Why Should You Care about Check Imaging?

A group of us recently attended the 2007 BAI show in Orlando. In addition to being a great excuse to get away from the cold Northeast (and have an opportunity to get mired in the Jet Blue Valentine’s day misadventure), it was a fascinating conference about the current state of check imaging. Given many of the leading banks and financial institutions as well as bank software vendors use our products, it was also a great opportunity to meet with some of our largest customers.

The pace of replacing checks with images has radically accelerated in the past six months as the Check 21 Truncation Act has seen more widespread implementation. At this point, more than 50% of all checks in the United States are scanned at or near the point of deposit. Thereafter the paper checks are stored and only the images are transmitted between the banks and their customers.

Benefits

The benefits to the banks are reduced handling costs because the burden of transporting checks in Leer jets around the country to be cleared has been radically diminished. Additionally they’ve achieved greater security and redundancy since check images are relatively easy to centrally protect and archive. The benefits to their customers are faster processing and access to funds and the ability to receive their bank statements on-line, including images of the checks they’ve written.

How does this apply to you?

Well, whether dealing with checks or other records, replacing paper documents with images is now the mainstream. If documents as critical as checks can be replaced with electronic facsimiles then most other documents can be as well. The future is here.

Is your organization doing all it can to incorporate paper and electronic documents into one system that provides easy but secure access to all such data? Systems now exist to allow you to seamlessly work with both scanned documents and electronic documents such as MS Office and Acrobat files.

What to Avoid?

One overriding theme of all the financial institutions speaking at the conference was that choosing the right vendor for their imaging needs was absolutely critical. All of them had stories of being held back by vendors who weren’t ready for their latest requirements or who created partially or wholly erroneous images.

Avoiding Bad Data

Like most scanned documents, check images include metadata. This metadata includes various kinds of fields including account information, scan date, scan location, type of document, type of image, indexing data, number of pages and other kinds of information. There were many stories of vendors that scrambled data, placing information in the wrong fields. (Our own experience at Snowbound over the years bears this out – we discover many images corrupted through misinterpreted specifications.)

Other stories were passed around about vendors who may have been specialists in scanning but not in image manipulation and who generated poor quality or incomplete images. Looking at some of the images from an imaging expert’s perspective, it was obvious to us that many suppliers didn’t use or know how to apply tricks of the trade that make images more readable.  And if you’ve ever looked at the back of the check after scanning, that’s critical.

Conclusion

Not all vendors are created equal. Select carefully for a vendor who fully understands what you need and has the experience and expertise to provide you with the best possible solution. It’s a competitive marketplace – choose the best vendors and tools to insure your success.

-Simon

Comments

[Tom Ziencina]

Wow! Read the article and thought you spoke to some of my staff. The 3 paragraphs that jumped out - What to Avoid?, Avoiding Bad Data & The Conclusion are my company's philosophy. We have Checkmation, a Check21 solution, that speaks to these issues. A Credit Union installation for over 2 months now has had 1 (one) item (1 check) rejected in the thousands submitted to the Federal Reserve.