How does Check 21 affect item processing?

Enacted on October 28, 2003 by Congress, the Check Clearing Act for the 21st Century (also known as the Check 21 Act) makes it possible for financial institutions to process checks using bank check images instead of physical checks. This is considered a breakthrough in banking procedures that positively influences item processing in various ways, such as creating faster processing times, decreasing processing errors, reducing processing costs, improving satisfaction. of the client and the reduction of fraud cases.

Faster processing time

Processing transactions with a check scanner speeds up processing time by allowing financial institutions to exchange documents electronically instead of sending them via courier, a difference that translates to faster settlement and faster availability of funds. This benefits financial institutions by consistently creating higher account balances and benefits their clients by providing faster access to funds. Rather than waiting days for deposits to clear, clients can access funds within hours.

Fewer processing errors

Using a check scanner results in fewer keystrokes per deposit transaction, which subsequently reduces transaction errors by reducing human error. Item processing errors cost financial institutions money in a number of ways, particularly by lowering customer satisfaction ratings and creating various types of rework. The check scanner and related application automatically reads financial information from checks and prevents errors that result from keystroke errors when deposits are processed conventionally.

Lower processing costs

Using bank check images instead of paper documents reduces processing costs in several ways. It eliminates much of the processing machinery required in a conventional processing environment, allows a lower level of human resources to be devoted to processing, and enables financial institutions to save on transportation costs by transmitting electronic images to other institutions rather than sending the original documents. .

Higher customer satisfaction

Faster processing time and fewer processing errors lead to higher customer satisfaction. Bank customer satisfaction also improves due to better ATM line service. Rather than primarily staying in a head-down position while completing a deposit transaction, tellers have a significant amount of face-to-face time with bank customers because scanners reduce the number of keystrokes.

Reduced fraud

Check fraud seriously affects financial institutions and their customers. Check Scanning helps prevent fraud for both parties. When a business scans a check image to a financial institution using Remote Deposit Capture (RDC), the deposit is posted and verified immediately rather than taking days to reach the institution. This scenario benefits customers because fewer parties handle their checks, reducing the chance that documents will be used fraudulently and fraudulent checks will be identified more quickly.

Conclution

The Check 21 Act significantly and positively affected item processing through the implementation of image exchange processes such as RDC, in which financial transactions are completed using images of bank checks rather than physical checks. Financial institutions benefit from image sharing in a number of ways, including faster processing time, fewer processing errors, lower processing costs, higher customer satisfaction, and less fraud. To learn more about the benefits of image sharing programs for institutions and their customers, contact a provider of financial institution imaging solutions today.