Positive Pay is an excellent example of software that has changed dramatically in its race against the criminal element.
T. Houston Technology Group released the 2010 Remote Deposit Capture Rules and Training Guide. The Guide is a great tool for training End Users (Customers) about the technology and the legal and regulatory rules that govern it.
According to Houston, “We wrote the Guide for several reasons, but specifically to provide financial institution managers with an easy to use Training Guide for their customers. The Guide explains the basics of Remote Capture technology and the requirements to comply with state and federal guidelines. For example, a Risk Management Policy is required by the FFIEC and is provided as part of the Guide.”
Remote Capture has proven to be a service that is loaded with benefits, but like all electronic financial systems, there are risks that must be managed.
Written to Build a Strong Foundation, the Guide was designed to create a strong foundation and each chapter addresses a specific topic. Each customer must implement a Risk Management program that complies with the Federal Financial Institutions Examination Council (FFIEC) Risk Management of Remote Deposit Capture guidelines.
Although Risk Management is required in financial institutions, it is not required in all industries and that is where the Guide is invaluable. It teaches customers what to do and how to do it.
Branding and Customization.
The Guide is printed in beautiful 4-color process, which makes the pictures and graphics pleasant to view and easy to understand. To provide identification of the financial institution that provided the system, the Guide can be branded and customized with special procedures and pictures of scanners sourced to the customer. This provides a unique tool for training, as required by the FFIEC and demonstrates the commitment of the institution to the customers.
Tailored Training
Customization allows the financial institution to use the guide for initial training and a reference manual for the customer. The Guide is replete with Risk Management Policy, Procedures, how-to pictures and narratives. It will allow your customers to quickly learn the best practices for managing their system and the risks of Remote Deposit Capture.
12 Chapters
This is the most comprehensive Guide published for Remote Deposit Capture and it includes the following chapters:
- New Requirements for 2010
- Check 21 Act and Remote Deposit Capture Operations Basics
- Check 21 and Remote Deposit Capture Warranties and Indemnities
- Security
- System Design and Architecture
- Hardware Features
- About Checks
- Automated Clearing House (ACH) Processing and Requirements
- Operational Procedures
- Internal Controls
- Audit Work Plans
- References of Applicable Rules and Regulations
- Training Program includes Frequently Asked Questions (FAQs) which can help customers understand the Remote Capture concept quickly and explore beneficial features and benefits they might miss without it.
- Check 21 Basics
Although customers are not expected to have the same level of knowledge concerning Check 21 and related laws–they should have a basic foundation of the requirements and reasons why Check 21 is able to process millions of check images and substitute checks each day.
Although many customers will ask questions about the Agreement and related documents, such as “Exposure Limit” and “Image Quality Assurance,” during the initial process, some will think of questions later and need a reference Guide that they can understand. Providing the Guide, or similar training, demonstrates to the customer that you understand their needs without having to be asked.
Technology Future of Remote Deposit Capture
In the System Design & Architecture Chapter, advanced technology, such as browser-based applications, is discussed from the user's viewpoint. Client software is arguably the most important part of the system because it is the interface to the user. “User Friendly” is more than a cliché–it is the difference between success and failure for a system. Customers will quickly learn what the future of Remote Capture looks like and the technology that will take them there.
About Checks
This chapter focuses on the operational and legal aspects of handling checks and why the Fed and image exchange vendors scrutinize certain types of items, such as check carriers or foreign items.
Remote Capture augments endorsements with hidden information about each check. Customers learn about the valuable research information that is part of each image record and how it may help them when they have a question or a research issue.
What is CAR/LAR? This dynamic item processing duo has been electronically encoding checks for years, but only for the very large financial institutions and service bureaus. Now that savvy vendors realize that the number of prospective customers is more than a million, the price has plummeted.
Another solid player in Remote Capture is ACH. It is now 30+ years old and the volume is still growing. Each year, NACHA managers find new ways to add value to ACH transactions. Using the same desktop scanners as Check 21 customers, Remote Capture programs quickly and safely convert eligible checks into ACH format and transmit them to the paying institution cheaper and faster than paper checks.
The FFIEC referenced “Least Cost Routing” in its recent Risk Management of Remote Deposit Capture Guidance, as it relates to ACH, but did not expound on the details. We explain in simple terms what transactions can be used and the rules of engagement.
Check volumes are declining and ACH volumes, especially Back Office Conversion (BOC), are going up. Find out why and what it means for Remote Capture systems and for the financial institutions that provide them.
Policy Addresses Risk Concerns
The FFIEC defined several areas of concerns for Remote Deposit Capture and this chapter discusses each area with numerous examples and includes a Policy that can be updated and adopted by your customers. The Policy is FFIEC-compliant and includes all of the components recently published by the FFIEC or interagencies.
The Security Chapter addresses the #1 concern of customers and how to keep their information and business as safe as possible. From opening the mail to storing checks at the end of business, each step is shown with examples and narrative.
Procedures
Check images whiz around the U.S. protected by encrypted software that has thwarted fraudsters for decades and is continually enhanced to meet the stringent requirements of federal agencies. Security software stops the hackers. The FDIC reported that solid policies and procedures have reduced check fraud with Remote Capture to levels lower than the general population.
Each procedure is necessary to properly operate the Remote Capture system, manage the activities, and comply with the rules.
- Planning the Day’s Activities
- Verifying the Previous Day’s Deposit
- Verifying the Previous Day’s Deposit Acknowledgement
- Reviewing System and Security Reports
- Preparing Checks for Processing
- Using Endorsement Stamp
- Creating a Control Document
- Maintaining Equipment
- Jogging/Straightening Checks
- Capturing Checks
- Verifying Image Quality
- Processing the Daily Log
- Storing Checks in Safe Place
- Destroying Checks
- Copying and Archiving Daily Information
Legal and Regulatory References
For customers, attorneys and compliance officers who want to delve deep into legal research, we provide a concise Reference of Legal and Compliance Rules and Regulations. Where possible, we provide hyperlinks to save typing and key errors.