An Orbograph White Paper

1. Advanced Execution Concepts in
Branch and Teller Check
Image Capture
We’re almost there…
Let’s finish the job
Written By: Joe J. Gregory,
Vice President Marketing
April 2012

2. Introduction
“Advanced Execution Concepts in Branch and Teller Check Image
Capture/We’re almost there, Let’s finish the job” is all about
honestly assessing the success levels of branch and teller image
capture and injecting one last burst of energy into these
processes to move from a state of average performance to
exceptional.
Why wouldn’t a financial institution want a significant boost in
productivity and improve the customer/employee experience?
This paper will focus Unfortunately, it’s a taller order than what one might think when
on how financial factoring in the varying levels of continued investment, project
institutions with justification, competing resources and version control.
branch or teller
image capture can
All hope is not lost. This paper will present a number of innovative
implement cost-
effective innovations execution ideas for those running branch and/or teller image
with a strong value capture. These ideas are relatively inexpensive to implement
proposition which compared to the initial cost of your system deployment, yet
do not require major provide a final value proposition which helps drive out lingering
system overhaul. costs and frustrations while increasing the satisfaction levels of
operations, retail and customers.
The paper will also
address issues
related to whether Salem, MA 2002 (Do we have a future?)
there is justification
in making these final It was blustery night on October 21, 2002 at the 5th Orbograph
improvements.
User Conference. An Orbograph business partner declared,
“Teller capture is going to take over branch capture in the next two
years, and then checks will be gone in about ten years.”
Well, here we are in April 2012 and as we write another chapter in
the life of the check processing industry, let’s take a moment to
evaluate the aforementioned declaration.
#1 - Teller capture will take over… (“Partially” True): No doubt
teller capture (referred to as deposit automation by many) has
continued to gain market penetration, and there have been a
number of financial institutions that have migrated from branch to
teller capture, but the adoption rate has been much slower than
many of the optimistic predictions.

3. Although few have attained the utopia of “straight-through-
processing”, there can be strong benefits to the process and many
banks have taken this path. This workflow has yet to achieve the
status of “predominant” when considering the majority of banks in
the US, but it continues to make market share gains and within
two to three years, may become the number one desired
workflow. Until then, branch capture and blended environments
should probably be declined “the leader” with outsourcing growing
as well.
#2 - Checks will go away… (Incorrect): Checks aren’t quite gone
yet. (I think we’ve heard that before.) Our industry is probably
Which payment processing less than 25B per year now, but we haven’t heard of
vehicle has the too many banks or credit unions that have eliminated their check
greatest chance of archive, nor are they completely disregarding their check
reducing cost in the
next few years?
processing.
What is true is that the market exhibits all the typical
characteristics of a market in decline; some level of reduced
investment, vendor replacement and migration to new
technologies with the objective of trimming expenses.
At the 13th Orbograph User Conference in October 2011, David
Walker, President and CEO of ECCHO, challenged the attendees
to rethink their payment strategies with questions like:
• Which payment has the greatest chance of reducing cost in
the next few years?
• Which payments have the greatest risk of regulatory changes?
• Which payments have potential for incremental value or
revenue?
These intriguing questions bring to light that the window is still
open to drive incremental savings and sustain revenues worth
millions at an industry level. Let’s finish the job!
A Simple Process Assessment
Let’s assume that your financial institution has successfully
implemented a branch or teller check image capture solution.
Whether it was six months or two years ago, as a decision maker,

4. you review the staffing, productivity, performance and satisfaction
benchmarks against objectives and found them acceptable.
You’re finding that your capture vendor has you in production and
the project team has declared success. However, striving for
excellence means you need to drive the project to another level.
Examples of potential improvement include:
1. Expand reporting for each sub-function in the workflow
2. Implement greater scanner hardware controls as equipment
ages and evaluate new scanner consolidation options
Feedback from
3. Minimize rejects and exceptions enterprise-wide
financial
institutions running 4. Reduce teller keystrokes and maximize efficiency
branch and teller 5. Reduce errors in larger transactions (customer vs. employee)
image capture 6. Optimize staffing models
indicates that there 7. Eliminate overhead of system managers
are many 8. Reduce on-us check fraud in cash checks and split deposits
improvements
9. Reduce deposit fraud on transit checks
which can be
attained. 10. Leverage the images for revenue opportunities and data
mining
11. Eliminate all paper possible
The result of all of these improvements will translate into an
optimal customer and employee experience while driving cost
savings of 30-50%.
Solutions Which Won’t Break the Bank
These all sound like great ideas, but how do we get there? The
following points are a summary of technologies and refinements
available today (with examples) which can be used to achieve
levels of excellence in branch/teller image capture.
1. Reporting: Technology advances in reporting are a good route
to evaluate.
a. Schedule an in-depth review with your capture/teller
vendor to identify underlying statistics not utilized (You
can always find them!).
b. Evaluate data export alternatives.

5. i. Implement a process to update a Business
Intelligence (BI) component which allows your
organization to slice and dice data.
ii. Many vendors have this as an optional module
iii. There are specialty vendors in the financial
industry who can provide stand alone options
iv. Evaluate even a simple dashboard approach
Improvements which
won’t break the bank
are critical to the
continual process Figure 1. Business Intelligence example analyzing field volumes over time.
improvement of
branch and teller
image capture.
(Figure 2. Business Intelligence example analyzing read rate over time.
2. Scanner controls and consolidation: Many software capture
providers do not focus on scanners, but there are many
benefits to be gained.

6. a. Talk to your scanner manufacturer or capture provider and
ask if they can provide access to scanner level:
i. Diagnostic tools
ii. Remote scanner maintenance
iii. Consolidated scanner performance and utilization
tracking
iv. Mean Time Between Failure (MTBF) statistics
Scanner level
controls are seldom
implemented, but
can provide great
value to controlling
distributed capture.
Figure 3. Example of scanner level diagnostics.
b. Evaluate a single control ticket which could be used
universally to manage the consistency of image quality across
all transports
Figure 4. Control ticket example with built-in quality tests

7. Figure 5. Example of scanner image output variations
c. Investigate new scanner technologies that can run both check
and currency on the same device for foot space and efficiency
savings.
d. Various scanner providers now have new features which
provide add-on capabilities including:
i. Built-in receipt printers
ii. ID Scanning
iii. Mag Stripe Readers
Consider these devices for migration at high volume tellers
and/or upgrades to older machines.
3. Minimize rejects: Distributed scanners produce wide ranging
results in reject rates.
a. Track and scrutinize all exceptions and reject types for
continue process improvement methodologies
b. Ensure your check processing workflow utilizes automated
MICR Repair for skewed and upside down items with rates
of at least 80%

8. Figure 6. Example of MICR Repair reading an upside down image.
4. Reduce keystrokes: Many times, recognition software is under
achieving or is not implemented as a critical success factor.
a. Talk to your vendor to understand their philosophy behind
recognition optimization
b. Review all document and field level performance levels
c. Gather scanner level reporting results
d. Target levels of 90% read rate with error rates at or under
1%
e. Evaluate higher performing recognition engines which can
reduce costs by 40%
Fine tune large
transaction
parameters for
accuracy.
Figure 7. Branch/scanner level reporting analysis.
5. Large transaction optimization: Errors in large transactions are
caused by customer and employee errors.

9. a. Review reporting on large transaction processing
b. Implement deferred workstation/back-counter procedures
which are more stringent on accuracy
i. Compare branch vs. centralized data entry accuracy
ii. Optimize recognition software for accuracy over read
rate. Targeted accuracy 99.6% or 0.4% misread
Sub-functional
Figure 8. Optimize accuracy levels for large transactions via threshold
automation
settings.
technologies can
smooth out staffing
issues and deliver 6. Staffing models: Focus on employee utilization rates for
on straight- operational considerations
through-processing a. Analyze volumes per hour (peaks and valleys) for both retail
promises for and operational staffing
branch/teller b. Reconcile productivity rates with actual volumes
capture
c. Evaluate low cost, time sensitive sub-functional automation
for load leveling and straight-through-processing
Figure 9. Report to analyze daily volumes for staffing and capacity
planning/hour.

10. 7. System overhead: Your support group may be using outdated
techniques along with intensive manual processes to assess
system performance and uptime
a. Review procedures on how repairs are managed
b. Improve speed of reporting to limit overhead and ensure
optimization with enterprise view
c. Ensure quick response with minimal customer impact via
automated system alerting
d. Negotiate service level agreements (SLA’s) with critical
success vendors
i. Introduce a managed partnership on key
performance indicators
ii. Coordinate bi-annual performance assessments
Consider the
benefits of new
fraud prevention Figure 10. Deliver reporting highlights to functional managers automatically.
methods in
conjunction with 8. Reduce on-us fraud: Few bankers know that technologies now
branch and teller
image capture.
exist to validate cashed checks and split deposits real-time at the
teller or back-counter branch
a. Identify fraud pain-points both operationally and loss related
b. Review current teller procedures and update for new image-
based processes
c. Implement real-time analytics and signature verification,
check stock validation for cash checks and split deposits
d. Investigate real-time payee name verification as an added
cash management process and extend to the teller/branch
e. Evaluate options to incorporate a recognition-based Payee
Name Verification (PNV) process at the teller line. This
approach may require integration by making issue files
available at the teller line.

11. Figure 11. Image analysis for fraud detection can be tightly integrated
with branch/teller.
9. Reduce deposit fraud: Probably the most difficult check fraud to
catch.
a. Select vendors now make hotlists available as a means to
identify deposit fraud
b. Create profiles of suspect transit accounts
c. Evaluate and improve analytic engines which can plug into
the process at various levels
d. Work with exchange partners to create reciprocal
agreements to identify fraud during Day 1 processing for
The opportunities quicker notification (inter-bank)
and timing couldn’t e. Identify remotely created checks
be better to f. Automatically identify missing endorsements on deposited
maximize your checks, streamlining teller procedures with Automated
investment in Endorsement Analysis (AEA) capabilities now available
branch and teller
image capture.
Figure 12.Example of unreadable endorsement. (Up to 20% of the volume)
10. Data mining: Misunderstood as being unethical, illegal and without
precedence, FI’s are driving customer acquisition and cross selling
by mining check image data

12. a. Read the payer from transit checks and create a database
of prospective customers
b. Compare the payee of existing customers to spending
habits and cross sell new services
Figure 13.Reading payer or payee can create targeted marketing lists.
11. Eliminate paper: Internal bank tickets are challenging to manage
and can be very expensive. Although teller image capture does
reduce some percentage of internal documents, the ideal scenario
would be to consolidate to a single document for branch or teller
image capture. The Universal Teller Document concept can
achieve this by assigning specific tran codes to “check boxes” on
the ticket.
Figure 14. Consolidate remaining over-the-counter tickets with the Universal
Teller Document. (Uses image-friendly design with dropout boxes.)

13. Conclusion and Migration Options
We’ve identified eleven major areas where financial institutions
can see significant benefits which translate into:
1. Cost reduction (maintain or drive down unit costs)
2. Efficiency improvements
3. Improved employee experience
4. Stabilized environment
5. Increased staff utilization
6. Collapsed processing windows
7. Superior decision making based on more informed
decisions
8. Fraud reduction
9. Revenue opportunities
10. Improved customer experience
11. Reduced paper, inventory control and cost savings
As the market continues to evolve in distributed capture, will your
organization settle with satisfied performance or strive for
excellence? The opportunities and the timing couldn’t be better to
maximize your investment in branch and teller image capture.
Feel free to contact Orbograph at info@orbograph.com or
joe.gregory@orbograph.com for support on any of these
concepts. Orbograph has extensive experience and provide cost
analysis models to help you quantify these potential benefits.
www.orbograph.com
Phone: 800-995-2502, Extension 5046