FIs urged to embrace change as cheque digitisation comes into force
Banks, building societies and their customers must fully buy into the digitisation of cheques, with the payment tool undergoing the most significant revamp in its 358-year history. That’s the view of Martin Ruda, Group Managing Director of The TALL Group of Companies, as the first phase of the Image Clearing System (ICS) comes into effect.
From today, the cheque clearing infrastructure will be in place to accept data and scanned images, in lieu of the actual paper cheque, and by the end of 2018 it is expected that all banks will be required to clear cheques on the image and data files alone. As a result, cheques will be ‘truncated’ (digitised) at the point of deposit, and will no longer be transported during the clearing process. The paper document will have no legal value once imaged and that image transmitted into the infrastructure, so the integrity of the digital image becomes fundamental to its use as the ‘instrument’ to achieve the funds transfer.
By agreement with their bank or building society, account holders will now be able to submit images of the cheque they intend to deposit via a desktop cheque scanner or a smartphone app. Following the full implementation of ICS, all items deposited on a weekday will be cleared by 11.59pm the following weekday. Earlier this month, delegates at The Third Annual Conference on Cheque Imaging and Remote Deposit Capture, hosted by The TALL Group of Companies and Digital Check Corporation, were told that banks and building should correspond frequently and efficiently with their customers regarding the changes, if they are to reap the full benefits of the new framework.
However, Ruda believes that, whilst many consumers are still unaware of the introduction of ICS, the new system will be successful in the long-term. “The digitisation of cheques has proven to be very effective across numerous countries for many years, and the long-awaited introduction of ICS is a significant event as the UK follows suit. With an emphasis on speed and convenience, we encourage banks and building societies to fully embrace the modernisation of the cheque clearing process, which will lead to increased efficiencies for the financial organisations as well as their valued customers,” he says.
“As the introduction of ICS has been on the UK’s agenda for a lengthy period of time, this has given the wider industry the opportunity to innovate and develop new services that can be utilised by banks and building societies to assist with the implementation of the new system. This includes scanner fulfilment management services, which covers logistics, customer service, software integration and exception management, as well as highly sophisticated solutions designed to protect financial organisations - and their customers from any attempted fraudulent activity surrounding the implementation and bedding in of the new clearing system.”