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Banking Special Issue: Zapping Paperwork

Table of Contents


The Future of Bank Imaging

The green wall

Relationship Banking

Proof of Deposit

POD Case Study

Designing Forms for a Banking Environment

File Folders

Thrashing Folders

Staging Folders

Using COLD (a case study)

Check Processing: The need for Speed

Printing Your Own Checks

Check Processing 101

Images from the Fed

First National Bank & the Fed (case study)

Glossary of Bank Image Technology


by Joe Devlin

Imaging and COLD break the Ice in Customer Service and Credit Collections

The COLD system is used at Zapp to teach up all the reports generated within Zapp's core accounting systems.


Like many other mid-sized banks, Zapp Bank, a $220 million, St. Cloud, MN-based institution, has added imaging capabilities. Zapp supports three imaging islands of automation: a COLD system, used by customer support; a document imaging system, used by the loan department; and a check imaging system, used for the POD process. There is almost no linkage between the three, since they serve different functions in different branches.

Operate in the COLD

The first imaging system put into place at Zapp was a COLD (Computer Output to Laser Disk) system used primarily by its operations and customer support personnel. The system was sold, installed and is supported by the Banker's Equipment Service Inc. (BES), a Burnsville MN-based VAR specializing in banking.

"The COLD system is used at Zapp to back up all the reports generated within Zapp's core accounting systems," explains Jim Brummer, BES product manager. They chose to use MacroFiche software from Rochester Hills, MI-based MacroSoft.

Macrofiche provides a powerful search engine capable of pulling up whole reports quickly, or finding very specific information. Two separate search approaches are utilized to provide this flexibility. Primary indexes, which facilitate quick traversal from report to report, are generated by automatic procedures that extract indexing information from report headers.

It can also reach into the report themselves to extract indexing information. MacroFiche supports character searches of the ASCII stream that composes the body of each report. The bank uses an indexed search to narrow down the number of documents to be searched, or a boolean to create a combined index and character search. For example, all documents bearing a certain name during a certain time period could be pulled.

Imaging Helps the Credit Department

The second imaging system put into place at Zapp is a document imaging system used by its credit and collections department. Like the COLD system, this was also sold and installed by Banker's Equipment Service and relies on software provided by MacroSoft.

In January 1995 we started scanning all new loan and credit documents. That process takes an hour or two a day, the rest of the day is devoted to backfire conversion," says Jonelle Lodermeier, credit and loan administration manager at Zapp. She is confident that the entire backfire conversion will be finished by the end of the first quarter of 1997. "Until then we have to deal with a split system with some records still sitting in their manila folders and others in the imaging system."

The initial plan was to have a single employee scan and index all documents in order to maintain a consistent approach to the entire archival process. But the indexing process proved to require such close concentration that Zapp eventually divided the scanning and indexing workload among five people, each working a shift no longer than two hours in duration.

The credit and loan department captures an average of 2000 documents a day, averaging 50 to 100 pages a document. They bought a Bell & Howell 6338 Copiscan duplex scanner. "We decided early on that the scanner should never be a bottleneck," says Renee Tamm, information services manager. "It more than keeps up with the workload."

Macrofiche provides some shortcuts to speed up indexing those images. "Every night, our mainframe automatically downloads an ASCII file that includes the specifics on all the current customers and loans and feeds that information into a MacroSoft program called SmartLink," says Tamm. Employees scan documents and key in the index information. SmartLink verifies the keyed in information and pulls the other two indexes from the database, sending it to MacroImage for storage.

Jonelle Lodermeier reports they are very pleased with the new system. Scanned documents are held in storage for sixty days, providing Zapp with time to do quality checks and make adequate backups. Originals are then shredded Zapp's first routine banking audit using the new imaging system turned out to be a breeze. It was the first time that the bank examiners reviewed an imaging archive. It took a little training, a little hand holding, but in the end the examiners were impressed. The system passed with flying colors.

Out With the Old, in With the New

The limited number of concurrent users the system could handle used to frustrate Renee Tamm. But with the newest version of Macrosoft, the 40 person cap was removed. "We could not be happier," says Tamm.

The problem was not a function of the software, points out Ken Creech, MacroSoft's vice president of customer and marketing services, but rather the redirector that older optical storage systems worked with. "Simply put, with old redirector technology, the more optical drives you used, the smaller the number of concurrent users that could log onto those systems."

Moving the imaging system off the main file server and onto its own NT server removed the limitation imposed by the optical disk redirectors. MacroSoft is confident that a single copy of the new server-based MacroImage Plus! software, running on its own dedicated NT server, can comfortably handle 500 busy users. If more users are needed, just add a second server. But, notes Creech, "that's only one of many useful advanced new capabilities this new generation of client/server based software offers. "

The biggest advantage of this new software is that it allows the bank to separate the indexing data from the images," says Creeh. "This is not a requirement - we do allow you keep the index and the image together where it is appropriate. For example, a combined index/file system makes sense for making backups or when cutting image CDs to send out to your customers. However, the vast majority of applications benefit from separating the two and storing them in different locations."

Consider the typical scenario found in most banks today. All but the smallest banks today have at least one or two branch offices. Zapp's approach to imaging is the typical one we find today - all documents to be imaged are sent to a centralized scanning and storage center, usually at the home office. Even in this scenario, it makes sense to separate image and index since the index data is relatively small and can easily be kept on the hard drive. Recently-scanned images can also be kept on hard drive and then later spooled to optical as the hard drive fills up. Because the index is small and always maintained on the hard drive, searches are always fast and the index provides universal access to images wherever they are stored. The newly scanned documents, which are the images most likely to be requested, also reside on the hard drive and can be accessed quickly from the main office. Older documents tend to be stored on slower optical drives and take a bit longer to call up."

The problem with this approach is that it does not take into account the lag time it takes to transmit large image files across the relatively narrow bandwidth of the wide area network. "Why not capture and keep documents at the branch offices where they are most likely to be needed?" asks Creech. In this scenario, all indexing information is sent to the main server which keeps track of where everything is stored. Query the main server and chances are you will be referred back to your local network where it can be quickly downloaded.

If another branch office requests an image file, it is sent. But on average, very few large image files will pass back and forth, keeping the data communications pipeline open during even the busiest time of the day. No doubt even larger banks whose communications lines are already taxed are seriously looking at this sort of approach. Zapp's communication bandwidth, however, is still adequate for its current needs. It doesn't yet need to worry about changing their imaging infrastructure.

The Case for Synergy

MacroSoft offers another new piece of software that is also in the early stage of its acceptance. As we said earlier, there are three separate imaging systems implemented at Zapp bank, COLD and imaging systems by MacroSoft and a check imaging system from Wausau Financial Systems of Mosinee, WI. Right now they all work independently of each other - a situation that the bank is comfortable with since different sorts of people access the different systems.


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