Sunday, December 21, 2008

2009: A Year of Risk and Reward

By Mark Brousseau

There can be no question that 2008 has been a horrific year for business. Yet as bad as this year has been, 2009 is shaping up to be a year of both risk and reward for many forward thinking companies.

That’s according to Rob Haberman (, senior product manager for Purepay Receivables Automation. Haberman notes that governments worldwide are pouring money into their economies, to kick-start recovery. Savvy companies will be shoring up their balance sheets and preparing for the inevitable upturn, he says.

Haberman shared a few thoughts on some of the process opportunities we will see in 2009.

Manage Your Costs and Your Customers’ Costs

Leveraging technology to reduce costs will be a major issue in 2009, Haberman says. Stripping waste out of your balance sheet and your customer’s balance sheet will be a key element for survival. One example is the use of remote deposit and capture.

With this, customers use small low-cost scanners to balance and transmit invoice coupons and cheques to your in-house remittance system, Haberman notes. Your customers reduce the need to manage and transport paper checks. On the other hand, you have the ability to scale your operations to meet demand variances, without major expense or disruptions. There is also the possibility for per-transaction revenue. Equally important, since transport and processing time is reduced, funds are available far sooner, Haberman explains.

Waving the Red Flag – Stopping Fraud

Fraud through identity theft has become a major issue and resource drain for many companies in 2008. In November of 2008, the US Government enacted a series of regulations, referred to as the “Red Flag Rules”. In May 2009, these rules will be fully enforced by the FTC, as well as federal and state financial regulators. These regulations are designed to make financial institutions and creditors more accountable, in protecting their customers against identity theft.

In the least, these rules are complex, requiring a wide range of companies to have written identity theft prevention programs. The penalties for not complying are considerable and avoidable, Haberman says. While there is no substitute for a fully developed program, creative use of existing remittance automation technologies can be valuable first line of defence.

As an example, hot file systems can be set up to flag suspicious names and addresses, for further investigation. Implementing this is a cost effective way to filter out fraudsters, while avoiding a corresponding growth in personnel, Haberman says.

Reworking Workflows

For remittance processors, workflow is everything. In too many cases, remittance automation systems have been added on to the current workflow, without consideration as to how to best leverage this technology. When the economy was strong, this was not an important issue, Haberman notes. However, in 2009, Haberman expects to see a revolution in work process.

Companies will be taking a long hard, look at how checks and invoices are handled and whether the old workflows are making the best use of current technology. We anticipate that many processors with find considerable savings by making common sense revisions to their environments.

In some cases this may require a simple tweak, in other cases an investment in new technology may be in order, Haberman concludes.

There is an old saw that states “In chaos, there is opportunity”. There is no question that 2009 will be a chaotic year, Haberman admits. However, we believe that sometime next year a corner will be turned and the recovery will begin. Those who have prepared for this recovery will reap rewards for years to come, he says.

What do you think? Post your comments below.

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