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Beating the late-day check rush

A merchant capture case study from United Southern Bank

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  • Written by  Jack Malinowski, chief technology officer for Benchmark Technology Group, Alpharetta, Ga
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Beating the late-day check rush
By . Jack Malinowski, chief technology officer for Benchmark Technology Group, Alpharetta, Ga. He can be reached at jmalinowski@benchmark-us.com and 800-554-4582.

Monday through Thursday, United Southern Bank (USB) of Hopkinsville, Ken., closes all eight of its branches at 4:00 p.m. On Friday, the bank, which was founded in 1888 as Bank of Trenton, stays open until 5:00. Bank employees, however, could not leave until much later.  Check processing and settlement were keeping them in the office for an additional two to four hours each day and delaying the availability of funds to the bank’s important business customers.

On a typical day, $235 million-asset USB processes between 5,000 and 6,000 items, predominantly from a handful of large business customers. During peak days, tellers would process up to 1,000 items before the 2:00 p.m. deposit cut off. While these numbers are manageable when spread throughout the day, business customers often brought their checks into the branch within an hour of closing…sometimes just minutes before the doors shut.

Compounding the problem was an inefficient and error-prone check processing system.  Checks would jam in the reader/sorter and could only be run in batches without error detection, which meant a manual review of each check was necessary if a run of 1,000 items was off by just $.01.

The decision to capture
All this was impacting both bank operations and customer satisfaction. As a result, USB began searching for a solution that improved check capture and processing during the day and enhanced the bank’s competitive edge by adding a valuable service it could provide to loyal customers. 

The bank had been capturing checks at the branch since 2007 and was intimately familiar with the efficiencies it provided both USB employees and customers, so bank officials began searching for a corporate capture solution. USB Operations officer Jane Boley had four criteria for corporate capture technology, which were:
1. Compatible with existing bank management system—Paducah, Ky.-based Computer Services Inc. (CSI),
2. Secure,
3. Well-priced, and
4. Easy to use.

“Our brand and reputation rely on a robust offering of financial products and services as well as impeccable customer service,” said Boley. “Making the decision to offer corporate capture was not done lightly.  Strict criteria were established before our search for the right technology partners began.”

Web-based application
USB’s search took about six months during which the bank looked at four technology providers. As a result, the bank partnered with Alpharetta, Ga.-based Benchmark Technology Group in June 2009 to offer bank customers Benchmark’s Corporate Capture21 product. The web-based application enables businesses, such as a local utility company and its more than 13,000 customers, to submit accurate, balanced, and imaged deposits to USB. 

3.Getting set up online with the new capture system took business customers only about two to three minutes. There are three steps: 1. log in to the web-based application, 2. download the scanner interface, and 3. download the scanner driver.

USB currently offers corporate capture with the TS240 scanner from Digital Check, Northbrook, Ill. Originally, the bank offered users a different scanner, but its limited capabilities and frequent errors caused USB to change providers. The TS240 is equipped with 300 dpi non-contact cameras, which improve Courtesy Amount Recognition/Legal Amount Recognition (CAR/LAR) rates. This resulted in a fewer number of rescans by customers. Likewise, scanning capacity was improved as the machine can scan up to 100 documents per minute through a built-in feeder tray with a large pocket for checks.

“Security was one of my main concerns in implementing remote deposit capture,” added Boley. “Corporate Capture21 addressed these concerns by processing checks in ways that protect our customers while also ensuring secure electronic storage of captured images.”

The system places check images into the Check 21 Act’s standard X9.37 format and deposits them using secure file protocol. The images are retained in a central SQL server, where USB can provide the highest level of security, protecting both business customers and the bank. 

Corporate Capture21 and TS240 also enable auto-balancing to reduce errors and the time it takes to fix them.  Both business customers and the bank benefit from check batches that come into the branch already balanced as well as the scanner and software support that Benchmark Technology Group offers.

What capture has meant
By having customers scan their own checks and correct occasional CAR/LAR read errors, USB has reduced its own workload. As a result, the bank has extended the deposit cut-off for same-day availability from 2:00 p.m. to 3:00 p.m., while still getting bank personnel out by 4:00 p.m. each day.  Back-office check capture has been reduced to one full-time employee who can often get checks settled as early as 11:00 a.m.

“Our customers are also very pleased with corporate capture,” said Boley. “For many of our businesses, corporate capture offers a more convenient alternative to having to come to any of our branches…even to those who just have to walk across the street.”
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