Canada’s largest bank is starting down a road towards the digital imaging of cheques that other financial institutions across the country are expected to follow.
RBC Royal Bank Friday said it had already introduced digital
imaging capabilities at its operations centre and within some of its branches and call centres. In December, the technology will be rolled out to the rest of the branches and by next spring, the bank’s online customers will be able to track their cancelled cheques over the Internet.
The move is just the beginning of an industry-wide shift from traditional cheque-clearing process to one where cheques will be captured digitally and stored in electronic archives. The method, sometimes known as cheque truncation, means the original paper cheque can be disposed of early in the clearing process. In the United States, many financial institutions have moved to digital imaging in response to the Check Clearing For the 21st Century Act, which seeks to remove some of the legal requirements that paper checks be presented in the clearing process.
In the Fall issue of its newsletter, the Canadian Payments Association (CPA) said it has embarked on a similar initiative whereby it will work with the Department of Finance and other government departments to identify the legislative changes required to support cheque imaging.
“”One of the points that must be clarified in law is that a cheque image (front and back) will assume official legal status of the original cheque,”” the CPA said. “”Obviously, key to moving in this direction is the implementation of an image quality control system that will produce high-quality images for financial institutions, clients and the courts, if necessary.””
Glenn Blaylock, senior vice-president of operations RBC Banking, said the bank is using imaging equipment from Toronto-based Symcor Services and storing cheques in its archive. RBC used internal resources to create the front-end application to retrieve the images. The result will be a vast improvement from the process by which customers attempt to trace cancelled cheques, he said.
“”By the time the request is sent in, they hunt for the microfiche, the copy’s made, it’s put in the mail — it takes several days,”” he said. “”It’s just a huge, huge benefit for the customer experience.””
Norma Mayer, Symcor’s senior vice-president of marketing and client services, said RBC’s move is just the beginning of a large opportunity for the digital imaging market.
“”Although I think there’s been a lot of interest in it and Royal Bank has been on the leading edge of that, all financial institutions will be interested in moving that agenda forward fairly quickly,”” she said.
Some banks take the cheques and send them somewhere else and run them through another image machine, but Blaylock said RBC would be conducting what’s called a “”prime pass,”” where cheques are captured and imaged at the same time. The image will first go into the digital archive and after a few months will be moved onto tape. The bank is required to keep the images for seven years.
“”Symcor is building it for obviously more than just our bank,”” he said. “”When the other banks come on side they’ll have to have pretty large storage capacity.””
Mayer said momentum will build quickly, given that digital imaging has already been implemented by Bank of America and others.
“”They were seeing the results of some of this in the U.S., and I believe a lot of our financial institutions would have adapted this regardless of the CPA guidelines.””
The CPA said it hopes to have all financial institutions using digital cheque clearing by 2006.