How does Check 21 affect item processing?

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

faster processing time

Processing transactions with a check scanner speeds up processing time by allowing financial institutions to exchange documents electronically instead of couriering them, a difference that results in quicker settlement and quicker availability of funds. This benefits financial institutions by creating consistently higher account balances and benefits their customers by providing faster access to funds. Instead of waiting days for deposits to clear, clients can access funds in a matter of hours.

Less 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 read financial information from checks and prevent errors that result from keystroke errors when deposits are processed in the conventional manner.

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, makes it possible to commit a lower level of human resources to processing, and allows financial institutions to save on transportation costs by transmitting electronic images to other institutions instead of sending the original documents. .

Improved customer satisfaction

Faster processing time and fewer processing errors lead to higher customer satisfaction. Bank customer satisfaction also improves due to better cashier service. Instead of mostly sitting with their heads down while completing a deposit transaction, tellers get 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 an image of a check to a financial institution using Remote Deposit Capture (RDC), the deposit is recorded and verified immediately instead of taking days to reach the institution. This scenario benefits customers because fewer parties handle their checks, which reduces the potential for documents to be used fraudulently, and fraudulent checks are more quickly identified.

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 instead of physical checks. Financial institutions benefit from image sharing in a number of ways, including faster processing time, fewer processing errors, lower processing costs, increased customer satisfaction, and reduced fraud. To learn more about the benefits of image sharing programs for institutions and their clients, contact an imaging solutions provider for financial institutions today.