With Its Fiserv Deal, Viewpointe Sees a Big Year for Image Sharing

After a year in which networks that traffic electronic check images racked up big volume gains, the concept of sharing?rather than exchanging?images took center stage this week with the news that Fiserv Inc. will make its proprietary image archive part of the massive storehouse of images maintained by Viewpointe Archive Services LLC. The move by Fiserv, which processes checks for some 1,600 client institutions, represents a major coup for Viewpointe and for image sharing at a time when check processing is taking significant strides toward full electronification. “The power of image sharing is starting to be recognized,” says Diane Scott, chief sales, marketing, and product officer for Viewpointe. “We'll see the market move in '08.” Viewpointe, which keeps offices in New York City and two other cities and is owned by Bank of America Corp., IBM Corp., JPMorgan Chase & Co., SunTrust Corp., and Wells Fargo Co., operates what is says is the largest image archive in the world, with 112.7 billion checks on file. It serves not only its five owner banks but also 14 other financial institutions and processors, offering both an image sharing and image exchange product. Its model of image sharing, in which banks trade check data but access the archive when they need to see the image itself, had been overshadowed in recent months by the progress of image-exchange networks, which traffic full image files between collecting and paying banks. Monthly image-exchange volume reached 1.07 billion items in October, up 174% over October 2006, according to the Electronic Check Clearing House Organization, Dallas. But now the use of Viewpointe's archive and associated sharing product is picking up steam as banks respond to cost pressures in paper check processing, Scott says. She says image sharing is more cost-effective than image exchange, since it doesn't require the transmission of bulky check files, but she adds the actual cost advantage is something the company is still trying to quantify. A further cost advantage, she notes, lies in the fact that image sharing allows paying banks to clear check images without the need for collecting banks to produce a substitute check, an effect that grows as more community banks?which are typically paying banks?participate in the archive. This is one expected benefit of Fiserv's participation, since the Milwaukee-based processor represents a significant share of paying banks. Viewpointe's big-bank owners, meanwhile, are major banks of first deposit. With image exchange, banks that aren't equipped to receive check images must clear substitute checks, which are paper printouts of the images. The need to generate this paper negates some of the cost advantage of image exchange. At the same time, Fiserv's clients will see benefits as collecting banks by sharing images with Viewpointe's client base and with each other. “We're already operating in a shared-archive environment, but we didn't have the ability to do share exchange [without a bilateral agreement between banks],” says Steve Ward, executive vice president of the financial institutions group for Fiserv. “Viewpointe gives us the ability to do that.” This makes it possible, he says, to drive down costs for Fiserv clients. “The overall driver [to participate in Viewpointe's archive] is further enhancing the electronification of the check business,” he says. Image sharing, he says, is a way to attack the so-called last-mile problem confronting image exchange?the inability of some paying banks to receive images. The felt need to build and maintain proprietary image archives has long held banks back from participating in shared storehouses like that of Viewpointe. But now, Scott says, banks and processors are starting to let go of the idea that they must maintain proprietary archives of their own, given that the archive function itself is a commodity business dealing with a form of payment in which volume is steadily falling. “The move by Fiserv sends a strong message to the market,” she says. “Institutions must ask themselves why they would invest in a declining market.” Ward says it makes more sense for the Milwaukee-based processor to outsource the archive function than to continue running the servers that house its 8.5 billion images. “The storage of images in archives is very much a commodity,” he says. “What adds value is what you do with that image.” Fiserv, he notes, can continue to offer value-added services such as CDs and DVDs of check images and fraud applications. Neither Scott nor Ward will say when image sharing will become operational between Fiserv and Viewpointe. Technical teams are sitting down now to work out the details. “Both organizations are keen to move quickly,” says Scott. Fiserv already has a link to Viewpointe to use its Pointe-to-Pointe system, which is an image-exchange network.