A Case Study
Submitted by: Steve Whitney, Risk Manager, Norway Savings Bank
Steve Whitney of Norway Savings Bank was tasked with implementing Remote Deposit Capture at the bank, he has agreed to share what he learned as detailed below.
About the Bank
Founded in 1866, Norway Savings Bank is a leading mutual banking and financial services company headquartered in Norway, Maine. As of September 30, 2008, Norway Savings Bank had $918 million in total assets and provided financial services through 21 branches and over 200 ATM locations to over 30 thousand households in western and southern Maine. Norway Savings Bank operates divisions in asset management, personal and business banking. In 2007 and 2008, Norway Savings Bank was recognized as one of the Best Places to Work in Maine by the Society for Human Resource Management's Maine State Council. For more information, visit http://www.norwaysavingsbank.com/.
The bank offers a full range of consumer banking products and we are working to improve our business/commercial product line. We added a Cash Management Specialist, Becky Toothaker about a year ago to assist with our commercial product line expansion. Our core processing system is ITI with our Item Processing outsourced to FISC Solutions.
Selection Process
When choosing a merchant capture product, it was essential to consider ease of use since we knew it would be customers using it, not banking experts. We wanted the product to be easy to install, and very easy to use. While NSB looked at a few products and vendors, we ultimately chose FISC Solution's RDC product, FISCorporate™. FISC's product is web based, which is excellent for expedited installation and less costly than other PC based products. In addition to the product, the vendor we chose needed to meet certain criteria. For example, we wanted to work with a vendor that underwent a SAS 70 audit regularly and that has the appropriate controls in place; was experienced and knowledgeable with banking; and gave us competitive pricing. FISC met these criteria. Since the bank was already experienced with FISC's image cash letter service and their high level of customer service, choosing FISC made sense for our needs.
With FISC's assistance, the software was branded to look and feel like the other products the bank offers its commercial clients. FISC offers online ordering which has facilitated ordering of the Panini My Vison X scanners. These scanners have been successful and we like that a maintenance plan is available.
Implementation
It's important to choose your first customer wisely. You should consider a pilot customer who is trusted, and more importantly is willing, patient and loyal! While our conversion went very well, the transition was new for the bank so we developed our process as we went. Because we chose our pilot wisely, we did not encounter any significant implementation problems. The bank worked with an attorney with cash management
experience to develop an effective Merchant Capture Agreement. A comprehensive agreement is critical, to ensure that the roles and responsibilities of both parties are clearly understood. And, given the relative novelty of merchant capture, and the liabilities that the bank incurs in offering the product, it is important to work with an experienced attorney.
Following are key components to consider when completing your agreements:
- Address who is responsible for maintaining the hardware (scanner?, PC?)
- Point out that the customer is responsible for sending a balanced file
- Outline the retention timeframe for the original checks; the need to secure the checks until destruction;, and that the merchant is responsible for ensuring that no duplicate items or files are submitted;
- Provide a basic description of Image quality and ANSI requirements;
- Address the funds availability of the items submitted via Merchant Capture;
- Describe the contingency plan, in the event that merchant capture is unavailable (due to equipment, network or internet failure);
- Explain the applicable Check 21 Warranties and which party is responsible.
Customer Qualification
RDC has overall been a successful venture for our bank. We believe the success was due in part to our strategy in choosing the right vendor, rolling the product out to the right customer, and carefully establishing our rollout process. One key decision we made early on was that we would adhere to "know your customer" principles in offering merchant capture. In fact, Merchant Capture has been described as "one of the three hottest exam topics" (along with VOIP and web application security). We found through our risk assessment process that the customer agreement is "key" along with security of the website and transmission process. We believe that it will be important to be able to show our examiners the process that is in place.
Conclusion
Choosing to move forward with remote deposit capture was the right choice for our bank. We have included RDC in our cash management toolbox and it has proven useful as a retention tool, and an incentive to attract prospective customers.
RDC Solutions include:
Item Processing Solutions Include:
Request More Information
|