Related Articles:
Inside MICR scanning
MICR vs. OCR
Optimizing check images
Teller Capture vs. Branch Capture
Dealing with Difficult Documents
Related Products:
Back in the early 2000s, when electronic check clearing first became legal in the United States, there was a lot of speculation about what that would look like inside the bank branch. There were two main competing methods for how the day’s checks would be scanned: Teller capture, in which every teller station has a scanner and the employee scans the checks as they come in; and branch capture, in which all the checks from the whole branch are scanned at once in large batches.
Looking back on things now, either way it played out was going to change the face of check processing dramatically. It used to take days to clear checks as the paper traveled from the bank of first deposit (BOFD) to the paying bank. However, since the Check Clearing for the 21st Century Act (Check 21) was passed in 2003 and banks began exchanging check images electronically, customers today often see next-day or even same-day credit for deposited checks rather than the three days’ float time that used to be common.
In the early days of Check 21, it was expected that most banks would quickly move toward branch capture, for three reasons. One was that checks scanners of 20+ years ago were much more costly in inflation-adjusted dollars, so putting them at several teller stations in each branch was significantly more expensive than using one large scanner for the whole branch. Second, desktop check scanners were new, not everyone knew how to use them, and teller turnover was high — so most banks preferred to have a handful of operators rather than train their entire branch staff. Back then, it was not uncommon for branches to collect all their checks at the end of the day and send them to a processing center where trained operators would scan checks from the entire region in bulk! And the third big reason why banks were hesitant to try teller capture was because it took place during the customer transaction. If anything went wrong, either because of the machine or from operator error, it was one more thing that could cause a bad customer experience.
Bank One was among the first to put check scanners at the teller window in 2004; however, two things often prevented that from happening in those early days. First was the lack of the infrastructure needed to clear those items between banks, and second was the introduction of remote deposit capture, the process in which businesses captured their deposits in their own offices. Even at Bank One (and later at Wells Fargo), those “teller capture” scanners weren’t being used for full check truncation, but mainly for archiving and for MICR reading.
Banks first began to implement back counter and back office capture, since it fit better with the existing infrastructure. In branch capture, banks scan all check deposits in batches either during slower times of the day or at the end of the day. These images are then processed in the operations center where they are proofed and any corrections are made. Should a transaction needs correcting and the image provided is not clear enough for the proof operator to read, a call is made to the branch to research the original document.
Though more efficient than processing the paper documents, the branch capture process still involves an overall higher head-count for the bank. In addition to employing all of the tellers, the bank must also maintain full-time employees in the proof department. Back counter utilizes fewer and lower-cost scanners than the previous back office operations centers, as well as fewer employees — however, it still utilizes more employees than teller capture at the front counter.
In the past decade or so, teller capture has surged in popularity with banks and other financial institutions, steadily replacing branch capture as the method of choice. The reasons for this include the availability of the software and network infrastructure to support the capture and passing of the volume of data required for teller image capture. In addition, the cost of the hardware has come down, making it more likely to realize ROI on these large-scale projects.
The advantages of front-counter teller check capture include the reduction in FTEs, courier costs, costly counter documents, teller keystrokes, and fraud. While it was initially believed that by requiring tellers to scan checks during a transaction, they would be less able to interact with the customer. However, the opposite has proven to be the case. With the scanner performing much of the work, the teller has more time to be “heads-up” with the customer. The scanner is able to capture the MICR and CAR/LAR data in a high percentage of the cases, requiring fewer keystrokes and less teller involvement in completing the deposit. Routing numbers for all items and account numbers for on-us checks can also be verified while the customer is in front of the teller.
Scanners and the related software also reduce the amount of human error due to keying in the wrong data. In addition, many software platforms include fraud and duplicate detection software to alert the teller during the transaction to any suspect or already deposited items. This offers a tremendous cost savings opportunity to the financial institution.
Spreading the work out through the day eliminates the huge backload of work that can pile up at the end of the day creating frustration as tellers await an available scanner to balance out before leaving work. Additionally, balancing is done throughout the day eliminating another end of the day headache. Finally, same-day availability deadlines can be extended using teller capture as the work is streamlined throughout the day rather than piling up at the end of the day. These are the many reasons that banks are rapidly adopting teller image capture.
For more information on Digital Check’s teller capture scanners, check out our SmartSource Expert Elite or SmartSource Pro Elite models. For branch capture, the SmartSource Professional offers two-pocket sorting capability at speeds of up to 200 documents per minute. For more information about branch and teller check capture, contact us.
