Academic journal article ABA Banking Journal

Innovations in Check Imaging, Clearing and the Impact of Check 21

Academic journal article ABA Banking Journal

Innovations in Check Imaging, Clearing and the Impact of Check 21

Article excerpt

The world of check processing and check imaging is undergoing a period of tremendous change. With the introduction of new technologies, reduced cost, increased competition and changes in the check clearing function, service and software providers are being forced to examine and incorporate major changes to offer value and remain viable.

Impact of Check 21

The almost certain passage of Check 21 legislation (Check Clearing for the 21st Century Act, formerly the Check Truncation Act of 2003) this year should be a wakeup call to community banks and those in the check processing industry. By the end of 2004, the promises of check imaging will not only be possible on a widespread basis but will be necessary for financial institutions to remain competitive. Check 21 will remove certain legal obstacles and facilitate the use of check truncation and electronic collection of return checks.

Image exchange is one of the most innovative developments for financial institutions since the introduction of ATM cards in the 1970's. While paper checks may never be completely replaced by electronic check conversion, Check 21 will allow the processing industry to revolutionize check transactions by speeding up the collection of checks, improving availability of funds, reducing fraud losses and lowering collection costs like never before.

Getting on board with imaging: Your overall goal is to empower back office operations in order to improve customer service, increase productivity and decrease operating costs associated with labor and postage. In selecting an imaging system, it's important to choose a flexible, compatible program that combines advanced system design with superior software to provide a comprehensive suite of check imaging solutions.

Adding Internet-enabled image retrieval: An advanced Internet-enabled image retrieval service helps you stay ahead of the competition and differentiate your financial institution by providing a powerful value-add product to customers that can help increase loyalty and bottom-line profitability. Customers have the convenience and flexibility of viewing cleared checks via a PC connected to the Internet or from a link on your institution's web page. …

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