Bank Applications Fuel Optical Storage Market
Arend, Mark, ABA Banking Journal
If there's a market in used computer Output microfiche (COM) equipment, now is the time to jump in. Banks of all sizes are replacing yesterday's statement- and report-storage devices with faster and cheaper optical disk storage systems.
There most certainly is a market in optical disk systems, as most major hardware vendors discovered a few years ago. Nolan, Norton & Co., an information technology consulting and research organization based in Lexington, Mass., predicts that by 1992 the global market for hardware that supports imaging applications will reach $4.5 billion per year. Banks alone account for 9% of that figure, estimates Thornton May, the finn's director of imaging research. Optical disk systems account for roughly 20% of the imaging market, says May, which he admits is conservative, but banks are an especially receptive target given the large number of customers they service and the amount of paper required to maintain an account.
Proven technology. Bank managers tend to be wary of new technologies that seem to promise too much. But it's hard not to take a closer look at a technology that is clearly proving itself in terms of faster customer service, more efficient use of personnel, and dramatic operating expense reduction. In many cases, bank managers themselves are directing their operations staffs to investigate and implement optical disk-based systems, and the sooner the better.
Optical storage technology is just part of a larger scenario, called imaging technology, but an important part to banks nonetheless. Imaging systems scan and store images of such documents as checks and bank statements, making check processing and other labor-intensive applications more efficient. Image-based data are recorded onto optical disks, which resemble large compact disks and are typically stored in so-called "jukeboxes," or hardware units that house and retrieve the disks for use.
The first benefit of optical storage systems to banks investigating them is the cost of implementing one compared to maintaining existing microfiche systems. Aquidneck Systems International, N. Kingstown, R.I., is currently in discussions with a $32 billion-assets Massachusetts bank, which furnished the vendor with figures reflecting its annual microfiche expenses.
Operating expenses. "That bank's 1991 projected supply cost is about $449,000 for fiche, master film, and duplicate film only," says George Steele, Aquidneck's director of marketing. The bank generates 20 million print pages on fiche, including 73,000 fiche masters per month and 334,000 fiche duplicates per month. "The bank also spends about $265,000 on printer paper per year, making the total $714,000 for 1991," notes Steele. "We probably could put a system on their floor for about $300,000, and that would take care of their needs for about four years, based on these numbers."
Aquidneck is a value-added reseller of Kodak 6800 optical disk libraries and markets its own high-speed controller to Kodak and other system integrators as well as directly to end users. The controller, which manages the robotics of the jukebox, essentially is a computer in its own right, according to Steele. It retrieves data from the appropriate disk on command from the host computer, stores the data until needed by the mainframe, and replaces the disk in its correct slot.
"We've recently introduced high-speed data compression to our controller," adds Steele, "and as a result, we can pack three times as much data on a jukebox and have increased the throughput by a factor of three. Suddenly we're about 50 times faster than a microfiche machine."
Optical data storage. Not all optical disk-based storage systems store images of documents, as "imaging technology" implies. LaserAccess Corp., Bothell, Wash., for example, markets an optical data storage system, the LA 1500 Optical Data System, which stores numerical and textual information in the same way a floppy disk or magnetic tape does. …