JPMorgan Chase Bank Gains Competitive Advantage-And Positions Itself for the Future-with VICOR Image Lockbox Platform and Patented Archive and Delivery Product Line

Today, Apr 2004 by Victor, Ronald J

Cash flow is the most closely watched indicator of any company's financial health. The key to successfully managing cash flow is receiving accurate and timely information on a company's financial position. Today, backed by a solution that combines the traditional benefits of image lockbox (reduced processing and mail float) with state-of-the-art archive and CD-ROM and Internet delivery capability, corporate customers of JPMorgan Chase have the ability to easily access the receivables information they need for effective cash management.

JPMorgan uses the Receivables Information Delivery System (RIDS) lockbox information-reporting platform from VIGOR, Inc. in concert with the bank's leading-edge archive product for the retention of lockbox images. Images are stored and can be retrieved by lockbox clients for up to 10 years, adding a higher degree of convenience for document-management, safety and disaster recovery unparalleled in the marketplace. Our patented on-line browser, CD-ROM, or direct Internet transmission products can be used in conjunction with the national lockbox network platform to provide further market differentiation.

After an exhaustive review, JPMorgan chose VIGOR for its national lockbox platform based on the vendor's track record in delivering customized remittance processing solutions, and the superior feature functionality of RIDS, notably the platform's ability to format and customize transmissions, perform data-entry from images, capture dual-sided images, and use payee recognition, Robot Keying, and speech recognition to reduce manual keying. Additionally, inherent to the VIGOR platform are subsystems to automatically schedule and transmit customer files and faxes, and generate CD-ROMs. VIGOR also was willing to commit to the very aggressive installation schedule the bank set to "meet and beat" its lockbox competitors.

Ahead of the Industry

The combined solution provides JPMorgan lockbox customers with a comprehensive data repository and view of their receivables activity. Today, this couldn't be more important. With the number of banks offering image lockbox products steadily on the rise, more and more corporations are making use of the Internet in conjunction with their treasury and banking services to accelerate accounts receivables processing and reduce the costs associated with payment exceptions.

Some 24 percent of large corporations responding to a recent Phoenix-Hecht survey said they retrieve bank information via the Internet. One-half of respondents report plans to do so. Phoenix-Hecht found that the availability of Internet access to the large corporate treasury units surveyed is currently at 95 percent. Meanwhile, the number of banks providing images over the Internet increased dramatically from 5 percent in 1999 to 26 percent in 2000, according to the 17th Annual Gash Management Survey from Ernst & Young. The majority of banks not offering image delivery via the Internet indicated plans to do so soon, Ernst & Young found.

The industry's push to launch Internet initiatives comes as no surprise to JPMorgan, an early innovator in this area. Our patented archive service and Web delivery solution have provided strong market differentiation (important in our ever-competitive marketplace), new fee income, and another catalyst tor clients to move from paper processing to imaging. What's more, the combination of VIGOR'S image lockbox platform and our Web delivery solution has reduced operational expenses by eliminating the direct expense of manual re-association of check images to invoice copies, as well as the costs from re-association errors. And, the bank's internal research expenses are reduced as our Client Services Investigation unit now has the ability to easily retrieve images rather than requesting originals from the processing site.

Our image-enabled lockbox solution also positions us to capitalize on the recent Check 21 legislation by capturing check images and data at the earliest point in the process. Plus, our customers already are accustomed to operating in an image-only environment, a hurdle that Electronic Check Presentment developers had struggled to clear prior to passage of the check legislation. These capabilities provide JPMorgan with a clear advantage over its competitors as the industry migrates away from original items and into the check image processing environment.

Feature-Rich Design Is Key

The key to these benefits has been our ability to deliver a feature-rich, user-friendly solution, and to communicate a clear value proposition to our clients. With its 10 year archive of images capability (unique in the market), our solution eliminates the need for corporate clients to maintain any paper or CD-ROMs on-site, provides back-up disaster recovery, offers desktop access to images dating as far back as 10 years, and streamlines research by allowing access multiple times to the same image. Further, corporate clients can be notified via e-mail of a one-time or recurring payment in order to post items and release shipment of goods on credit-hold. JPMorgan's electronic note capability allows the user to append a message to any Image and search for any text entered into the message.