Friday, August 21, 2009

Forum & Expo Photos

Posted by Mark Brousseau

Some photos from the TAWPI 2009 Forum & Expo in Washington, D.C.

Wednesday, August 19, 2009

ET Phone Home

Posted by Mark Brousseau

Vijay Balakrishnan, president of StratEx LLC (770-598-5747, passes along an article he wrote on the recent announcement by USAA that it will allow its customers to make deposits by iPhone:

Mobile phone cameras have captured images of everything from election protests in Iran to the recent tragic collision of a helicopter and a small plane over the Hudson River. So, what could one possibly add to the list of things that would intrigue mobile shutterbugs? With apologies to Mr.McGuire in the movie The Graduate, "I have just one word for you. Just one word.....checks."

The recent announcement from USAA, allowing its customers to make deposits by sending images of checks taken with their Apple iPhones, brings together technologies from the 19th and 21st centuries. Until the advent of Check 21, the movement of deposited funds depended on the physical transport of paper. An extensive retail branch network was developed to act as collection points for deposited paper. USAA, which serves 7.2 million active and retired members of the U.S. military and their families from one branch in San Antonio, has consistently used technology to turn conventional wisdom on its head. Three years ago, it announced its Deposit @Home service that allows customers to make deposits by sending images of checks scanned at home. Despite early scepticism from many, USAA claims 150,000 users. The addition of mobile smart phones takes the remote capture notion even further.

In addition to this announcement, mobile deposit technology provider Mitek Corporation has announced relationships with Fiserv, RDM, NCR, and J&B Software to take the capability to their customers. As these formidable players get past their pilots and launch offerings, we will likely see more financial institutions make mobile deposit services available.

What about fraud, you say? Doesn't Check 21 require account and transit information to be read magnetically to ensure security? While I admit that the prospect of sensitive check images flying through the air can be unnerving, and there are issues of authentication, privacy and data integrity that need to considered (another post, another day), the fact is that there is no regulation that requires that the magnetic ink character recognition (MICR) information be read magnetically. In fact, Check 21 is silent on the subject. Thus absent regulation, it falls to the individual financial institution's tolerance for risk, versus the obvious convenience of the service.

There are two factors that can mitigate risk to some extent: the old dictum of knowing your customer (KYC), and the option to delay funds availability until the check has cleared. I believe we will see the adoption of mobile deposit capture in defined communities such as the USAA customer franchise, where the financial institution has a very good idea of risk exposure. Credit unions with well defined memberships are more likely to offer this service than banks (and like USAA, most credit unions are also not extensively branched allowing them to make virtue out of necessity). We will likely see the service offered to the "safest" customers first, based on their deposit history, followed by a gradual expansion using funds availability agreements as a tool to calibrate exposure.

The banking community at large has a different challenge. Deposit acceptance is arguably the raison d'etre for large retail branch networks. Remote capture in general, and mobile deposit in particular, poses an interesting channel conflict paradox (see BAI Insights for a summary of a presentation I did with Bob Meara from Celent on the RDC/Branch paradox). Thus, my take is that banks (particularly the larger ones) will perceive mobile deposit as a bridge over troubled waters and be reluctant to put their branch network at risk.

While I don't see the airways saturated with check images from mass deployment, I believe mobile deposit will do well through niche (not necessarily small) adoption. Technology providers, transaction processors, and financial institutions all have different but related niche marketing challenges ahead. Astute target market selection will likely govern success. The alignment of factors like service and product features, pricing (ex: who pays for the data plan for zapping all those images, and what's the payback?), as well as path-to-market partnerships, are imperatives to be carefully considered.

What do you think? Post your comment below.

Ad Hoc Image Verification

By Mark Brousseau

Despite the increasing importance of image quality to applications beyond the back-office (think: ECM), most organizations are still using ad hoc processes to verify image quality -- if they are checking at all -- according to the results of a recent TAWPI Question of the Week.

A whopping 31 percent of respondents to the survey say they verify image quality through random visual checks -- topping all other responses. Seventeen percent of respondents visually check all of their images to verify quality, and 10 percent use thumbnail previews.

An eye-popping 17 percent of respondents admit that they don't verify image quality at all.

Only 24 percent of respondents to the survey say they have an automated quality control system for images.

What do you think? Post your comment below.

Friday, August 7, 2009

Hidden Benefits of Outsourcing

When most organizations consider outsourcing, Mike Smith of SourceCorp says the most obvious benefits come to mind:

... Cost containment through labor savings
... Increased accountability
... Leveraging the provider's extensive investment in technology, methodologies and people
... Reassignment and better management of in-house labor

Smith says more savvy organizations recognize that there are a myriad of less obvious, but just as vital, benefits, including:

... Reduction of overall management burden
... Access to specialized skills and industry best practices
... Improved credibility and images by associating with superior providers
... Increased flexibility to meet changing business requirements
... Improved internal management
... Increased security

"Given the capabilities present in today's marketplace, major outsourcing firms offer extremely high levels of security that oftentimes outperform those of the organizations seeking to engage their services," Smith says, adding that usually security is a perceived risk to outsourcing, but is not in actuality.

What do you think? Post your comments below.

Thursday, August 6, 2009

Money-Saving Strategies

By Mark Brousseau

During the interactive roundtable luncheon at the 2009 TAWPI Forum & Expo in Washington, D.C. this week, attendees shared the best money-saving strategies they have implemented in the past year.

Below are some of the best ideas.

... Take good care of your scanner maintenance technician and they will reciprocate.
... Use of early tracking of customer replies to mailings in transit can help you avoid the cost associated with sending second notices
... Consolidate IT archive solutions; getting rid of outdated technology can save you big bucks
... Use slightly slower (and less expensive) disk storage in place of ultra high-speed archiving
... Enable internal and external end-users to access your archive to eliminate the need for dedicated back-office staff to handle all archive requests
... Ensure that personnel initiatives are team-based, not individual-based
... Take a hard look at open source technologies for IT back-office functions; they work fine and saved one end-user hundreds of thousands of dollars a year
... Educate your staff on the cost -- and potential impact -- of errors; other strategies for reducing errors: send errors back to the "team" that created them, have personnel who don't make mistakes mentor others, and don't be afraid to look at even small errors with relatively smaller savings
... Implement a program to recognize your best performers; symbolism helps
... Use a MICR database or other account lookup technology to reduce data entry requirements
... When shopping for an ECM solution, make sure its functionality is aligned with your business needs; you shouldn't buy features you don't plan to use
... Leverage the Internet to drive improvements in reject processing
... Move to image cash letters (ICLs) to eliminate daily trips to the bank branch
... Adjust your staffing to reduce the money you need to pay out for shift differentials
... Implement Lean Six Sigma
... Move to electronic signatures to save time and to reduce the number of documents required
... Adjust end-user pricing to further incentivize them to move to more efficient processing methods
... Consider remote keying with recognition technology
... Never pass up a free lunch -- definitely attend the interactive roundtable lunch each year

Sunday, August 2, 2009

Rethinking Document Design

By Mark Brousseau

When in control of designing handprint forms that your company is processing, create data fields with constrained boxes for each character, Fatali Karimi of AliusDoc, Inc. ( said during a pre-conference workshop at the TAWPI Forum & Expo in Washington, D.C. this morning.

Karimi suggests pre-printing each separated character box in a dropout color. Dropout refers to a technique where color filtering is used to remove some or all of the pre-printed form elements during or immediately after scanning the form.

"I recommend using a light shade of red for dropout, since people hardly ever use a red pen to fill out the forms," Karimi told workshop attendees. "If forms are designed in a dropout shade of green, and they are filled out with a blue pen, there's a good chance that after scanning the characters will be fragmented or totally dropped out."

Color dropout can occur either by using a special color bulb in the scanner or by applying software-based color filtering, Karimi noted. If you are using a color scanner bulb, the scanner manufacturer will provide you with a precise ink color specification for the dropout elements.

What do you think?