Wells Fargo is upgrading the teller imaging technology it uses in its branches in an effort to better serve business customers who need to deposit batches of checks. In so doing, it hopes to better serve check-bound customers and give businesses quicker access to funds.
Banks have been extending their check deposit processing cutoff times ever since the passage of the Check 21 Act in 2004, which made it okay to create digital versions of the original paper checks into electronic formats for processing.
Since the federal law took effect, Wells Fargo & Co. (WFC), the fourth-largest U.S. bank by assets, has been working to find ways to improve deposit processing operations, including making enhancements to its ATM, mobile and branch channels. It is readying plans to begin pilots of full image capture at teller windows at a limited number of store locations later this year. The planned upgrade will extend the volume of checks customers can deposit at teller windows and enable branches to accept checks until they close their doors.
Wells Fargo boasts more than 9,000 stores nationwide, and each teller station is equipped with imaging technology. Currently, these scanning stations let staff image up to 10 deposit slips or checks while the customer is present.
Meanwhile, deposits of more than 10 items are transported daily to an operations facility for image capture and further processing. The reliance on physical transportation can cause hiccups. If there's bad weather, for example, a storm could prevent the checks from moving where they need to go quickly.
In its current iteration, the branch image capture technology, which Wells Fargo finished rolling out to all of its locations in June 2012, accommodates about 98% of customer needs.
In the full image capture environment, which will be brought about with an upgrade to the bank's teller software, all teller transactions will be image enabled, which will eliminate the need to move the items daily to an operations facility for additional processing.
"The more we can streamline and move [checks] electronically, the better the chance to reduce error," says Jerry Enos, executive vice president and head of operations.
The new technology will primarily benefit a small percentage of business customers that come to physical stores to deposit more than 10 checks. The advantages to business and retail clients will include later cutoff times and quicker collections of funds, according to Wells Fargo.
"We think it will help our customers succeed financially," Enos tells BTN.
The tentative plan is to start the full image capture tests in May, with possible pilot tests to take place in the mid-Atlantic and central United States areas. This will be followed by a rollout to all state locations in 2014, said Wells.
Analysts view the advancement, though minor, as a smart play and in line with industry trends.
"All banks and credit unions are looking at all methods to be efficient as possible," says Marc DeCastro, research director of customer-centric bank strategies at IDC Financial Insights. "One way of being efficient is maximizing technology in branches in which full image capturing at branch [occurs]. …It allows a bank to reduce or eliminate a need for a courier run."
Though check writing is on a decline, there are still a good amount of check and cash deposits coming to tellers, adds Bob Meara, a senior analyst at Celent.
Moving from imaging 10 deposits at a time to an undetermined amount isn't a "dramatic" move, but it's a smart improvement for Wells, says Meara. "Banks are looking intently at their retail models to cut costs and redirect energy from processing transactions to selling and serving customers," he says.
Meanwhile, Meara points out that he expects a bank would likely provide a customer a provisional receipt if he were trying to deposit 100 checks, so as not to clog up a line or make a customer wait.
To that point, Enos says: "We don't want to turn our stores into operational processing areas. Customers wouldn't like it."
In research published in September of 2011, Celent predicted that 85% of all U.S. financial institutions would deploy some form of branch image capture by the year's end. At the time, most banks were choosing to use deferred capture and balance workflow, as opposed to teller capture technology.