Capture Savings By Improving Image Quality

As one of the largest mortgage originators in the United States, Chase Manhattan Mortgage processes thousands of loans a day. Unfortunately, the 60,000 to 75,000 documents a day processed in its scanning facilities in Monroe, LA and Columbus, OH weren't enough to keep up with the needs of the loan default divisions and customer service operation. A major impediment to increasing throughput was the error rates of the existing capture solution, a combination of homegrown and packaged applications using ICR (intelligent character recognition) and bar code stickers to capture indexing information. "The prior solution used ICR for automated indexing, but its lack of image cleanup features led to error rates of almost 50 percent, which required costly manual intervention. Skewed documents were the biggest issue," said Rick Duff, manager of software development and imaging at Chase Manhattan Mortgage. "Our bar codes were also obscuring important information. It was obvious that changes had to be made because we were scanning 100,000 new mortgage documents per day and growing fast."

Duff led the search for a capture strategy that would increase throughput and decrease the number of errors, and selected Ascent Capture from Kofax Image Products, Inc. (Irvine, CA). Over a three-month period, Chase developed and implemented a solution that replaced the bar code stickers with bar-coded cover sheets. In addition to document capture, Ascent Capture provides deskew and other image enhancements. These capabilities are complemented with Kofax Adrenaline scanner controllers to support image processing acceleration, additional image enhancement, and most importantly bar code recognition.

Now when mortgage documents come into the facility, they are checked for completeness, and operators enter the indexing information. A single customer file can include not just the application but also supporting documents, appraisals, tax forms, and private mortgage insurance. A custom application is used to generate a loan number, which is encoded into the bar code. The bar-coded cover sheet is inserted into the batch of documents prior to scanning, and the documents are associated with the appropriate indexing information upon scanning.

Ascent Capture's integrated database validation module supports integration with most leading back end systems in native format. Chase is using an On Demand system from IBM. Using Ascent Capture has eliminated the need to write custom release scripts for back end repositories.

Expand Capture Beyond Paper
Because Ascent Capture can accommodate other electronic documents that didn't originate as paper, Chase has been able to automate the capture of more data. Using Ascent's Import Controller module, Chase is capturing mainframe print streams, which are converted to TIFF images. Index values are captured using OCR (optical character recognition). As a result, CSRs (customer service representatives) can pull up correspondence sent to the customer and view it exactly as it looks to the customer. These images can also be incorporated into paper-based workflows.

Ascent Capture's ability to provide a single interface for all document types has also helped automate the processing of loans acquired from other companies. Duff estimates that Chase originates about 50% of the mortgages processed. The other half are received from between 30 and 50 other sources. The associated documents are often received as images embedded within an XML (extensible markup language) stream. Ascent Capture automatically imports these documents into the system, eliminating manual input and the potential for associated errors. The application can then assign loan numbers to these documents. Regardless of where the documents originate, Ascent Capture applies the same indexing and validation to all of them.

Increased Throughput At Lower Costs
Ease of use is a key factor in the success of the capture solution. Duff estimates that employees required only a couple of hours of training on the new capture system. "When volumes get high, we often use temporary help," he adds. "The interface is simple enough that we can get these employees up and running quickly." With the new system, about 50 employees at the Monroe facility prep, scan, and process 100,000 pages a day using two Eastman Kodak 923 scanners, three Kodak 9520 scanners, and five Fujitsu M4097D scanners. All of the scanners are equipped with Adrenaline controllers. Operations in Louisiana require ten Ascent Capture Scan Stations, four Ascent Capture Recognition Stations, two Ascent Capture Validation Stations, and twenty-three Ascent Capture Release Stations.

Approximately 35,000 additional pages per day are processed at the Columbus location using two Böwe Bell & Howell 8125 scanners and two M4097Ds with Adrenaline controllers. The 8125s also have hardware VRS (Virtual ReScan), an image quality enhancement solution from Kofax. Duff says this feature has been particularly effective in processing documents with handwritten data or pictures and forms printed on colored paper. The ten employees at this facility use one Ascent Recognition Station, three Ascent Capture Validation Stations, and one Ascent Capture Release Station.

Following implementation of the new system, the error rate dropped from almost 50% to less than 1%. In fact, Duff says has calculated the accuracy rate at 99.28%, eliminating labor-intensive rescanning and manual data entry processes. "We thought that inserting the paper would cost us time, but it actually saved time," says Duff. "When we had the stickers, we not only had to create them, but we also had to choose where to place them that would least interfere with the text."

Chase realized payback for the new capture system in less than a year. "The cost improvements are significant. Chase has lowered the company's software and hardware expenses and reduced scanning charges from 10 cents to 6 cents per page," says Duff. "The company also reduced its staffing requirements due to the system's ease of use. Chase Manhattan Mortgage staff can now prep documents for scanning more quickly and spend less time on manual indexing. As a result, Chase has been able to scan 40 percent more documents using the same equipment." Much of the scanning hardware was already in place at the scanning facilities. About 40% of overall project costs was software, and Chase oversaw most of the implementation services.

Though scanning volumes have reached about 2.5 million pages per month, Duff estimates that this accounts for only about 50 to 60% of all loan documents. Because Ascent Capture can accommodate so many document types, Duff is evaluating ways to eliminate more paper and paper-based workflows as well as integrate other data sources. He is currently considering a strategy for incorporating fax capture.