check processing

The Last Mile of Check Processing: A Hidden Financial and Operational Impact

In the age of technology, financial institutions are often looking for ways to automate processes and make them more cost-efficient. However, when it comes to check processing, many banks and credit unions who are still using the same solutions implemented at the time of Check 21 may be unaware of the underlying financial and operational impact.

The journey of a check can involve multiple software solutions and valuable resources from personnel to IT – not to mention the unseen costs associated with fraud, duplicates, and returns. This overhead amplifies with every point of presentment, from in-branch workflows to remote channels.

In this blog, we dive deeper into these points and efficiency roadblocks, and discuss how automation and modern deposit platforms reduce expenses, as well as ensure your institution is prepared to address the last mile of check processing.

Unseen Costs in Today’s Existing Check Processing Ways

Added expenses associated with deposit acquisition and image processing revolve around the negotiability of items and the probability that the check will flow through the processing system without any flagged issues that cause it to be routed through additional solutions, and image quality (IQA) or usability (IUA) analysis.  Fraud, duplicates, and returns, contribute to hard costs in the following ways:

Fraud – Check fraud, a continued and ever-changing obstacle for banks and credit unions, not only risks account holder loyalty and the reputation of the financial institution, but can lead to monetary losses, which impact the bottom line. 

Duplicate checks – The industry is still facing an uphill battle managing and detecting duplicate checks – when the same item is deposited through more than one channel and/or multiple institutions. In addition to related fraud expenses, banks and credit unions also face potential double posting fees and other related processing expenses.

Chargebacks, returns, and the back-office – Financial institutions commonly rely on separate solutions to process Day 1 and Day 2 items, increasing costs and decreasing efficiencies within the back-office. In addition, many of these efforts involve manual research and corrections, costing time and money. 

Reducing Costs, Speeding Processing, and Improving Efficiencies with Modern Platforms

Since the days of Check 21, most financial institutions have relied on their image-based platforms without considering a change – “they’re doing their job so why switch?” is often the response. Just like any other technology, there have been tremendous advancements in the last 20 years around image acquisition and processing. In addition to minimizing the cost of depositing a check, newer software platforms leverage more modern architectures, which improve automation and reduce manual keying, promote cross-channel consistency and data visibility, as well as allow banks and credit unions to reduce their overhead and time associated with testing, implementing, and deploying updates and new products. These operational improvements ultimately have a trickle-down effect that reduces the risk for fraud with real-time analysis cross-channel, less errors, and enable banks and credit unions to identify potential issues faster and before the check reaches the back-office workflow. 

The Unify Difference

Built on the most modern technology today, Unify is a thin-client cloud-native platform that streamlines and simplifies image acquisition and processing by allowing financial institutions to deploy the same platform and 1 external API across all Day 1 and Day 2 processing. The result: a reduction in the total cost of ownership, more streamlined check processing, and increased automation - translating into improved efficiencies and better account holder services. 

To see a 1:1 demo of Unify’s capabilities and the benefits it can bring to your bank or credit union as you approach the last mile of check processing, contact us

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