowers the cost of the actual process of sorting the checks, making check imaging a less labor-intensive practice.

“We can retrieve a copy of the check in one day and have it to the customer in the next day,” said Kruger.

Brytowski said Leominster Credit Union, which has over $270 million assets, projected the cost to invest in digital imaging technology was the same amount as paper handling, with respect to the sorting, mailing and distribution of checks and statements.

“It was a lot of hard work and extra cost upfront, but this has sped up the process … and for the banking industry as a whole, we are not spending the money digging out information [from paper records],” said Brytowski. “As we build on the electronic systems, we can find better ways for delivery of our products.”

While electronic banking is still a relatively new concept to some consumers, banks are spending more time and money investing in technology and electronic upgrades.

Joseph Bartolotta, vice president of public relations and corporate communications at Eastern Bank in Lynn, said the bank has been offering check imaging for years and is beginning to invest in a new wave of technology.

“Our businesses are currently getting their images on CD-ROMs and we are finding that this way to store and archive business records is quite popular. Check imaging is a step in the process toward moving toward a paperless and infinitely more useful way of storing your financial records,” said Bartolotta.

David E. Floreen, senior vice president of government affairs and trust services at the Massachusetts Bankers Association, said banks in the Bay State that currently offer check-imaging services are seeing customer acceptance rates of over 99 percent for the product.

“This trend is triggered from a lot of reasons. The world has changed and technology has changed and there are a lot of folks who feel the current language is an impediment to doing the kinds of full electronic banking,” said Floreen.

Neal Wolfson, director of interactive banking at Fleet Bank, said banks would reap the benefits of investing in newer technology.

“There is a considerable investment in this type of technology but, long term, the industry is [moving] toward image exchange and it’s an important investment for the future,” said Wolfson. “Instead of paper exchange, we’ll be sending images back and forth electronically and that is why banks are making the investment in this technology.”

At Eastern Bank, Bartolotta said, 95 percent of customers are using check imaging. And now, customers can retrieve images of cancelled check online through Eastern’s new QuickConnect program.

“We have people thanking us for this service – it’s funny how a simple service like [imaging] and making this available online can make such a difference,” said Bartolotta.

Wolfson said Fleet Bank, which has $191 billion in assets, is looking to invest in ways to speed up the banking process for consumers.

“We are investing in image technology which would enable our customers to achieve images of checks online,” said Wolfson. “In addition, there are considerable investments [the bank] can obtain by looking up things online instead of spending hours looking through microfiche. It is much more efficient and it all can be handled much quicker for the customer.”

But for some customers, the rule “if it ain’t broke, don’t fix it” still applies to the original distribution method.

Kruger said Wareham-based Plymouth Savings Bank, which has $1.3 billion in assets, distributes check-image bank statements to 75 percent to 80 percent of its customers while the other bank customers remain comfortable with the original format.

“The 20 [percent] to 25 percent of the clients who don’t use check imaging are based on tradition – it’s a comfort level they have and that comfort level runs through the generational lines,” said Kruger. “The preference would be to do check imaging on everyone … I can’t see any negative to a check-imaging situation and I don’t see why all banks wouldn’t convert over.”

Melanie Nayer may be reached at mnayer@thewarrengroup.com.