As adoption of Check 21 grows nearer, the more apparent areas of industry impact— accelerated adoption of truncation at the bank of first deposit, reduced processing infrastructure and collection costs, the need for new operational workflows and processes— are coming fairly well into focus. At Carreker Corporation, we recently asked a group of experts— bankers, bank association leaders, and our own experts— to look past the more conspicuous impacts of Check 21 and to anticipate matters that should be receiving more attention now. They chose these three:
Managing the Customer Impact
Many banks appear to be underestimating the customer impact of Check 21— both the positive and negative potential. When substitute checks begin showing up in customer statements, and when the clearing and settlement time on checks suddenly shortens, there will be questions, confusion, and repercussions.
Check 21 is a fundamental and largescale change that intimately touches checking customers’ precious checks. Change of that magnitude
requires a serious allocation of time and resources designed to educate customers and employees well beyond a mass customer mailing
and a perfunctory employee training session.
There is a payoff for banks that really scrutinize the potential customer changes. Customers value their paper checks, not because they are paper but because they are repositories of crucial information. That can translate to a variety of product offerings for both the consumer and commercial customers. Understanding that value in advance can help banks deliver the Check 21 information as potential value for customers, as well as offering win-win alternatives.
Managing Image Quality
While major strides have been made in check imaging technologies in recent years, we have yet to deal with a world in which digital images are the primary settlement instrument and legal record for check transactions. It is likely that early experiences with image quality will be a key factor in determining how aggressively the industry adopts image exchange.
When an image file is received, does it in fact contain an image?
Is the image readable?
Is it the correct image?
Has the image been tampered with?
Does the payment information on the image match the payment information accompanying the image?
These are critical questions that will have great significance in terms of operational and payments risk, customer satisfaction, and operational efficiency.
Leveraging the New Fraud Mitigation Opportunity
The unfolding of image in response to Check 21 will enable banks to detect fraud earlier in the process, to share information efficiently both within the bank and across the industry, and to turn what has been largely a cost (fraud detection) into a revenue-generating mechanism. This is a unique opportunity for banks to add value and differentiate from their nonbank competitors.
Hans Myklebust is Managing Director of Carreker’s Global Payments Consulting division, which offers an on-site Check 21 Readiness Program for banks.
Darrell Royal is senior vice president, product management of Carreker’s Global Payments Technology division, which offers software for image exchange, image quality and image-enabled back office systems.
BankersOnline is a free service made possible by the generous support of our
advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all
banking professionals. Support our advertisers and sponsors by clicking
through to learn more about their products and services.
Print Friendly!
Email This Article!
Discuss NOW!
