Check Imaging Equipment Is Transforming the Lending Industry


Numerous depositories have made the switch to converting a paper check to a digital image as part of their settlement processes. This change in practices was initiated by Check 21 legislation and has taken hold in the banking industry for various reasons. While consumers have lost the traditional float time experienced during the clearance of a paper transaction, they have gained many increasingly convenient benefits like the ability to receive deposited funds faster and shorter wait intervals at the teller window. The legislation allows a bank to create a digital copy of the paper transaction to send to the involved settlement parties. Those institutions not supporting this process receive a legal printout of the image labeled as a substitute check. Capture can be performed at each teller station or as a back-office branch procedure, depending on the setup of an institution. Check imaging equipment can be purchased as a compact workstation design or as a large batch machine for branch scanning.

What are the Advantages of Installing Check Scanners?

The implementation of check scanners provides a few significant advantages to any financial institution. This technology is used to optically scan the paper document, verify information, and save the image as a file for transfer. Banks do not have to pay courier costs to send the document via mail or store a large amount of paperwork. Additional benefits include:

  • Lower Processing Costs
  • Simplified Internal Practices
  • Limited Transfer Risks
  • Non-Local Items Clear Faster
  • Accelerated Settlement
  • Decreased Risk of Fraud
  • Fewer Posting Errors
  • Enhanced Response Times
  • Better Customer Service

Imaging eliminates the need for long-term retention of original documents, supplies direct file transmission capabilities, and reduces the risk of errors during the handling process. Customers do not have to wait as long to receive their funds, and financial institutions spend less on transportation, operations, and labor. The risk of losing documents is present every time batches of checks are mailed to the financial institution. Financial institutions do not have to worry about this occurrence because courier services are not needed. Settlement periods average one to two days for most checks, with only a few types taking longer. Keyed entries lead to errors, whereas a quality check scanner can reduce or eliminate the need for manual practices. Decreased errors cause the cost of processing to lower because employees spend less time correcting mistakes.

Optical resolution, usability, and overall cost will be the three main determining factors when evaluating check-imaging equipment. Grayscale devices currently have a resolution of 300dpi that is emulated down to 200 dpi for processing Implementation method will affect the number of devices needed and the associated expense. A teller capture solution requires more equipment; however, it offers benefits such as condensed back-office procedures, fewer errors, and increased productivity. Branch capture entails less equipment and offers a centralized solution where all images are managed by only a few employees. A bank must research current practices along with expected transaction volumes to determine the best solution. The equipment must be reliable, easy to use, and support institution practices to offer the full list of imaging benefits.

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