As check electronification progresses, image exchange capability is becoming a competitive imperative for financial institutions of all sizes. While the pace of adoption of image processing technology is unprecedented, certain segments of the market have been slower than others to embrace the opportunities. Financial institutions that take a wait-and-see approach are at risk of being left with a costly infrastructure that threatens their ability to compete.
What appears to be missing for more wide-scale adoption are best practices for implementing image exchange with greater interoperability and standardization. Many early adopters have worked diligently in recent years to form key image-exchange partnerships, with institutions getting connected in viable, high-volume exchange relationships. These cumulative experiences have yielded new insights on how to streamline implementation processes and avoid some of the potential stumbling blocks.
Step 1: Develop an Image Strategy
Technology, competitive positioning, and the business case for image exchange have far-reaching implications for each financial institution. The impact on the organization as a whole — and how image exchange aligns with corporate strategy—must be considered. An effective business case should answer questions such as: What are our business objectives for image exchange? How will image exchange support our corporate objectives? How will image exchange save costs? What revenue-generating opportunities will it provide? How will our business be affected if we choose not to implement image exchange now?
Step 2: Image Enable Check-Processing Operations
The first decision organizations must make is whether to perform image capture in-house or to outsource that function to a third party. Financial institutions choosing the in-house approach will need image capture cameras and processing systems that are able to capture and create MICR information in the standard X9.37 file format for transmission. For those taking an outsourced approach, ensure that your provider adheres to the aforementioned specs, has top tier security in place and has a clear commitment to updating its systems over time.
Step 3: Create A Cross-Functional Project Team
Start with a project manager who knows the image exchange process and its technology. Enlist a cross-functional team that includes the operations manager for the item-processing function, an expert in connectivity and someone with the technological expertise to configure the vendor software.
Step 4: Make Workflow Changes To Accommodate Image Exchange
Such steps might include adding duplicate detection for image replacement documents (IRDs) and images, implementing image statements, and enhancing fraud detection systems to review images with fraud filters.
Step 5: Choose A Channel That Allows For Exchange With A Full Range Of Partners Through A Single Connection
Make image exchange simple. Implementing a single, robust connection is easier than managing multiple, individual connections to banks and/or other service providers.
Many financial institutions already have a plug-in, universal application for image transmittal from multiple capture sites to a main processing site that can most likely be used for image exchange. In such cases, image exchange implementation generally can be completed in as little as four to six weeks.
Step 6: Define Processing Procedures with Exchange Partners
Partner banks must work out rules and procedures for all aspects of the check process. Ask critical questions of your trading partners including: Where will electronic check presentment (ECP) and the ECPi data and image file be received? What types of data transmission does the bank support?
What are your current sending times remain the same with your new partner? Volume expectations: How many items does your institution expect to send to your partner? How will items that have been returned to the institution by your partner be handled?
Step 7: Train Staff
Teach employees why the change is being made and assure personnel that the work will be different but not harder. Above all, staff should be trained in the simplest ways possible to handle the new workflow and associated tasks. Even if an institution has a strategic plan for image exchange in place, that plan can become compromised if those who are actually administering image capture and exchange are not trained and continually brought up to speed on the equipment and processes.
Step 8: Test Everything with Partners And Vendors
Before testing, identify the parameters that determine a successful test. Some experts recommend sending a minimum of two good cycles—two separate files at two separate times — with complete send-and-receive at both ends.
Share test decks with your partners, capture images on all capture transports and test the entire process and confirm that the items can pass through the Federal Reserve as well. After an average testing period of 14-16 days, the two partners should meet to address and resolve any issues, or simply to agree to go forward with implementation. Be sure to test and notify partners in-house changes may affect the image exchange process. This includes changes in software or workflow policies and procedures. Ongoing communication among all stakeholders is always essential.
Diane Scott is the chief sales, marketing and product officer and chief strategy officer of Viewpointe. (c) 2008 Bank Technology News and SourceMedia, Inc. All Rights Reserved. http://www.banktechnews.com http://www.sourcemedia.com
