Problem: The check readers Orion Federal Credit Union used to verify the soundness of checks were sunsetting.
Solution: Signing up with Bluepoint Solutions, check imaging software that also connected to the credit union's existing check fraud management program. With its vendor pick, Orion FCU made a move to upgrade to teller capture from branch check capture. The decision has helped eliminate imaging and balancing checks at the end of the day for the credit union. Orion FCU is the first to use the integrated product from Bluepoint.
When Early Warning LLC announced it was discontinuing its "deposit chek" analog reader, the fraud and risk vendor's customer Orion Federal Credit Union needed to find another way to determine the collectability likelihood for its members' checks. The Memphis, Tenn. credit union has nine branches.
It was the summer of 2012, a period when Orion FCU was also in the midst of a core conversion, which is akin to open-heart surgery for financial services companies. Wanting to wait until after the project completed (Labor Day weekend), the credit union knew it would have to move quickly to replace the check fraud prevention system. It also knew it wanted something that integrated with Early Warning, its check fraud management program partner since 2005 (and former supplier of analog readers). "If we wanted to continue with upfront bad check detection, we'd have to move to a different system," Stuart Harrington, general counsel at Orion FCU, tells BTN. "We wanted to use the opportunity to have an integrated product."
It chose a product that integrated into its new core and Early Warning: Bluepoint's ImagePoint Teller. "There were other ways to keep Early Warning, but they almost seemed like taking a step backward," says Harrington, pointing out that some products would have required the credit union to key in the check's MICR line information.
Since deploying Bluepoint earlier this year, Harrington says the credit union with more than $500 million in assets has realized a number of benefits from the software, including a speed-up of check processing. In the bank's old process, tellers scanned checks in batches in a back room on Canon scanners, then separately scanned the checks on the analog readers to see whether the checks were hard hits.
By upgrading to fraud detection and image capture at the teller line and removing the need to scan checks twice the teller's end-of-day work was reduced. "You are taking what took minutes to seconds," Harrington says. "The teller loves it you don't want to mess with your tellers."
Back-office personnel are also benefiting from time savings gained from Orion FCU's recent technology deployment. Indeed, Harrington estimates the Fed previously returned about 200 checks each month due to poor image quality. In turn, the credit union's account processing unit had to hunt down the original checks to rescan and resubmit them, a process that ate up their day. That issue has improved since installing Bluepoint's software. Now, only about 10 checks per month are returned for poor imaging, Harrington says.
Bluepoint's teller interface is something Harrington also identifies as a bonus. The design obviously flags the teller when there's an issue with a check (such as displaying a big red banner when an account is closed), and prompts a teller on next steps "in plain language," he says. According to Harrington, the software can prompt the teller to tell the customer exactly what's wrong with the check, particularly if the check must be held. In the past approach, the teller would receive a code that corresponded to the likelihood of the check's collectability.
The cost of Bluepoint is comparable to what the credit union had been paying; however, Orion FCU did have to invest in scanners as every teller station comes with the hardware now. One scanner costs the company about $500 but he says that's a "minimal investment" for a product that offsets potential losses. "In the end, it pays for itself," he says. The new scanners are Canon CR-50, while the credit union also uses some of its old scanners, Canon CR-180, where space allows.
Because Bluepoint operates faster than its old method, among other reasons, the credit union lowered its threshold of what checks to run through Early Warning's Deposit Chek to $50 from $300. Previously, Orion FCU assumed if someone was going to try to pass a bad check to its members, it would be a larger amount; however, it has already caught $50 checks drawn on closed accounts, says Harrington. Still, it's early days to know if those are random episodes or whether a fraudster is testing the waters. "Stopping a $50 check now might deter an attempt with a $1,000 check later," he says.
In the coming months, Harrington says the credit union will deepen its integration with Bluepoint. He anticipates advancing the partnership to eliminate data entry for tellers. To that end, Bluepoint will pass the check amount to the core system so that a teller no longer has to type in the amount. "We're only in phase one with Bluepoint," he says.
Orion FCU has not made mobile RDC available to members. "We are looking at RDC eventually," Harrington says. For now, the credit union is working on making sure all of its many investments in the past year operate well. "We want to follow through on them."