Wachovia is among the first banks to introduce a remote deposit capture (RDC) service for its business customers, taking advantage of the legal ability - as outlined by Check 21 - to present image replacement documents for collection in lieu of the original checks. "It's an ideal concentration service for the de facto concentration of funds for companies that may have a large number of depositories across the country, or dispersed geographically," says Joe Cornelius, vice president and product manager for image services, in the treasury services department for Charlotte-based Wachovia.
For example, one Wachovia ($401 billion in assets) customer receives U.S. dollar check deposits in Cancun and other locations throughout Mexico that it previously forwarded to Mexico City before sending to the U.S. "Just for them to centralize these deposits into Mexico City, they had wasted a day," relates Christine Jenkins, vice president and market consultant in Wachovia's global payment services group. Now, "They can send those check transmissions to us and on the same day have them applied to their account."
The value proposition is similar for a domestic U.S. enterprise. "We have customers who have a difficult time reaching our branches, even though we probably have the best branch footprint on the East Coast," says Cornelius. "'Remote' is defined from the perspective of the customer."
Given the potential savings to be had, the most likely question for companies is not whether to adopt the new RDC service, but when and from which financial services provider. One differentiating factor is an institution's experience in handling checks and check images. "We process over 20 million checks per day," relates Jenkins.
The Fine Print
Then, there's confidence in the quality of the images and the robustness of the scanner. Unlike the typical commercial banking service, RDC involves a hardware component. "The acquisition of the hardware does provide a new wrinkle compared to traditional treasury products in terms of acquiring scanners and maintaining them going forward," notes Cornelius.
Wachovia has negotiated favorable terms with scanner providers, which it passes on to its customers, who will own the hardware themselves. "We wanted scanners that would ensure us very good images," says Jenkins. Customers also have the option to purchase their own scanners or even to use existing hardware. But Jenkins believes that acquiring a certified scanner through the bank will be the most advantageous deal for a corporate customer, since the bank could help arrange for servicing. Additionally, the bank's software is designed to take advantage of certified scanners' unique features.
The processing platform and end-user software were developed using technology from Oklahoma City-based Advanced Financial Solutions (AFS), a subsidiary of Metavante (Milwaukee). "We had a working relationship with AFS with respect to using their solution for our image exchange platform," relates Cornelius.
The software at the remote deposit capture site will perform validation to ensure that each image is of sufficient quality to be transmitted to the bank. Then, the deposits will be sent through a secure Internet connection directly to Wachovia. For customers who prefer to use SWIFT (La Hulpe, Belgium) as the transmission mechanism, a solution is currently being developed.
When Wachovia receives the deposits, it will feed the images and data into a "virtual sorter," which performs further image validation and decisioning as to how to clear the check in the most cost-efficient and time-sensitive manner: image exchange, substitute check or an "on-us" deposit that draws upon another Wachovia account. "In the image exchange environment, we will be able to take a mixed cash letter and feed that through our virtual sorter," says Cornelius. "Sorting and clearing takes place through software."