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Check 21
The world of banking changed forever on October 28, 2004 when the Check 21 legislation went into effect and altered the way financial institutions handle checks. This legislation allows banks to take advantage of electronic check processing and distributed capture. Commonly, Check 21 has been viewed as a catalyst to full image exchange and a means to reduce check processing and handling costs, but the opportunities presented by the legislation are so much more. Check 21 is a catalyst to new markets and new opportunities to generate revenue – it is the new C21 Marketplace.
The new landscape is more competitive than ever, and new rules of engagement for banks have been introduced. Financial institutions must not only fend off existing competitors located in their geographic region but also protect their current corporate customer accounts from financial institutions found hundreds or thousands of miles away. Banks that do not acknowledge the changes in the market environment, actively participate in the C21 Marketplace, and determine how to leverage new business opportunities will find themselves at a great disadvantage.
Market Opportunities
An example of a market opportunity is remote corporate capture. A financial institution can now provide a product to corporate customers to allow them to capture checks at their place of business and securely make an electronic deposit over the Internet. Financial institutions are now able to open new deposit relationships with any company anywhere in the world, even if the company is outside their branch footprint.
Some of the benefits to the bank's customers include the elimination of a trip to the bank, extended business hours, direct check and deposit information into their accounts receivable system, and a greatly simplified deposit-preparation process with a significant reduction in errors. This is only a single example in a long list of products financial institutions will offer in the C21 Marketplace to increase their customer base and generate additional revenue.
The C21 Marketplace is not just about remote check capture. The new market is about deposit and check information management for financial institutions and their customers.
New Technology
To take advantage of the opportunities of the C21 Marketplace, technology that is specifically built to support this marketplace is required. Financial institutions must consider:
- Management of hundreds or even thousands of remote capture locations
- Controlling the risks and quality issues associated with allowing customers to capture their own checks
- Implementation of on-site infrastructure or a service provider to print quality Check 21 compliant Image Replacement Documents (IRDs)
- Integration to existing legacy applications so that downstream systems and day two processes are not negatively impacted
Technology designed to address these issues will be the key to success in the C21 Marketplace.
The C21 Marketplace
Check 21, once viewed simply as an opportunity to cut costs, offers forward-thinking financial institutions tremendous growth opportunities. Competitive boundaries imposed by geography and outdated technologies are vanishing with the adoption of powerful new technologies. Those who fail to recognize and react to the new competitive landscape will see their franchises quickly lose ground, while those who embrace the new technology will be richly rewarded in the new market.
This convergence of new rules and technology has created a new market full of potential for big wins and big losses. Relying on old thinking, old technologies, and old products is a formula for failure. NetDeposit® provides you the franchise-building technology platform to win in this new market – the C21 Marketplace.
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