Banking & Financial Services White Paper CD technology complements corporate banking By Dorothy O'Donnell, Marketing Communications Manager Data/Ware Development A few years ago, most corporate bankers didn't consider Compact Disc (CD) a safe, cost-effective alternative to data distribution by Computer Output Microfiche (COM) or paper. Today, however, CD is a hit among leading cash management providers. Why the sudden change of heart? There are several reasons. First, the prices of CD- ROM drives have dropped dramatically in the past couple of years. And industry experts predict that in less than two years, all PCs sold will have CD-ROM drives. The advent of CD-Recordable (CD-R) technology has also played a key role in the media's rising popularity. Previously, producing unique CDs required expensive pressing runs, so using the media was only feasible for businesses producing duplicate CDs in high-volumes. But CD-R opened the door to new possibilities for distributing data and images on CD by making it economically practical to produce one-off CDs containing up-to-the-minute data. As an imaging storage media, CD-R offers banks and their customers the security they demand. Like Write-Once-Read-Many (WORM) discs, data that's written to a CD-R can't be altered or erased. A single CD-R can store 600 MB of data. That's the equivalent of 444 microfiche, 100,000 paper pages, or the front and back images of more than 20,000 checks. Helping corporate clients escape paper avalanche Reducing manual labor and back office costs are two important benefits of distributing data and check images on CD. But they're just the tip of the iceberg for savvy cash management providers like Bank of Boston (Boston) and Mellon Bank (Pittsburgh, PA). What really sold them on the technology is its potential as a marketing tool. These banks are using CD to develop new services designed to revolutionize the way corporate customers reconcile their accounts. As a result, they gain an edge in today's highly competitive banking industry. Normally, a bank's corporate clients receive thousands of monthly statements, reports, faxes, photocopies, and checks on paper or microfilm. Buried within this avalanche of information are the check images and other documents clients need to settle their accounts. Finding a specific check usually requires several manual steps. Like the banks that serve them, corporate clients want to provide fast, efficient service to their customers. Paper and microfilm can make it difficult, if not impossible, to achieve this goal. Producing CDs in-house Currently, more than one-third of the nation's leading banks, including Mellon Bank and Bank of Boston, are producing CDs in-house for distribution to corporate clients by combining technology from IBM and Data/Ware Development (San Diego, CA). IBM's High Performance Transaction System (HPTS) for check imaging resides on a customer's mainframe and takes images that are captured at the rate of over 2,000 items per minute by an IBM 3890 reader/sorter. The images are then sent to magnetic DASD for sorting and temporary storage. The HPTS check images are downloaded directly to Data/Ware's mainframe-based Enterprise Authoring System (EAS), a high-speed, automated CD creation system. The EAS consists of a control unit, host-based authoring software that indexes the data and then masters it to conform to the ISO 9660 standard for recording CDs, and a module that can house from one to four automated CD-R writers. Each writer is capable of churning out a CD in less than 30 minutes. PC and LAN-based CD-authoring systems use only one writer and lack the processing power of a mainframe, so they can't match the capacity of a system like the EAS when it comes to producing multiple CDs in a single overnight shift. Retrieving check images The next business day, the CDs are ready to deliver to corporate clients. End users can access CDs at their desktop or across a network. Along with check images, each CD also includes data, indices, forms and a viewer. To view data or check images, end users simply insert a CD into a standard CD-ROM drive in any PC or workstation running Windows. Search and retrieval software allows them to quickly identify search criteria, scan a cumulative index, and pull up a check image. They also can cut and paste data or check images into word processing or other applications. With information at their fingertips, end users can respond faster to callers requesting paid-check information. In fact, telephone inquiries that used to take minutes, hours or even days to resolve can often be settled while a payee or customer is still on the line. Because faster, more comprehensive research on questionable payment items is possible, CD also enables clients to reduce check fraud. Last but not least, corporate clients receiving statement information on CD can expect reductions in the costs associated with paper-intensive back room processes. The cost and storage space required for film/fiche equipment traditionally used to store check information will also be reduced. With CD, everyone wins. Banks can provide enhanced service to corporate clients in paper intensive industries. The clients, in turn, can pass on improved service to their customers or payees. And because corporate clients are eager to reap the benefits of CD technology, they don't mind paying a little extra for the service, so banks can boost revenues and gain a competitive advantage. Dorothy O'Donnell is marketing communications manager for Data/Ware Development, Inc., a manufacturer of high-speed, high-volume CD-authoring systems and optical storage systems based in San Diego, California. Tel: 800-335-4444 or (619) 453-7660 Fax: (619) 453-2794
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