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Bank Check Processing: Digital File Transmission Creates the Opportunity for Improved Practices

April 23, 2012 | Comments: 0 | Views: 127

Innovative technology has offered numerous bank check processing opportunities to financial institutions. Paper transactions previously required extensive manual work by everyone involved. Multiple businesses shunned accepting checks from their customers because they took so long to settle and had an increased risk for insufficient funds. This issue has been solved with the introduction of digital imaging in the banking industry. The transaction in most scenarios only takes one to two business days to settle, and fund verification happens at time of deposit, rather than days after. A customer can submit their deposit, receive instant verification, and resume the day. Banks send the image to the receiving institution to complete the rest of the settlement process. Paper document procedures, settlement times, and costs have been drastically reduced, thanks to the digital imaging capabilities supplied with a bank check scanner.

Bank Check Scanners Offer Various Benefits over Traditional Methods

How has imaging changed the workload of financial institution employees during daily operations? Previous operations for a single deposit included:

  • Physically Reviewing Submitted Information
  • Hand Keyed Entry
  • Proofing
  • Sorting
  • Batch Processing
  • Balancing

These functions are still completed as paper transactions are deposited; however, a bank check scanner makes the procedure occur faster, reduces overall workload, and increases accuracy. Hand keyed entries increase the potential for a mistake, thus creating additional tasks to be required. Bank check processing by means of digital copies minimizes hand keyed entries. Tellers do not spend their day peering at checks or keying massive amounts of information. Scanners capture all data on the document, verify accuracy, and help the teller to quickly move on to the next customer. A bank check scanner can be implemented at each teller station to eliminate extensive end of day processing obligations, or be used in a branch setting to ease operations.

Proofing is completed by a machine that looks much like an oversized typewriter. Checks are fed through this device, along with deposit slips as the teller reads the documents. The courtesy amount is entered by the clerk as the document is fed into the proofing machine. This amount is typed on the check with magnetic ink character recognition to prevent further work. A proof machine can also be capable of reading bank or item numbers to catch mistakes and perform balancing operations. Scanners are capable of completing these tasks, in addition to stamping or other necessary actions. They can also be implemented as a batch procedure at regional or corporate locations to improve back-end operations.

Sorting is accomplished by reading the magnetic line found at the bottom of the document for later capture operations. Newer solutions allow all capture to be performed at time of deposit or shortly after for quick imaging, verification, and settlement. Documents do not have to be handled again after batch processing has been completed. Courier services are removed from the picture since an encoded file can be sent to the necessary location via the Internet. Imaging has caused monumental transitions within the financial industry regarding bank check processing, and a majority of people are beginning to experience the benefits provided by this highly effective method.

Older bank check processing methods are slowly becoming replaced by more advanced digital technologies. Bank check scanner implementation reduces paper handling risks and decrease costs.

Source: EzineArticles
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