Check 21: A Service Advantage for Community Banks
Bank News › Vol. 105 Nbr. 3, March 2005
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Summary
Check 21 allows banks to present a machine-readable copy of a check, or a substitute check, for forward collection or return. By eliminating the need to have the original check in hand, all banks will benefit by saving billions of dollars in transportation, processing and storage costs, while gaining faster access to money. However, as substitute and electronic checks speed processing, consumer advocates have raised the concern that Check 21 will have a negative impact on bank customers. As community banks face increased competition from larger conglomerates, Check 21 presents an important opportunity for differentiation. By taking proactive service steps to minimize the negative impact of this legislation, community banks can leverage Check 21 to build greater customer loyalty. Their nimbleness and agility makes forging stronger communication ties to customers a manageable undertaking.
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Check 21: A Service Advantage for Community Banks
Introduced in October 2004, the Check Clearing for the 21st Century Act enables increased efficiencies and cost savings for banks and an outstanding service opportunity for community banks. In the past, tens of millions of checks required costly and time-consuming transportation for processing. With this transportation came a one- to five-day float that provided bank customers a short-term, interest-free loan.
Check 21 allows banks to pre...See the full content of this document
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