Keycorp has joined the wave of banks fighting check fraud by enhancing positive pay management services.
Positive pay is a service in which corporate customers send information on checks they have written to their cash managers to help the banks identify bogus items.
The nation's 12th-largest banking company, with more than $63 billion of assets, Keycorp recently began offering three special positive pay features to commercial customers with controlled disbursement and full reconciliation accounts.
The new features include a personal computer-based dial-up system that offers on-line account information, a new mismatch reporting function on same-day checks, and a system to detect misread or incorrectly encoded items from the Federal Reserve or presenting banks.
"It is very easy to print and pass a bogus check that looks and feels legitimate," said Bruce Keenen, senior vice president and manager of commercial product management. "We have taken steps to use technology to fight fraud before the items post to accounts, in an attempt to catch the items as soon as they come into the bank."
In an average month, the bank processes more than 95,000 items, with an estimated dollar value of $358 million. Mr. Keenen said Keycorp has detected 26 bad items through the new positive-pay programs during the last eight months.
Before the new service offerings, the bank tracked fraudulent items through the branches rather than through a central office. The new centralized system makes the effect of fraud prevention efforts easier to monitor, he said.
The new system, known as Access, gives customers the ability to connect to Keycorp's mainframe and electronically approve or reject questionable items that are presented to the bank for payment from the corporate customer's account.
To date, Keycorp has six customers using the new products. It expects nine others on board by the end of March.
The bank also plans to roll out an imaging system that will show customers digitized, on-line pictures of questionable items.
"With the growth in check fraud in this country, parties on both sides need to do whatever they can to catch the items before they are paid, we believe," said Mr. Keenen. "By offering these new services, we can work to catch the items before the checks are posted to the customer's accounts and, in turn, attack the fraud as the checks come into the bank."
