Financial institutions look for ways to make consumers' lives easier with convenient services and more options.
ATMs are successful touchpoints for convenience, but options are a little trickier, according to Larrie Hayes, vice president of retail banking for Wisconsin Rapids, Wis.-based Wood County National Bank.
FIs try to balance convenience with overhead, but sometimes the scales tip, as has been the case with enveloped ATM deposits. They're convenient, but they're also slow and costly, customers don't like making them, and they're definitely not scam-proof.
Those are a few reasons why FIs are exploring check imaging.
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Wood County National, which has $250 million in assets, launched its first image-enabled ATM in May, after beta testing a solution with Mosinee, Wis.-based Wausau Financial Systems Inc. The solution uses a bulk note acceptor to rid the customer and the bank of enveloped deposits, ensuring deposit accuracy.
According to Hayes, it's a win-win solution. "One of the benefits is that deposits are verified at the time of the transaction, and that benefits the bank and the customer."
"In the old days, when someone deposited their check in an envelope at the ATM," he said, "someone at the bank would have to access the ATM daily, retrieve the envelopes, and manually open and verify each transaction."
Now deposits at the ATM are verified when they're made. Signatures on checks are compared to signature cards kept on file, and currency denominations are compared to regularly updated templates at the time of deposit. If the authenticity of the check or cash can't be confirmed, said Keith Koback, sales resource manager for point of presentment solutions at Wausau, the transaction is rejected.
"I think one of the greatest advantages of an image-enabled ATM is that it helps FIs with fraud," he said. And since about 70 percent of deposit fraud takes place at the ATM, check- and note-verification will eliminate quite a few headaches for FIs like Wood County.
Paper: A thing of the past
According to the Federal Reserve System, electronic payment transactions numbered 44.5 billion in 2003, compared to 36.7 million paper check payments. Koback said all FIs will be moving in this direction sooner or later.
"For FIs, all Check 21 really says is that the banks have to be able to accept imaged checks. Image-enabled checks at the ATM help create that imaged document, but they also save bank employees time," he continued.
Andy Kurtz, who worked with Wausau for 10 years developing the imaging solution, said companies like Wausau are working to save FIs time. Manufacturers, such as NCR Corp. and Diebold Inc. that hold a majority of the FI market share, are helping Wausau develop imaging solutions. Other manufacturers, like Wincor Nixdorf, will soon be joining them on the front lines, Kurtz added.
Kurtz, who is now the product manager for distributed capture solutions at Salt Lake City-based NetDeposit Inc., said imaging solutions also can help FIs implement other ATM transactions such as check cashing and wire transfers.
