What are Some Benefits of Automating Official Check Printing? -- Source Tech

There are many contributors to the overall payback, but three primary areas of benefit jump out when considering whether to implement on-demand check printing in the branch: Opportunity cost, back office cost, and fraud:

• Opportunity cost. We have completed branch time studies for a number of clients which indicate that it takes a teller anywhere from four to seven minutes to manually issue a check or money order, versus less than a minute with an automated process. Throw in time spent logging, reviewing logs, processing voids, and researching missing items- all of which goes down significantly- and the time savings for MICR check printing start to add up. But in a small branch it is not likely to add up to an FTE, and in any case, reducing teller headcount doesn't make sense in today's competitive branch environment.
  
  The best way to quantify the time savings is to consider how much additional revenue tellers could bring in if they were not manually issuing or cleaning up after checks, and instead spent that time up-selling or cross-selling. This recaptured opportunity cost is worth even more when the value of new product sales is annualized as part of an ROI, and will often justify the project with no other savings needed.
  
  
• Back office cost. When considering MICR check printing, financial institutions often look at just the branch costs and potential savings, but this is just the tip of the proverbial iceberg. Check processing and posting, exception item processing, reconcilement, accounting, check inventory maintenance, and excessive auditing are among the processes that go into supporting manual official check issuance. This is truly non-value added labor, and because much of it is centralized, it can typically be cut or reallocated. Another hole to be plugged is paid-unadvised charges to your 3rd-party processor for improperly logged issuances. PUA goes away with the right disbursement control as part of a MICR check printing system.
  
  
• Fraud. According to the Federal Reserve, official check fraud costs US financial institutions an average of 24 cents per check. If you are doing better than that, congratulations. If you are doing it with manual processes, you are probably spending way more than necessary on your controls. In either case, official check fraud is a blind spot on your risk management processes that can be eliminated. Properly implemented, the right combination of hardware and software will give you centralized control and visibility over official check issuance across the enterprise.

While this discussion has focused solely on the branch, a comprehensive disbursement/MICR check printing system can be extended to other departments as well, including consumer and commercial loan, mortgage, and trust departments, plus AP and payroll check issuance. All of these areas can contribute to a hard-dollar ROI.