An_Introduction_to_Check 21

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					 An Introduction to


Check 21
   by Jaguar Software
                      The Bill
• HR 1474 passed by Congress October ’03.
• Signed into law by President Bush October 28th
  2003, with an go-live date of 10/28/04.
• Legalizes the use of “substitute checks” as a legal
  equivalent of actual check items.
• Forms the legal basis of image presentment and
  clearing.
• Encourages the use of image based item
  processing.
• DOES NOT MANDATE IMAGE EXCHANGE
        What it means for you
• You don’t have to change anything
• You can take time to educate yourself on
  Check 21, imaging solutions and how all this
  will benefit your bank
• You can develop a sound item imaging
  strategy
• You can ease your way into imaging
            Comparison - Before
•   Items are received from the FED (courier service)
•   Items are proofed (single pocket proof)
•   Items are posted to the core system
•   Items are microfilmed (microfilmer)
•   Items are shipped to the FED (courier service)
•   Items are fine sorted (reader/sorter)
•   Statements are prepared (employees)
•   Statements are printed (Laser printer)
                Comparison - After
• An electronic file is received from the FED (FED
  Import module)

• OTC items are captured and proofed (Capture
  module/Repair module + check scanner)

• Items are posted to the core system (POD module)
• Electronic cash letter is transmitted to the FED
  (POD module)

• Statements are printed (Statement module + high speed
  printer and possible folder/inserter )
                 Available Resources
•   www.aba.com
•   www.bankersonline.com
•   www.icba.org
•   www.federalreserve.gov
             Considerations
1. How and to what extent will check imaging
   impact your bank?
2. What level of imaging is suitable for your
   bank and how can you get started?
3. How does all this work in conjunction with
   your core processor, datacenter and the FED ?
4. What are the true benefits of check imaging?
        The impact of imaging
Advantages:
• Potentially significant operational savings
• Dramatic time savings
• Tighter integration of front and back office
• Drastically improved fraud detection and
  prevention
• Greatly improved research capabilities with
  full network integration
        The impact of imaging
Challenges:
• Paradigm shift = staff re-education
• Few short-term labor savings
• Requires additional IT resources and PC
  hardware
• Has to be handled as a long-term strategic
  decision (education, evaluation, due
  diligence)
        What level is right for you?

• Microfilm Replacement
• FED capture
• Full POD
• Branch capture with/without data center
  integration
• Full integration (Internet banking, E-Statements,
  Check conversion and presentment)
               How to get started
• Set up imaging committee
• Develop imaging strategy (what? when?
  where?)
• Evaluate imaging vendors based on the
  following criteria:
     •   Ease of use/flexibility
     •   Reliability/customer satisfaction
     •   Technological standards
     •   Cost/ROI
     •   Expertise/Personnel
                Compatibility
• The FED COF standard will be replaced by x9.37
• Common file formats governed by the FED (through
  the ANSI X9 committee) will enforce compatibility
  between vendors, the FED and third-party exchange
  endpoints
• TIFF and JPEG have already been established as the
  de facto standard for image capture with PDF as the
  format of choice for electronic document delivery
               True benefits
• Increased productivity for both front and
  back office operations (POD, research,
  statement preparation and delivery)
• Less courier service/postage fees
• Less dependence on the Federal Reserve
• More operational flexibility
• You will avoid future regulatory cost
• Allows individual financial institutions to
  offer additional merchants services
               Thank you
For additional information on Check 21 contact Jaguar
                      Software at
                   1-888-JAG-SOFT
                          Or
             Sascha@jaguarsoftware.com

				
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