Cheque Imaging & Truncation System
Cheque truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point by the presenting bank en-route to the drawee bank branch. An electronic image of the cheque is sent to the drawee branch along with the relevant information like the presenting date, presenting banks, MICR etc. This eliminates the need to move the physical instruments across branches, resulting in an effective reduction in the time required for payment of cheques, the associated cost of transit and delays in processing. The system is designed to accept images and MICR data of physical cheques submitted either on CD-ROMs or by direct electronic transfer. As such, the physical movement of cheques is truncated at the point of image capture and hence, the paying Bank does not receive a physical cheque during the entire clearing process.
1. Faster clearing cycle
The cheque imaging and truncation system operate on an Island-wide singular system which functions on a T+1 basis. With cheque imaging and faster processing times, banks shall be able to reduce “hold periods”.
2. Reduced risk
Civil unrest, floods and other major incidents can disrupt the cheque clearing processes and affect the smooth operations of banks. More common occurrences such as courier delays due to weather conditions can also affect clearing performance. In contrast, an exchange based on electronic transmissions can be completed within minutes.
3. Faster cheque tracing and statement re-creation
With imaging, all cheques will be imaged and stored in an electronic archive. An authorized staff member will be able to perform searches from their branch terminal and immediately print a hard copy showing both the front and the rear of the cheque. Statement re-creation will be speedier as well.
4. A variety of ways to access electronic cheque images
Banks will have the option of offering flexible, personalized customer access to cheque images. Electronic access to images will allow businesses to reduce the storage facilities needed for returned paper cheques and conduct in-house research on their cheque image archive. Both business and personal banking customers who have access to online banking shall have the option of viewing cheque images online, shortly after the transaction is reflected in their account. More timely account reconciliation will contribute to earlier detection of fraudulent items, and in turn, a greater chance of preventing fraud.
5. Potential new products and services to combat fraud
Cheque imaging shall enable banks to offer new products and services to combat signature forgery and cheque alteration. (Altering fields to show a value, payee’s name and/or date not originally authorized by the drawer of the cheque)
6. Efficient and streamlined workflow when using Images
Banks can process image items concurrently instead of serial processing of physical cheques, which enables them to manage the workforce efficiently.
7. Extended banking hours
With the improved efficiencies in the clearing cycle, Banks can accept cheques over the counter up to a later time to submit cheques for clearing, thereby increasing the service level to the end customers.
8. Image retrieval
Participating banks can respond to enquiries on the cheques quickly as images can be easily retrieved, increasing the service level to the end customers.
9. Eliminate courier costs
Electronic transformation of cheque images and MICR data eliminates the additional spending on courier activities