At Constitution Corporate Federal Credit Union (CCFCU), the migration away from paper is an ongoing process. In 1999, CCFCU implemented an image-based item-processing platform with the help of Atlanta-based VSoft and so far has seen returns in increased efficiency and better customer service. Every year it takes advantage of new features and functions to yield further improvements.

With more than $1.8 billion in assets, CCFCU is a wholesale financial institution that provides investment and correspondent services to about 200 credit unions in the US, mainly in Connecticut.

At least 80 percent of the checks CCFCU receives daily are images of checks rather than paper, says Bill White, executive vice president at CCFCU.

Check processing involves multiple steps including capturing the deposits, recognizing the information on the magnetic ink character recognition (MICR) code line, correcting errors, and balancing the transactions. In a paper-based environment, the deposits are put into bundles and sent to a processing center; some of these are returned for re-processing. In short, all this paper leads to inefficiency for financial institutions and their customers alike.

Financial institutions are improving check processing by moving toward distributed capture enabled by imaging technology. They are in- stalling small scanners at teller terminals in branches, embedding scanners into ATMs, and putting them in merchant locations so businesses can scan checks on site.

Eager to take advantage of all the benefits distributed capture and image technology can of- fer, CCFCU chose the eDesk solution from VSoft. Utilizing Microsoft technology, eDesk is a fully integrated suite of check processing applications de- signed for a multi-instit-ution environment like CCFCU.

When CCFCU first migrated to an image-based solution, it immediately benefited by not having to archive checks on microfilm and store paper items on the shelf. Then when Check 21 came into effect in October 2004, VSoft’s eDesk solution enabled CCFCU to take advantage of all the opportunities offered by that law. By February 2005, branches of credit unions were able to stop packaging and shipping paper checks to be processed by CCFCU. Tellers were able to scan checks and send CCFCU an electronic file of their deposit. They could also send share drafts as electronic images. Meanwhile, CCFCU had the flexibility to monitor all incoming and outgoing files and change them as necessary in a secure environment.

CCFCU reduced costs by eliminating some of its high-speed sorting equipment and associated maintenance contracts. “We used to have two large 24-pocket sorters to process all the checks,” says Bill White, executive vice president at CCFCU. “We’re now down to one sorter and we’re using it very minimally right now because at least 80 percent of the checks we receive on a daily basis are images of checks rather than paper.”

Consumers ultimately have better service because capturing transactions electronically accelerates the movement of funds, and payees have access to their money sooner. Since errors are corrected much faster, the need to generate adjustments or notices for customers is eliminated. Credit union branches can stay open later, and they can extend the deadline for same day funds availability. Tellers can maximize their interactions with customers because they no longer have to spend the time inputting data; they can simply drop the checks into the scanner instead. Moreover, consumers have online access to CCFCU’s archive, which allows them to view the front and back of the checks they have written.

According to White, it takes about six weeks for a credit union to implement branch item capture by the time the equipment is ordered, applications are installed, workers are trained, and the system is tested. After credit unions go live, CCFCU has remote access to help them with issues as they arise.

Since Microsoft Windows is an accepted standard, it is easier for users to adapt to the new environment and for CCFCU to manage system administration. The Windows interface is readily intuitive to users, so it makes it easy to train operators both at the branch level and in the back office. Users have the flexibility to pull data from other systems to create extracts and reports.

“Microsoft traditionally has not been able to penetrate the back office of banks; that’s usually been big iron territory,” notes Vijay Balakrishnan, chief operating officer at VSoft. “What we’ve been able to do is deploy Windows technology in an environment where we’re processing fairly complex and voluminous transactions for multiple institutions.”

Over the years VSoft has provided CCFCU with a great deal of flexibility, White adds. VSoft is a growing company, and CCFCU believes it can grow along with them in the process.

www.constitutioncorp.org

www.vsoftcorp.com

By Sherree DeCovny