cloud banking

The Savings Boost: 3 Ways a Modernized Deposits Platform Cuts Costs in the Back Office

Are item processing operations costing financial institutions more than the revenue they generate? Many industry experts say yes. 

With check volumes decreasing, the cost to maintain conventional check processing systems is inversely increasing. These systems are primarily used to process batches of physical checks, and aren’t equipped to integrate with the latest technologies or keep up with market changes. As these infrastructures reach their end of life, hardware upgrades become more expensive and may be more difficult to support.

These are just a few reasons why it’s crucial to find a modern alternative. Beyond automating tasks, a modern, cloud-based back-office platform removes bottlenecks and ensures your institution is positioned to address the “last mile” of check processing. Built using the latest technologies, these solutions add interoperability and compliance capabilities that transform outdated systems from “cost-heavy” to “cost-effective,” including: 

  1. Automating Day 1 and Day 2 Processing
    Modern image acquisition and processing platforms reduce, and can even eliminate batch processing. With less of a line-of-business approach and more of an enterprise view, banks and credit unions can validate, reconcile, and settle in real-time – no more scheduling or waiting. Configurable business rules enable institutions to determine how and when each item is analyzed, removing the labor-intensive Day 2 process, and allowing a holistic view of all channels through a single database. With less manual intervention, overhead costs can be significantly reduced.
  2. Improving System Connectivity and Speeding Required Operations
    Leveraging APIs, modern platforms provide interoperability within the bank or credit union cross-channel, as well as with various third-party vendors. By taking advantage of newer architectures like dockers and containers, current interfacing capabilities allow for seamless transitions between internal and external applications, and the ability to scale back implementation, testing, and maintenance downtimes. A cloud architecture also makes these platforms agile, allowing financial institutions to scale up or down as needed, without incurring the associated costs or hardware requirements that would be present otherwise.
  3. Ensuring Compliance and Security Consistency 
    Maintaining regulatory compliance can be difficult for legacy systems. Without the ability to upgrade properly or regularly, banks and credit unions risk exposing themselves and account holders to data breaches and other security challenges - incurring hefty fines and fees. Today’s platforms allow financial institutions access to the most current data security and compliance solutions – often automated when leveraging a hosted deployment model. 

Although check usage is on the decline, physical processes are very much still in practice and checks aren’t going away – more than 11.2B checks were processed in 2021 according to the Federal Reserve. Businesses of all sizes still depend on checks to make and receive payments. Making-do with the systems that are already in place and piecemealing software systems together often results in a far more labor-intensive and expensive solution, versus the cost to migrate to a more modern technology platform.

Back Office Automation with Alogent

Alogent’s single and secure image acquisition and processing platform, Unify, processes paper and image-based transactions from any point of capture and leverages advanced, enterprise-wide deposit automation strategies. Banks and credit unions benefit from straight-through check processing in a reliable, open, and scalable framework. 

Learn more about how your institution can modernize back-office processing with our thin-client, cloud-native platform. 

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