Banking Case Study

Suffolk County National Bank

Three different imaging applications were integrated with the bank's core business system and across 27 branches. The system designed and delivered by R2K provides improved security, tighter system administration control, and immediate access to documents by multiple users. The solution provides the capability to transfer electronic check images to banks and clearinghouses and helps the bank meet regulatory requirements.

The Challenge

Suffolk County National Bank (SCNB) is a $1 billion full-service, federally chartered commercial bank in New York. SCNB needed a better way to manage paper documents generated in three areas: 1) teller transactions; 2) loan processing; and 3) accounts payable. Microfilming checks was becoming costly. The paper documents in loans and accounts payable were cumbersome to manage, susceptible to loss, could only be used by one person at a time, and took storage space that could be better utilized. Retrieval of documents for internal use and customer service was slow, and in the case of microfilmed checks, could take as long as 7-10 days. There was a need for a more solid backup plan if the paper was lost or destroyed. The bank recognized that they had an urgent document management problem, but did not have in-house expertise in document management technologies.

The Solution

Consulting and an implementation plan for document management technologies by R2K

Phase 1

Banking The bank selected R2K to conduct a study of SCNB's current handling and management of paper throughout all bank operations, including teller transactions, installment loans, mortgage loans, commercial loans, accounting, and administration. They engaged R2K for this analysis because of R2K's reputation for deep and broad experience in document imaging technologies.

R2K conducted a study of existing business processes with the goal of understanding the net changes to these processes if the bank were to implement a document imaging system. R2K also helped the bank assess the return on investment with imaging technology. R2K provided a detailed analysis of existing operations, estimating the cost and feasibility for implementing imaging technology in each of the bank's departments. R2K delivered a report that outlined a plan for implementing imaging technology and improving current business processes, demonstrating a potential return on investment of less than two years.

Phase 2

R2K configured, integrated, and deployed an enterprise-wide document imaging system for SCNB. The system included microfilm replacement for checks captured at 27 branch offices, and loan and Comptroller's office documents captured at the bank's headquarters. R2K offered a variety of hardware/software options. SCNB selected a new vendor for check processing, extended their existing vendor for COLD technology to support imaging, implemented Kofax Ascent for image capture, and deployed Kodak i260 scanners. A critical requirement was integration of electronic documents with SCNB's core processing systems. This would allow automated look-ups and population of fields based on index information as well as viewing of electronic images compared with keying data from paper.

Summary of Solution Benefits

Benefits Across All Applications

On-demand access to documents in headquarters and all 27 branches without regard to the specific branch in which the document or check was originally processed.
Improved customer service with the ability to answer questions within the same phone call.
Decrease in floor space for file cabinets giving SCNB the option to redeploy space.
Multiple authorized users have concurrent access, avoiding costly and time consuming document duplication.
More secure environment with access controlled through profiles created by an authorized system administrator.
A more reliable disaster recovery process with duplicate optical disks stored offsite.
Improved ability to meet regulatory requirements by limiting access to private information.

Check Capture Benefits

All checks are now scanned in branches with centralized optical archiving. Volumes average 20-50K per day, increasing to 70K during peak periods.
Image quality and reliability is far superior to microfilm.
Image capture of all checks saves time to locate and develop specific microfilm reel for selected checks upon request.
Preparation for state, federal, and internal auditing is faster and more efficient.
System meets regulatory requirement for a consistent, reliable method to capture checks.
System supports "Check 21" Federal legislation, giving SCNB the option to transmit electronic files for check clearing with local clearinghouses and/or the Federal Reserve Bank. This will reduce costs, provide improved clearing times as checks clear faster and reduce the risk of physically transporting the documents.

Loan Processing Benefits

System supports all loan business including commercial, automobile, and consumer mortgage lending.
Users can build an electronic account folder over time, adding supporting documents such as letters and insurance documents.
Document image viewing with access to core line of business data is integrated.
Documents are available to all lenders, including remote lenders, eliminating need to make copies.
Integration with SCNB's core system streamlines data entry process. For example, entering an account number validates transaction and returns data to fields such as name and address to expedite data entry.

Accounts Payable Benefits

All invoices across the entire bank are image archived and available.
Eliminated need to store and retrieve paperwork in file cabinets or boxes.
Files can be built over time, e.g., adding images of check payments to electronic file with original invoice and transaction data.
Storage space is being redeployed for other purposes.

Future Plans at SCNB

This implementation serves the business goals for the three applications deployed and provides an enterprise foundation to support additional bank requirements. SCNB is exploring two other areas: 1) The Trust department to support both back file conversion of documents as well as administering new accounts going forward; and 2) corporate and legal records management related to the holding company shareholder information, and other corporate documents.