Check 21 May Lead to Efficiencies at the ATM

COLUMBUS, Ohio - The item processing advantages of Check 21 have been heralded for months now, but there could be other benefits. At Corporate One Federal Credit Union's ATM Users Conference held recently, one payment systems exec pointed out ATM efficiencies as another major benefit of Check 21. Peg Bost, director of financial industry marketing for Diebold said deposit automation at the ATM is the second largest benefit to be gained by financial institutions as a result of Check 21. She said ATMs featuring deposit automation can capture images of deposited checks and validate currency, scan the MICR line of check(s), read the amount of the deposit, display images of the items on the screen, and print images on receipts. Deposit automation at ATMs is expected to improve service levels and reduce handling costs and fraud, while allowing branches to focus on their core competencies of providing financial advice and cross-selling, said Bost. A TowerGroup study noted that of the 160,000 full-function machines owned by banks, less than 40% will be enabled with deposit automation capabilities by 2010. TowerGroup estimates that the largest banks will probably convert 60% of their total ATM fleet by 2009, while smaller institutions will convert a smaller percentage of their machines. Bost also made an interesting analogy about the lack of revolutionary improvements in ATM functionality over the last few decades. "Anytime a three-year-old child does the littlest thing right, we stand up and applaud," Bost said. "Unfortunately, the financial services industry treats ATMs much the same way. They facilitate withdrawals and balance inquiries and that's about all we've expected from them for 30 years. They're actually more like 30-year-old college students than three-year-olds, and we ought to expect more from them." Bost noted that ATMs are well suited for withdrawals, but traditionally have limitations when it comes to handling deposits. Traditionally, credit union members making deposits at ATMs face earlier cutoff times, stricter funds availability, and inferior confirmation of the deposit amount than if they conducted the deposit with a teller. She said deposit automation at the ATM could remove these negatives. Corporate One's ATM Users Conference, a one-day forum covering issues affecting credit unions' ATM/debit card programs, featured speakers from Diebold, NCR and First Data Corporation.