When we speak to financial institutions about issuing official checks in the branch, we often find that their current process is a manual one, involving pre-printed checks and a laser printer, dot matrix printer, or even a typewriter, believe it or not!. Sometimes the financial institution struggles to see the ROI in changing their process to an automated, secure MICR solution, since it involves an investment of capital to purchase the MICR hardware and software. However, a secure MICR solution actually saves money, and most of our customers see a solid ROI in less than two years.
What’s wrong with the current process to issue official checks?
- Pre-printed check stock is inordinately expensive, and it’s not just the cost of the custom stock. Pre-printed checks are live negotiable documents, which means they must be locked in a secure area, distributed and recorded carefully and securely. If there is a merger for example, the check stock must be destroyed and re-ordered.
- In a manual check-issuance process, the customer waits while a teller unlocks a drawer to access a pre-printed check, takes the information from the customer, walks away from the customer, prints the variable data on the check, and assuming there were no mistakes made, gives the customer the check and receipt. The process usually takes 8-10 minutes. If there were any errors made in the process, the customer waits longer while the teller starts over.
- The instrument most vulnerable to fraudulent activity is the paper check. It is the easiest mechanism to pilfer, forge, alter, duplicate and counterfeit.
What is the ROI of a secure MICR solution?
Because secure MICR solutions utilize blank check stock, the need for pre-printed checks are eliminated. The savings in paper costs alone exceed 80%. With a secure MICR solution, the time it takes to issue an official item is reduced by 75% from 9 minutes to less than 2 minutes because the check is securely printed on-demand. The static data and variable data are printed together in a single printer pass, and the teller never leaves the customer. By eliminating the need for pre-printed checks and engineering 15 distinct security features into our secure MICR solutions, our check-printing solutions virtually eliminate the risk of check fraud.
In addition to the benefits listed above, we have one customer who discovered that official check fees were being waived in the branches 82% of the time, so the institution was losing revenue. Our secure MICR solution gave the bank a way to track the fee dollars collected, which has increased 402%. The fee collection alone paid for the implementation of the hardware and software.
Check out this hypothetical ROI for a 25-branch bank, which shows a savings of over $500k with automation as opposed to manual process. Source Technologies can apply this ROI tool to your institution to show you the savings you’d see by implementing our secure MICR solution. Contact us and we will walk you through it.