Most financial industry veterans would agree that remote deposit capture (RDC) is a game-changing development that lowered the cost of item processing. However, as the industry approaches the six-year anniversary of the passage of the Check 21 legislation, many banks still lack a sophisticated capture strategy. In fact, it was estimated at the 2009 BAI Remote Deposit Capture Summit that only 60 percent of all financial institutions have deployed branch capture technologies, and the number is substantially less for teller capture.
By the end of 2009, the Federal Reserve will have closed all but one of its paper-processing facilities, creating an imperative for banks to focus on branch or teller capture strategy before costs go up dramatically. Best practices in payments, supported by impressive ROI experiences from early-adopter installations, dictate that the most efficient mode of branch capture should be conducted at the earliest point of presentment possible: the teller line.
While most institutions recognize the workflow efficiencies of capturing items at the teller station, they discount this option because they think it is too expensive and slow. The industry has been led to believe, often by first-generation capture technology providers, that a single branch capture solution is the best strategy.
Teller capture systems provide a more efficient check processing transaction, freeing up a substantial amount of time for additional teller activity. Studies have proven that the time for standard teller capture transactions is not significantly greater, as no time is spent during any part of the workday closing out and entering batch information. Tellers no longer have to wait in line for other tellers to finish before they can scan their items. Because the tellers are up to date throughout the day, day-end processing becomes a thing of the past.
An early adopter of the teller capture technology, Grow Financial Federal Credit Union in Tampa, found the process added merely seconds to the transaction, and eliminated the need to do batch scanning at the end of the day. The time needed to balance at the end of the day fell from 15 minutes to five minutes.
Greater return on investment and increased operational efficiency is also achieved with teller capture solutions. The equipment and software cost for a branch is typically no less than the cost of licenses and scanners for about four tellers. In previous payments strategies, tellers had to leave the workstation to scan each batch. If tellers performed their scanning at the end of the day, queuing problems usually resulted. Teller capture solutions require a check scanner for each teller, which means that tellers never find themselves waiting for access to a scanner. Training sessions are also expedient and straightforward. All tellers in a branch can be fully trained in half a day.
An example of an almost immediate return on investment is how Grow Financial invested $857,000 in teller capture software and hardware, which included substitute check printing, 130 computers, the Primary Payment System and system maintenance. Grow Financial was able to eliminate three proofing machines and redeploy two full-time employees.
The system also strengthens fraud detection efforts, since the process involves intensive analysis of red flags. If a check presented at the teller line contains non-negotiable items, such as a missing signature, a discrepancy between the courtesy and legal amounts, or fraudulent information in the routing and transit line, it is addressed at that very moment. Scanning the check at the point-of-presentment also allows bank personnel to compare it to both internal and third party real-time fraud detection databases. This practice guarantees fraud reduction at the first point of capture and allows more items to be passed to the database, reducing the overall occurrences of fraud. Some of the current day fraud detection databases are delivering reductions in fraud of up to 90 percent. These results are only available if the items are scanned at the teller workstation.
The adoption of modern RDC solutions needs to increase if banks are to realize the substantial cost reductions that Check21 can deliver. In making the move to RDC it is critical that banks keep an open mind and seriously consider item capture at the teller workstation. For those banks still in the decision mode, it is not too late to select the superior and proven choice of teller capture. Those that do will almost certainly reduce their operational costs and fraud while improving customer service.
