Bankers — and some vendors — have been known to get into spirited debates about the relative merits of capturing check images at the teller line of a branch versus the so-called back counter.
But for Jersey Shore State Bank, a $742 million asset bank based in Pennsylvania, the decision to deploy teller image capture boiled down to a simple philosophy of handling transactions only once.
Jersey Shore State operates 12 branch locations across three counties in central Pennsylvania. The bank employs about 70 full and part-time tellers and does all of its check processing in-house.
The bank was among the early adopters of teller image capture, deploying the technology in 2005 — just months after the Check Clearing for the 21st Century Act went into effect. The bank was so eager to deploy teller capture that it began evaluating the technology in early 2004.
At that time, Jersey Shore State manually processed its teller transactions on paper. But, the bank’s growth and a corresponding spike in transaction inconsistencies prompted it to look for an automated solution that would provide better control, accountability and reporting. The bank also wanted to eliminate the crunches associated with manual batch processing and end-of-day tasks. Although teller capture was still in its infancy, the benefits of electronic deposits greatly appealed to the bank.
Most importantly, the bank saw teller image capture as a way to move to a one-stop processing environment where check images and transaction data are captured at the point of presentment.
Today, the bank has about 70 teller image capture workstations, including drive-up windows.
Back-Counter Capture a Non-Starter
Philosophically, back-counter capture was a non-starter for Jersey Shore State.
“Walking checks from the teller line to the back-counter for capture later in the day made no sense to us,” said William V. Mauck, vice president of electronic banking and deposit operations for the bank. “We also were afraid that back-counter capture increased the risk that documents would be misplaced and that the check image file wouldn’t match the transaction data in our teller system.”
“With teller capture, transaction data and check images are captured immediately and simultaneously, and you are done,” Mauck said, adding that the transition to teller capture went smoothly and did not necessitate any significant changes in workflow.
Additionally, the average time it takes the bank’s tellers to process a transaction has dropped from just over a minute before deploying teller capture to an average of 41 seconds. Capturing checks and transaction data at the same time also provides a much cleaner audit trail than back-counter capture. And, teller image capture enables Jersey Shore State to transmit deposit files to its back-office throughout the day, something that cannot be done with back-counter capture. Transmitting files throughout the day means the bank no longer needs to set a deposit cut-off time for its customers or pay couriers to transport checks twice a day from its branches to its proof department. It also eliminates the bottlenecks associated with end-of-day processes.
Deploying teller image capture also ensured that the task of capturing check images was the responsibility of all the tellers and did not fall on any one person’s shoulders. With back-counter capture, Mauck feared that one person in each branch would naturally emerge as the most adept at capturing checks, taking them away from his or her teller role and making the individual a proof operator of sorts.
Similarly, with back-counter capture, Mauck was concerned that there would be an end-of-day crunch to get items processed, potentially resulting in additional hours for some branch personnel. With teller image capture, Jersey Shore State was able to reduce its back-office staff from 4.5 full-time equivalents to just 1.5, with no additional hours required of branch staff.
Teller capture offered Jersey Shore State other benefits compared to back-counter capture.
For starters, the bank’s teller image capture system uses pop-up messages to notify tellers of accounts with alerts, holds or stops, automatically stopping transactions unless a supervisor authorizes an override. This has significantly reduced the bank’s losses from bad checks and overdrafts. Before deploying teller image capture, Jersey Shore State relied on its tellers to verify that there were no alerts, holds or stops when a cashed item was drawn from an account.
Similarly, because the bank’s teller image capture system requires that all transactions must balance before the teller can proceed, the bank’s number of deposit corrections has dropped considerably. In the past, deposit errors were found by the proof department, making them a next-day process.
By scanning checks at the teller line, the bank is easily able to identify fraudulent checks (they lack MICR ink) presented to the teller. Depending on the customer’s relationship with the bank, the fraudulent checks are handed back or kept for destruction. With back-counter capture, the customers would likely be long gone before the fraudulent checks were spotted.
Additionally, the ability of the bank’s teller image capture system to make images available for retrieval immediately after transactions are completed has enhanced customer service. Several times, the bank has had to view items deposited that day to make a determination on a customer withdrawal. With back-counter capture, the images might not have been available until the next business day.
With teller image capture, Jersey Shore State also was able to completely eliminate the internal general ledger tickets used at the teller windows of each of its branches.
“We got rid of case after case of paper,” Mauck said, noting that the bank’s teller image capture system automatically inserts virtual tickets between transactions. In an environment where items are being carried from the teller lines to the back counter, a hefty paper trail would still exist: “You would still need some type of control documents to maintain transaction integrity,” Mauck said.
The Bottom Line
Jersey Shore State’s philosophy of one-stop processing has resulted in heady improvements in labor costs, errors, turnaround time and customer service. While back-counter capture has its benefits, Mauck is skeptical the technology could have matched these results.
Samuel Golbach is vice president of deposit management and paperless solutions at WAUSAU Financial Systems. For more information visit www.wausaufs.com.
Copyright (c) December 2011 by BankNews Media.