Banks are starting to automate the other half of the remote-deposit process — the production of electronic deposit slips for the check images that corporate customers are sending them instead of paper checks.
U.S. Bancorp of Minneapolis announced such a feature last week, an enhancement to its U.S. Bank On-Site Electronic Deposit service. And other banking companies have begun offering automated check-amount reading with less fanfare.
The feature makes use of CAR/LAR scanning — for courtesy amount recognition/legal amount recognition — and U.S. Bank claims accuracy of up to 80%.
Automated CAR/LAR scanning has been around for more than a decade, but it has been slow to take off because of high error rates.
Software to read the check’s courtesy amount — the numerals a payer writes next to the payee’s name — came to market in the early 1990s; some early versions got the figure right only 40% of the time.
Software to read the legal amount recognition — the spelled out version beneath the payee’s name — came along several years later.
By comparing the two values, modern software can reach read-rates of 70% or more. And in environments such as a lockbox, where the software verifies the check amount against a second source such as a payment coupon that accompanies a bill payment, accuracy can top 80%, bankers and other experts say.
U.S. Bank began testing automated CAR/LAR scanning this month at eight of its 150 remote-capture locations, mostly with larger clients, said Kristine Oberg, a product development manager for treasury management services.
It is a good fit for remote-capture customers that receive a lot of checks, said Ms. Oberg, a vice president. “I don’t think it is for everybody. It doesn’t provide significant value for low-volume customers.”
Over the next few months, she said, U.S. Bank plans to make the capability available to other remote-capture customers by providing software they can download and install on their treasury workstation computers.
First Horizon National Corp. of Memphis, one of the first banking companies to offer remote capture, added the CAR/LAR feature a few months ago, at an additional cost, said Taylor J. Vaughan, its senior vice president of cash management services.
“Some folks can justify the extra expense, and some cannot,” Mr. Vaughan said. The feature is more popular with companies dealing with high volumes of checks, he said.
Fiserv Inc. of Brookfield, Wis., a provider of financial technology outsourcing, introduced a remote-capture service this month, with CAR/LAR scanning as an option.
All 11 of the banks that have signed to use the remote-capture service will be offering CAR/LAR scanning to their corporate customers, said Ted Umhoefer, Fiserv’s senior vice president of product management and industry relations.
All of the handful of corporate customers already using the banks’ remote-capture services are also using the CAR/LAR option, he said — but as smaller companies also sign up, only about half of them will take advantage of option.
Robert Hunt, a senior analyst at TowerGroup of Needham, Mass., a market research unit of MasterCard International, said that automating the check-reading process could help businesses as they take on some of the tasks traditionally handled by banks.
“In a remote capture environment, where you don’t have highly trained proof operators, it’s a huge advantage,” Mr. Hunt said.
Beyond merely offering CAR/LAR, BB&T Corp. of Winston-Salem, N.C., requires that its remote-capture customers use it.
It is an embedded feature of the remote service BB&T’s Creative Payment Solutions Inc. introduced in April.
Harold Williams, a senior vice president at Creative Payments Solutions, said that by reducing keystrokes, the check-amount readers reduce the risk of miskeying critical data.
That is important, he said, because in remote capture, check scanning and data input are out of the bank’s hands.
The BB&T software also automatically balances the deposit, a job that banks traditionally do, Mr. Williams said.
“Taking something that we had perfected centrally and decentralizing it was a personal concern of mine,” he said.
The automated systems can “make sure the work is being processed properly,” Mr. Williams said. Reducing errors at the beginning of the process can eliminate customer complaints that would arise from making adjustments after the fact, he said.
But an NCR Corp. executive said automated reading of check amounts is a job for banks, not their customers.
It’s always better to have a second set of eyes, said Joseph K. Kniceley, a vice president of sales in NCR’s payment and imaging solutions division. Businesses should continue to verify the check amounts manually at the point of capture, he said.
“CAR/LAR does have a role in distributed capture,” Mr. Kniceley said, but it should happen “where the centralized balancing and processing function is.”
“Corporate capture is a benefit to the industry,” he said, but “there’s not a real benefit for doing CAR/LAR at the corporate location.”
