ATLANTA, Oct. 11, 2004 (PRIMEZONE) -- John H. Harland Company (NYSE:JH) is in the final stages of developing a comprehensive solution for the prevention of the most difficult-to-catch type of check fraud - the forgery of the maker's signature, the company announced today.
This self-authenticating solution stems from Harland's unique position as the leader in digital check printing technology and financial institution software including item processing, document image management and branch automation. It has completed rigorous proof-of-concept testing and is preparing to enter the pilot stage. Harland's extensive pilot program is expected to culminate in general availability of the solution in the second half of 2005.
The comprehensive solution employs sophisticated image processing, data encoding and encryption, digital printing and statistical validation software to allow financial institutions and merchants to validate the authenticity of the maker's signature and the physical check document. The true value of the solution is that the check can be securely authenticated at any time, at any place, with no online connection required to the paying financial institution. The check becomes self-authenticating with the combination of the digitally printed security feature and the software.
"We believe that our approach to check fraud prevention is the first and only solution capable of catching forged checks at any point at which the item is presented or processed," said John Heald, president of Harland Printed Products. "This innovation has the potential to dramatically limit fraud losses to merchants, financial institutions and most importantly, consumers, all without requiring any change in consumer behavior."
Financial institutions, merchants and consumers lose billions of dollars every year as a result of lost, stolen or counterfeit checks cashed or presented by forgers. In most cases, the fraudulent activity is not realized until the consumer's funds are depleted, or until the unauthorized items are noticed in their monthly statement; in either case, too late to prevent the fraud. The financial institution is left with the time-consuming chore of investigating the fraud, potentially covering the loss and trying to reassure and retain their customer.
Historically, the validity of the account holder's signature on the check has been very challenging to verify for the vast majority of checks written. There are two reasons for this. First, due to the sheer volume of items processed, the financial institution upon which a check is drawn typically has not had the resources or capacity to compare the signature on each item cleared to the valid signature on file for the consumer. Second, only the consumer's institution knows what their valid signature looks like. Therefore, if the check is presented, deposited or cashed at any other merchant or institution, there has been no way to validate the authenticity of the signature.
In developing this solution, Harland has worked closely with its strategic partner, Mitek Systems, Inc., an acknowledged leader in check imaging, character recognition and signature validation technology. Earlier this year, Harland acquired selected assets associated with Mitek's item processing and document imaging solutions CheckQuest(r) and CaptureQuest(r).
With the advent of Check 21, the number of checks that are converted to images is expected to increase exponentially - with significant growth expected at the point of presentment. Financial institutions and merchants are optimistic about the economies this promises in improved check clearing efficiency and funds availability. The added benefit of the shift to more widespread image capture, earlier in the process, is the opportunity to apply technology such as Harland's to the problem of check fraud at the point in time the item is presented. Because Harland's laser printed digital security feature survives the imaging process, the item can be validated at any point downstream in the clearing process, whether or not the item was validated at the time it was accepted.
"Harland's goal is to help our financial institution clients minimize fraud on behalf of their customers," said Timothy C. Tuff, chairman and chief executive officer of Harland. "This will result in significant competitive advantage for our clients and peace of mind for their customers."
About Mitek Systems
Mitek Systems is a premier provider of check fraud protection solutions and check imaging software for the banking industry, and an established global supplier of embedded software recognition engines. Mitek develops recognition technology using advanced neural networking techniques and deploys this expertise in fraud prevention, check, financial document and forms processing applications. These applications automatically process over 8 billion documents per year for a variety of OEMs, reseller partners and end users. For more information about Mitek Systems, contact the company at 14145 Danielson Street, Suite B, Poway, CA 92064; 858-513-4600 or visit http://www.miteksystems.com.
About Harland
Atlanta-based John H. Harland Company (NYSE:JH) (www.harland.net) is listed on the New York Stock Exchange under the symbol "JH." Harland is a leading provider of software and printed products to the financial institution market. Harland's software solutions include, deposit & loan origination, platform, teller, call-center, mortgage, business intelligence, core systems, and customer relationship management systems. Harland's printed products offerings include checks, direct marketing and financial forms. Scantron Corporation (www.scantron.com), a wholly owned subsidiary, is a leading provider of software services and systems for the collection, management and interpretation of data to the financial, commercial and educational markets.
RISK FACTORS AND CAUTIONARY STATEMENTS
This press release contains statements, which may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of John H. Harland Company and members of its management, as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties and that the actual results may differ materially from those contemplated by such forward-looking statements. Such differences could be material and adverse.
Many variables will impact the ability to achieve sales levels, improve service quality, achieve production efficiencies and reduce expenses in Printed Products. These include, but are not limited to, the continuing upgrade of our customer care infrastructure and systems used in the Company's manufacturing, sales, marketing, customer service and call center operations, and the ongoing plant consolidation and relocation program.
Several factors outside the Company's control could negatively impact check revenues. These include the continuing expansion of alternative payment systems such as credit cards, debit cards and other forms of electronic commerce or online payment systems. Check revenues may continue to be adversely affected by continued consolidation of financial institutions, competitive check pricing including up-front contract incentive payments, and the impact of governmental laws and regulations. There can be no assurances that the Company will not lose additional customers or that any such loss could be offset by the addition of new customers.
While the Company believes growth opportunities exist in the Software and Services segment, there can be no assurances that the Company will achieve its revenue or earnings growth targets. The Company believes there are many risk factors inherent in its software business, including but not limited to the retention of employee talent and customers. Also, variables exist in the development of new software products, including the timing and costs of the development effort, product performance, functionality, product acceptance, competition, the Company's ability to integrate acquired companies, and general changes in economic conditions or U.S. financial markets.
Several factors outside of the Company's control could affect results in the Scantron segment. These include the rate of adoption of new electronic data collection, testing and assessment methods, which could negatively impact current forms, scanner sales and related service revenue. The Company continues to develop products and services that it believes offer state-of-the-art electronic data collection, testing and assessment solutions. However, variables exist in the development of new testing methods and technologies, including the timing and costs of the development effort, product performance, functionality, market acceptance, adoption rates, competition, and the funding of education at the federal, state and local level, all of which could have an impact on the Company's business.
Reference should be made to the Risk Factors and Cautionary Statements section of Harland's Form 10-K and Form 10-Q for additional information. Harland undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.