Wells Fargo Buys Into Check-Image Sharing

Computerworld - Wells Fargo & Co. last week announced that it has bought into Viewpointe Archive Services LLC in order to share electronic check images with other banks and reduce the amount of paper checks it ships around the country.

The use of Viewpointe's check archive and ImageShare exchange service also will free Wells Fargo from the need to set up connections with individual banks.

Viewpointe, which was founded in 2000 by Bank of America Corp., J.P. Morgan Chase & Co. and IBM, enables members to send check images to a central repository. Banks can then set rules for sharing the images with one another.

"The opportunity now with Viewpointe is to move to something we call 'image on demand,' which is loading images onto a common archive, as opposed to shipping those images and exchanging them one bank at a time," said Mitch Christensen, executive vice president of payment strategies at Wells Fargo.

Christensen said the San Francisco-based bank has been sharing check images with the Federal Reserve Bank and The Clearing House in New York for years through its own data warehouse.

New Territory

But Wells Fargo, which captures 4.5 billion check images each year, has never used Viewpointe's services and will have to establish a network connection with the New York-based archiving company.

The bank also has to migrate its existing check images to Viewpointe and create a system to transmit new images as they're captured at its regional scanning centers.

In addition, Wells Fargo is about to kick off a 12-to-18-month project to install check-image scanners at the teller windows in its 6,000 branch offices throughout the U.S. Images captured on those devices will be shipped directly to Viewpointe as well, according to Christensen.

Financial terms of the deal between Wells Fargo and Viewpointe weren't disclosed, and Christensen declined to say how much it will cost the bank to link to Viewpointe's systems and deploy the branch-office scanners. He also wouldn't say how much Wells Fargo is expected to save on costs by using the Viewpointe service.

David Medeiros, an analyst at TowerGroup in Needham, Mass., said Wells Fargo's foray into check-image sharing will likely push banks that regularly do business with it to become Viewpointe users themselves.

The door for exchanging check images between banks was opened by the Check Clearing for the 21st Century Act, or Check 21, which took effect Oct. 28. Check 21 allows banks to substitute image-replacement documents for original paper checks, which can then be destroyed.

Viewpointe members SunTrust Banks Inc. in Atlanta and First Horizon National Corp. in Memphis last month claimed to be the first banks in the U.S. to agree to share check images .