What CUs Must Do To Capture More Cost Savings From Processing
Since the introduction of Check 21 legislation, financial institutions have been implementing remote capture strategies from a number of sources. Clearly the most widely adopted application has been corporate capture, but branch capture and ATM capture are becoming more widely adopted.
By the end of 2008, approximately 65% of all financial institutions will have implemented a branch capture solution representing about 200,000 seats of capture, allowing all financial institutions to capture transactions at the point of origination and move these transactions at a much faster, safer pace, thus speeding up the clearing process and lowering costs.
With the rising cost of oil and its effect on the cost of transportation, however, the justification for remote branch capture is compelling. Once a credit union implements branch capture, it quickly discovers that the need for transportation may be reduced, although it does not eliminate it entirely. New account documents and/or loan origination documents are still generated at the branch and often need to be moved to a central operations center for exception tracking, auditing or further approvals.
Imaging these documents is also required to truly derive the maximum benefits that technology can provide. While the benefits of imaging are high, the process of preparing, scanning, classifying and indexing documents is often time consuming, and days behind the origination process.
It has been proven that teller line capture can be achieved without increasing member transaction time as imaging documents reduces the amount of keying required by the teller and with greater accuracy. Other results of implementing teller line capture allow for a significant reduction in back-office personnel, purchasing, storage and transportation of internal documents, because paper tickets can be substituted by virtual images. This allows for quicker clearing of transit checks as these images can reach the back office sooner, allowing for faster transmission of image cash letters. The possibility of extending branch cut-off times is often a benefit realized by many credit unions.
Back counter capture has many of the same benefits as teller line capture, but it does place the requirement on the credit unions branch personnel to handle work a second time, thus adding additional tasks to their daily activities.
Technology can also be used track over-the-counter work in real-time as it moves from the branch through the downstream workflow. Unlike paper documents that one can see, touch and count, batches of electronic images cannot, so if they are lost or go out of balance for any reason the problem is known immediately instead of being discovered at the end of the day. As branch networks grow, tracking and balancing these electronic batches grows exponentially.
Teller line capture and/or branch capture is only one part of the total branch optimization story. To gain the greatest benefits from implementing technology, the new account or member service desks also need to be addressed. Here again, new technologies can help streamline the opening of new accounts and/or lending processes.
Instead of using paper, the documents are now made electronic through the capture and appending of electronic signatures. This reduces the risk involved in the handling and misfiling of documents and offers immediate availability of documents across all the credit union's locations. Documents are automatically identified and all required index information is extracted from the document without manual keying.
Electronic signatures are applied to the document using pads that create a biometric key for each signature. After all required signatures have been applied, the documents are archived and immediately available for retrieval, approval, and validation. Member IDs, supporting documentation and digital photos can also be introduced via standard scanners or web cameras. The solution improves the quality and completeness of the process, lowers costs and removes the risk involved with missing or incomplete documents. On-boarding new members becomes a simple process with less paper shuffling, loan applications are turned around quickly and the entire member service experience is greatly improved.
Implementing this technology allows users to capture a variety of document types and formats without leaving their desks, thus providing more opportunity for cross-selling and further enhancement of the member relationship. The audit process of these electronic documents is also automated. This allows the financial institution to obtain absolute accountability for its documents and provides all the information required for auditing. The entire process provides a better work environment for branch personnel and frees up their time for more productive sales activities.
Only by implementing imaging at both the front office and the new account and/or member service desks can optimization of the branch be achieved. Over time, faster scanners will become available to perform all types of imaging, but for now, the tools and systems are in place to allow all sizes of credit unions to benefit from the use of imaging and achieving technology.
Douglas Turner is product line manager- payment solutions, and Joseph Pitzo is ECM solution manager, with WAUSAU Financial Systems. They can be reached at dturner