Banking Operations Strategies & Technologies: Example Scenarios
- Example One: Setting Up a Standing Order
- Example Two: Returning a Cheque.
1. Example One: Setting Up a Standing Order
Select a letter on the diagram to read a description of the process.
Whether in the branch, the call centre, or via electronic banking the customer needs to identify himself to the bank. He also needs to have the authority to confirm the creation of a standing order. The aim in all locations is for the customer to key as much data as possible hence the identification and authentication should be as automated as possible and should be consistent, based on a common ID and password. (It is also easier for the customer to remember).
In the Branch the customer creates the standing order via one of three alternatives –
- The customer can logon to his internet banking at a booth in the branch and key the standing order mandate directly.
- If the customer does not have an internet banking ID he can key the standing order into an electronic form using a PC in a booth in a branch and get it printed in the branch for signing. The branch staff would then email the form to the Account Maintenance processing centre for uploading (hopefully automatically) into the standing order mandate system. The branch staff would also scan in the signed mandate form and email to the Account maintenance centre for checking and filing. A similar approach would apply if the customer brought in an electronic form on diskette (see line D).
- A customer may have signed a paper form in the branch. The branch staff would scan in the form and email it to the Account Maintenance centre for processing and filing electronically.
In most cases the customer will create the standing order via electronic banking (internet banking) screens but it is possible that the customer does not have electronic banking facilities but has received the form via email (see line D). In which case he/she would email the electronic form to the Account Maintenance centre and print, sign and mail a physical copy. (This latter stage could theoretically be avoided if the customer had secure email but such a sophisticated user almost certainly has electronic banking.)
The call centre will try to email the form to the customer or send them a diskette with the form on. Failing this they will, as now, send a paper mandate form in the post for completion by the customer.
All letters and/or paper forms requesting standing order setup will be image copied in the mail room and forwarded to the Account Maintenance centre for processing and filing electronically.
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2. Example Two: Returning a Cheque
The diagram below and the subsequent explanatory text describe how voucher image exchange would work. The example concerns a Mr. Smith who has an account with “Bank A” and who pays in a cheque to his account drawn on “Bank B” which is subsequently returned. In the explanatory text, normal typeface represents the hypothetical use of image exchange and italics the way it works at present.
Mr. Smith banks with Bank A and presents a cheque and credit slip at the Small Town branch of Bank A. The cheque is drawn against an account at Bank B. The cheque is scanned in as an image and the code line read; both the code line data and the image are stored in the central computer system of Bank A. Currently many banks perform this image capture but additionally Bank A (along with every other bank) physically sorts the cheques into piles corresponding to each of the clearing banks, often in a branch. The cheques are physically transported to a central location where they are amalgamated with cheques presented in other Bank A branches.
The computer systems of Bank A sort out the electronic records that correspond to Bank B (both codeline data and cheque images) and send them as an electronic file to Bank B. Currently all the cheques are physically sorted out and put into vans to be delivered to Bank B (Some banks exchange electronic codeline data, these are called IBDE files).
Bank B will process the codeline data against their accounting systems. Note there is no in-clearing function at Bank B as there is no need for it. Some of the cheques will need to be scrutinised (e.g. to confirm the signature is correct, the amount in numbers and words correspond, etc.) One would expect that these procedures would be carried out using the electronic images of the cheques rather than the physical vouchers themselves. Currently there is a large and expensive operation in all banks to sort and read the cheques drawn on its accounts by other banks, this is called “In Clearing”. This mostly duplicates the processing already carried out as part of the data capture in “Out Clearing” in Bank A. Furthermore, the scrutiny procedures have to involve a physical inspection of the actual voucher if there is no electronic image copy. This need for access to the voucher, in conjunction with the in-clearing and returns processes involving physical vouchers, constrains where and when work can take place.
In this example, Bank B discovers a reason to return the cheque to Bank A. This is effected by another electronic file with the codeline data plus a reason for return (e.g. account closed).Currently Bank B has to physically sort out the cheque for returning to Bank A and then put it onto vans for delivery.
In parallel with the electronic file transfers described in B and C the cheque is physically sent to a central storage location in Bank A.
The computer system in Bank A, upon receipt of the electronic returned cheque notification, from Bank B will carry out a range of actions depending on the cause of the return; it could
- Un-credit Mr. Smith’s account with the amount of the cheque
- Re-present the cheque to Bank B electronically
- Charge Mr. Smith
- Prompt an operator to make a telephone call to Mr. Smith
- Prompt an operator to return the cheque to Mr. Smith
We expect those actions that require human intervention to take place in a Central Returns Function. Currently, the returned cheques are physically sorted re-read and then actions are taken, i.e. yet more manual handling.
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