The Check Stops Here: The Forces Moving Check Truncation to the ATM

September 26, 2002

Abstract

 

San Francisco, CA, USA September 26, 2002

The Check Stops Here: The Forces Moving Check Truncations to the ATM

Celent Communications predicts that between 2006 and 2008, early-mover banks will venture into check truncation in the back office and then push it out to the point of deposit. Economics will be the primary driver: annual cost savings generated by check truncation at the point of deposit will reach at least US$1.2 billion.

In a new report, entitled , Celent evaluates the forces that will propel the adoption of check truncation at the point of deposit. In addition to the economic argument, other powerful forces include the passage of the Check Truncation Act, improvements in ATM and check imaging technology and lower costs, and the increasing number of outsourcing options.

According to Alenka Grealish, senior analyst at Celent, "The ATM has until recently been an overlooked factor in improving the check deposit handling process. A shift in check deposits from branch to ATM only scratches the surface of efficiency gains, however. The real bang occurs when check truncation occurs at the ATM."

The report draws upon Celent痴 experience and conversations with tenured ATM industry participants, including leading ATM deployers, EFT networks, and third-party vendors of ATMs and ancillary services as well as check imaging veterans.

A is available online.

 

 

of Celent Communications' Retail Banking research service can download the report electronically by clicking on the icon to the left.

 

        

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Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

 

  San Francisco, CA, USA September 26, 2002

The Check Stops Here:  The Forces Moving Check Truncation to the ATM

Return to report Abstract

 

EXECUTIVE SUMMARY 3
CHECK DEPOSIT HANDLING: WHAT'S WRONG WITH THIS PICTURE? 5
ATMS: THE UNDER-LEVERAGED CHANNEL 7
  Powerful Reach and Frequency 7
  Weak Richness 8
  Performance Travails 9
CHECK TRUNCATION: TAKING A BYTE OUT OF PAPER 10
  What is the "Electronification" of Checks? 10
  Potential to Revolutionize Check Deposit Handling 12
FORCES OF CHANGE 16
  Check Truncation Act: A Catalyst 16
  Check Imaging Advancements 19
  ATM Enhancements 21
  Risk Reduction Imperative 24
GAUGING THE VALUE TO JUSTIFY THE COSTS 26
  Big Bang in Check Processing 27
  Antidote to ATM Transaction Stagnation 29
  Value-Added for Consumers 31
CONCLUSIONS 34
APPENDIX 37

 

        

 

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