TIC Best Practices: A Branch Perspective stores/resource...TIC BEST PRACTICES: A BRAC PERSPECTIE...

TIC Best Practices:A Branch Perspective

Brian LoosPANINICopyright © 2012 Panini. All Rights Reserved.

Confidential 2 www.panini.com

TIC BesT PraCTICes: A BrAnch PersPective

Table of Contents

TIC Best Practices: A Branch Perspective

3 Executive Summary

4 Overcoming Myths

6 Focus on Customer & End User Experience

7 Business Process & Policies

8 SystemDesign&Workflow

10 Hardware&SoftwareDecisions

11 TrendingNow

12 Conclusions / Summary

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Copyright © 2012 Panini. All Rights Reserved.

ThismaterialmaynotbereproducedordistributedwithouttheexpressedwrittenconsentofPanini.



Executive Summary: WhilethedebateragesonforsomeinthebattleforBranchImageCapture(BIC)supremacybetweenBackCounterCapture(BCC)andTellerImageCapture(TIC),wenowhaveplentyofsuccessfulTICimplementations,andsufficientpracticalevidencefordefiningbestpracticeapproaches.

IndustrytrendsclearlyshowTellerImageCapturepickingupsteamwiththemajorityofnewbranchimagingprojectsfocusedoncapturingimagesatthetellerline.ThisincludesFinancial Institutions (FI) having never implemented a BIC solution, going straight to TIC as wellasFI’swhoimplementedabackcountersolution,nowseeingthebenefitsofmigratingtoafrontcountermodel.Thereareplentyofreasonsforthis,withthemostimportantbeingacompellingROI.AGlobalConceptsROImodelforanaverageFIindicatesanetsavingsforbackcountercaptureat.90centsperitemwhilenetsavingsperitemfortellercaptureis$1.35,thistakesintoconsiderationtheadditionalinvestmentrequired.That’sa50%gainperitem!Inadditiontoquantitativebenefits,aTICsolutionalsoprovidesimprovedcustomersatisfactionandisstronglypreferredbybranchstaff.WiththehelpoftheAiteGroup,PaninihasdevelopedourownextensiveROImodeltohelpyoudeterminefinancialbenefitsforyourorganization.

Evenwithallthebenefits,capturingimagesatthefrontcounterstillencountersoccasionalobjections,typicallybasedonmythsorconcernsthathavebeenprovenfalseinsuccessfulimplementations.Successhoweverrequirescarefulplanningoftheoverallsolutionrangingfromhardware&softwareselectiontosystemandworkflowdesignandeventobusinessprocessesandbranchpolicies&procedures.OurgoalinthispaperistohelpidentifyandeaseconcernssurroundingTICbyprovidinganinsidelookatwhatmakesTICsuccessfulfromthepointofviewofthegroupwiththelargestimpactandusuallythegreatestconcern, the retail branch.



Overcoming Myths:OneofthebiggestobstaclestogainingsupportforTellerImageCaptureareobjectionssurroundingthesolutionbasedonmythspropagatedduringearlyyearsofdistributedcapture.ThesecomefrommanydirectionsincludingtheRetailBank,ItemProcessing(IP)andevenseniormanagement.However,withsomanysuccessfulcaptureimplementationsatthetellerline,thereisnowstrongevidencerefutingtheseconcerns.Let’stakealookatthemostfrequentlyheardobjections:

Myth: TICtransactionstakealongertimetoprocess,whichwouldhavea

negativeeffectoncustomersatisfaction.

Fact: Over 90% of all teller transactions are 5 items or less. For these transactions, TIC has been proven to actually save time in comparison to branch studies done prior to TIC.

Myth:Requirestellertofocusonoperations,notsalesandservice.

Fact: Just the opposite is true; the teller no longer needs to be focused on documents for keying data such as account number, transaction amount, etc. Instead, this data collection is now automated and the teller actually gets to focus on the customer while the TIC solution is processing items. This allows for increased sales and service time, not less.

Myth: Capturingitemsatthetellerlinewillturnmytellersintoproofoperators.

Fact: With proper hardware, software and system configuration, tellers need to key a very small percentage of items. Also, for large item volume transactions where debits and credits don’t match, keying and balancing can be deferred to Item Processing.

Myth:TICrequiresanincreaseinbranchstaff.

Fact: TIC requires no additional FTEs in branch staff while providing ability to greatly reduce back office Item Processing staff.



Myth:Capturingitemsatthebackcounterislessintrusiveforourbranch

staffandthereforeaneasierprocessforthem.

Fact: Back Counter Capture adds work to your branch by introducing an additional step after the regular teller transaction. TIC integrates the capture of items into existing teller transaction workflow. Branch staffs having used both models prefer TIC by an overwhelming margin.

Myth:TheROIforTICisnotthere.Capturingitemsatthebackcounter

givesmethemajorityofcostsavingswithamuchlowerpricetag.

Fact: The ROI exists and has been proven by many FI’s. Many people feel transportation costs are the most significant area of savings. However, they are not considering other benefits of TIC including; reduced FTEs in Item Processing, decreased clearing costs associated with earlier clearing times, reduced proof correction costs, etc.

FI’sneedtoovercomethesebasicconcernsandrationalizefundamentaldifferencesandviewsofBranchImageCaptureexistingbetweentwogroupswiththemostexposuretotheproject:RetailandItemProcessing.ItemProcessinggenerallyprefersthebackcountermodelasitisasimilarworkflowtothecurrentprocess.Withthebranchscanningthework,thesortoperatormaybedifferent,butProofisstillkeyingandbalancingitems.Theyjusthavethebenefitofgettingthemsooner.Brancheshoweverdon’tlikethisapproach.Asmentionedbefore,theyjustseethisasadditionalwork.Theyarestillprocessingtransactionsjustasbefore,butnowtheyhavetheaddedworkflowofscanningthesetransactionsatalatertime.Thesenewresponsibilitiesalsocomewithoutanyrealbenefittothebranch. With a TIC model, capture processes becomes easier to accomplish by integrating workflows,whichmakesatellersoveralljobeasier.Endresult…thebranchsupportsTellerImageCapturevs.fightingBackCounterCapture.



Best Practices:

ThefollowingBestPracticeswillhelpyoucreateasuccessfulTICenvironmentandareallcurrentlyusedatFI’sthathavedeployedimagecaptureatthetellerline.

Focus on Customer and End User Experience:• CustomerSatisfaction:Intheend,thisiswhatreallymatterstothebranch.CustomershappywiththeirFItendtoconsolidatefinancialrelationships,allowingyourinstitutiontogainalargerwalletshareofservices.Whatmakesretailbranchcustomershappybesidesasuiteofproductsandservicessuitingtheirneeds?Howabout,fastefficienttransactions,andfriendlyandknowledgeablebranchpersonnelwithpropertoolstosolvetheirproblemorissue.

•Teller&BranchStaffSatisfaction: The ability to provide excellent customer service in the branchalsoreliesheavilyonbranchstaffjobsatisfaction.TICishighlypreferredbyalllevelsofbranchpersonneloverBCCasitallowsthemtodotheirjobmoreefficientlywithlesshassle.Providingeasytouse,intuitivesystemsandprocessesthatdon’taddextraworkarekey.Alsobeawareoflegacypoliciesandproceduresthatshouldbemodifiedtoconsiderthe TIC operating environment.

•OperationalEfficiency:Thereisafinebalancehere.Don’tmakethingstoocomplex,whichaddundueburdenandstress.However,itisalsopossibletomakethingsmoredifficultbyoversimplifying.Whatsomeseeaslessinvasiveactuallyismoresobythepeoplewhoneedtoperformthetask.Keepitsimplewhileprovidingtherighttoolsforthejob.



Business Process Improvement: • CohesiveDistributedCaptureStrategy:AlthoughmostFI’sstilllikeface-to-faceinteractionwithcustomersforrelationshipbuilding,gettinglargevolumecommercialtransactionsoutofthebranchisabenefittoboththebankandthecustomer.Thissimplifiesthelifeofbothstakeholders.Thisisespeciallytruewhenthebusinessdecisionmakerisnottheonebringingthedeposittothebranch.FI’sshouldhaveacohesivestrategyencouragingaholisticviewofTICandRDCevenifownershipoftheseplatformsliesindifferentfunctionalbusinessunitswithinanorganization.

• Emphasizeroutinescannercleaning:Imagingequipmentrequiresregularcleaningtoperformatoptimallevels.Thisisknownbyitemprocessingstaffbasedonahistoryofworkingwiththistypeofequipment;howeverbranchesarenotaccustomedtothis.Dust,paperparticles,debris,etc.affectthingssuchasMICRreadrates,CARreadrates,doublefeeddetection,imagequalityandwilldegradeperformanceovertime.Don’trelyontellerstoroutinelycleandevices;automatedtoolspromptcleaningonaregularscheduleandwalktheuserthrough the cleaning process.

• Don’tshortchangetraining: Proper training is a must and Teller training should be designed tooptimizetellercaptureefficiencies.Thisincludesnotonlydifferencesinsoftwareandtransactionworkflow,butalsohowtoprocessexceptions,howtooperateandcleanthescannerandhowtouseandrelyontechnology(noneedtosecondguesstheCARread,usethebatchfeeder,etc.)

Policies and Procedures: • New&existingprocessesrequirecarefulconsideration:Becarefulnottoaddprocessesminimizingefficiencyoraddingundueburdentotransactions.Thinkabouthowneworexistingprocessaffectsefficiencyofthetransaction,customer,andteller.Whatisthepurposeofthisprocessandisthereabetterway?Forexample,nottrustingthetechnology–scanningonecheckatatimeandverifyingeachoneevenifreadisgood,unduesupervisoroverrides, etc.

• PerformanceincentivesshouldsupportTIC:Don’tthrowawrenchintoefficiency;makesurebalancing,reversals,incentivesandperformancemeasurementssupportTIC.It’snotuncommonforateller’sperformanceandincentivestobeconnectedtobalancing.Mostoutofbalanceconditionsatthetellerlinearefoundeitheratthetimeoftransactionorwhenbalancingoutfortheday.WithoutTIC,tellerscouldfixtransactionsatendofdaywithoutpenalty.WithTIC,transactionscannotbereversedaftertheyaresenttoIP,whichcouldbesecondsorminutesafterthetransaction.Besureyourimplementationsupportsaprocessallowingthebranchtofixtransactionsatendofdaywithoutnegativelyimpactingateller’srecord.Don’tpenalizebranchstaffforusingnewtechnologythatsavesthe bank money.

•Trustthebranch:Retailbranchesdoknowhowtobalance;theyhavebeenbalancingcashforyears.Theyunderstanddebitsandcreditsandtheneedtobalance.Givethemawell-designedsystemwithappropriatepoliciesandprocedures,alongwithsufficienttrainingandsupportandtheywillsucceed.



System Design and Workflow Recommendations:• Noneedforabackcounterdevice:Alltransactions,regardlessofitemvolume,canbeefficientlycapturedatthetellerline.Thissimplifiesthetransactionprocess.Somebelievelargevolumeitemsshouldbedrop-and-goatthebackcounter.However,havingtwocompletelydifferentworkflowsisconfusingandcausesgreaterproblems.ThisapproachalsokillssomeoftheROIassociatedwithTIC.Backcountercapturetypicallyrequiresuseofinternalticketssuchascashinsandouts,G/Ltickets,andproofcorrectionsarestillgeneratedandmailedfromacentrallocation.

• Nolimitonnumberofitemscapturedatthetellerline: Even though all items are capturedatthetellerline,itemsmayormaynotbecapturedattimeoftransaction.Therearemanyvariableshereincludingnumberofitems,howbusythebranchis,speedofscannerused,commercialwindow,etc.Usuallythisisnotahardrule,butguidelinesaregiventotellersandtheyusetheirbestjudgmenttodeterminewhentoscanattimeoftransactionandwhentodeferlargevolumetransactions.AnFIalsomustdeterminehowlongatellershouldlookatanoutofbalancetransaction.Typicallythisislimitedtoeitheratimeframeorsizeofatransaction.Aslongascashisinbalance,considereffectontellerperformance.Ifadebitvs.creditoutofbalanceaffectstheirperformancereview,theywillcontinuetolook-nomatterhowlongittakes.Salesandserviceisstilltheirprimaryfunction.AllowthistypeofbalancingtobedeferredtoIP.

•TellerSystemIntegration: I have seen good system integration and poor system integration. This is one area really needing attention. It should not be looked at as whatiseasiestfromasystemsperspective(whatisleastcostlywaytointegrate),butwhatcreatesthemostseamlessinterface.Inessence,thetellershouldnotseeanydifferencebetweentellersystemanditemcapturesoftware.Also,tellersystemsshouldbeoptimizedforimagecapture.Oneshouldnotjustdropacaptureworkflowintothemiddleofanexistingtellersystemtransaction.SpendingtoolittletimeonthiscriticaldimensioncannegativelyimpactoverallsuccessofaTICprojectasitaffectscustomersthroughlongertransactiontimesandtellersthroughafrustrating transaction process.

• Captureanddatacorrectionworkflow:Oneofthelargestimpactsontransactionefficiencyishowimagesaredisplayedtotheuserandtheworkflowforhandlingexceptions.Ifdebitsandcreditsmatch(CARdiditsjob)andtherearenoMICRrejects,thenthereisnoneedforthetellertoreview,justmoveontohostpostingandreceiptprinting.Ifthereareexceptions,anefficientworkflowfordirectingtellerstofailedCARitemsorMICRrejecteditemsiscritical.ImageIPqueuescanbeusedasagreattemplateforefficienthandlingofexceptions.Misreadsaretrickier,butstillcanbehandledwithefficiency.



•Optimumdpmspeed:FI’smustconsiderefficiencyformosttransactionsvs.scannercost.Withthemajorityoftransactionshavingnomorethan5documents,speedismoreaboutcustomersatisfactionaseverysecondcounts.However,youdohitapointofdiminishingreturnsasoverallcapturetimeisaffectedbyPCprocessorspeed,availablesystemmemoryandsystemworkflow.MostFI’sexperiencediminishingreturns above 100 dpm on average transactions.

• CAROptimization:ForoptimizedCARreads,lookatbothCAREnginetuningandscannerhardwaresettings.Specialattentionshouldbegiventoformsdefinitionnotonlyduringimplementation,butasacontinualprocessasnewformsareputintouseeitherbydesignorfromacquisitions.Also,makesuretomapcash-inandoutamountsfromdepositticketstoreducetellerkeying.YoushouldalsoexperimentwithLARasithasincreasedreadratesincertaininstances.Fromahardwareperspective,althoughmostscanners’out-of-boxsettingsarealreadyoptimizedforthemajorityofdocuments,youshouldtestdifferentimagesettingssuchasDPIlevelsandgrayscalevs.bi-tonal.Eventhoughconventionalwisdomstatesbi-tonalimagesproduce the highest read rates, this is being challenged today as grayscale images in some cases are providing superior rates.



Hardware and Software Decisions:• SoftwareSelection:NotallsystemsdoagoodjobatTICassomevendorsputmoretimeandeffortintodesign.LookforsuccessfulimplementationsatFI’ssimilartoyourprofileandgoals.Speaktoreferenceaccountsandmakesitevisits.Findoutwhattheylikeanddon’tlike.Lookforbestpracticesapproachesfromthispaper;howdotheyhandleexceptionsprocessing,canIdeferscanningoflargetransactions,canatellerdeferkeyingandbalancingtocentralIP,howtransparentisintegrationbetweenthetellerappandcapturesolution?

• ScannerSelection:Defineyourpreferredscannerfeatureset.DoyouwantaMulti-FunctionSystemincludingreceiptprintingcapabilities?Woulditbebeneficialtohaveanembeddedmagstripereadertoremoveneedforaseparatepieceofhardwareatthetellerline?Whatspeedscannerisrightforyourbranchvolumesconsideringaveragetransactionsandpercentageofhighitemcounttransactions?Isthereapracticalusecaseforfunctionalitysuchasasinglepocketvs.twopocketunit?Paycloseattentiontofeaturesandfunctionsthatsoundgreat,butinrealityyouwouldnotuseordon’thaveanyrealeffectonoverallsolutionefficiencyorusersatisfaction.Anotherareaofconcernshouldbetotalcostofownership;productreliability,scalability,technologytoreducemaintenance,and consumableusefullife&costallhaveanimpactonoverallsolutioncostandshouldbecarefullyevaluated.

•Trustthetechnology:OnceyouhaveselectedtheappropriatesolutionforyourFIandtakentimetodesign,configure,trainandimplement,thenextstepistrustingthetechnology.Ifyoudon’t,inefficiencyandfrustrationwillprevail.



Trending Now: Although not as prevalent in TIC installations as other topics discussedinthispaper,thereareafewtechnologiesandprocessescurrentlyattractingalotofmindshare.ThesetopicsallhelpimprovethebusinesscaseforTICbyincreasingROIandsimplifyingprocessesorsupport.Theyareconsideredprogressivein nature but are proving to be relevant as technology behind TIC progressesintoamorematurestageofthesolutionslifecycle.

•Tosprayornottospray: An issue starting to gain attention is the actual need to spray trackinginformationonthebackofitems.ThisisalegacyIPpracticeandishelpfulinfindingoriginalpaperitemsifneededforrescanorverificationofinformation.However,somebankshavefoundcoststosprayitemsarefargreaterthananyadditionalresearchcostsassociatedwithnotspraying.InaTICenvironment,itiseasiertofinditemsthanincentralIP.Youwillstillhavealldatanormallysprayedonanitemattimeofcapture.Itcanevenbeappliedasavirtualendorsementontheimage.Sinceyouknowthedate,time,branch,teller,etc.itisnotdifficultforbranchpersonneltofindaparticularitem.Theyareonlylookingthroughasmallbatchofworkforonetellervs.IPwhichislookingthroughamuchlargebatchofwork.

• DeviceManagementSolution:WithaTICimplementation,youwillhavehundredsorthousandsofnewhardwaredevicestomanagedependingonthesizeofyourorganization.Thispresentsanewsetofchallenges,especiallyinsideretailbranchesunfamiliarwithmaintenancerequirementsofimagingequipment.Thistypeofsolutionhasmanybenefits.Firstitprovidesawaytomanagethesenewbranchassetsasyoucantrackwherephysicaldevicesarelocated,whatversionoffirmwareisinstalled,whatAPIisinuseandhowoftentheyarebeingused.Adevicemanagementsolutionshouldalsohavestrongperformanceoptimizationcapabilities.Createbusinessrulesforequipmentcleaningroutinesandprovidealertstoenduserswhencleaningneedstobeperformedwhiletrackingcompletion.YoushouldalsobeabletocollectperformancemetricssuchasMICRreadrates,paperjamincidents,inkusage,andconsumablewearwithanabilitytocreatealertswhenacriticalconditionexists.Trendanalysisreportingforuseinpreventativemaintenanceisalsoarequiredfeature.

• PaperlessReceipts: The continued move to a paperless branch eventually leads to paperless receipts. Whether these receipts are available through internet banking, email, orboth,leadingFI’sarestartingtoplanforthismove.Thecurrentcropofmulti-functiondevicesintegratingprintersintoscanningsolutionsprovideacosteffectivebridge to paperless receipts until your FI is ready.



Conclusion:TICcanresultinbettersalesandservice(fastertransactionsthannon-imageprocesses,moretimetobuildcustomerrapport and cross sell, etc.), and increased ROI (no internal forms,greatlyreducedproofcorrections,reducedprintingandmailing,reducedIPstaff,etc.).Aswithanysuccessfulproject,properplanningandeffortofyourTICimplementationcan result in better sales and service, and increased ROI.

RegardlessofwhetheryourFIhasdecidedtomakethemovetoTICoryou’rejustinterestedinexploringtheconcept,Paniniisheretohelp.Wehaveafullsetofproducts,services,andtoolstohelpyoumakethecorrectdecisionforyourinstitutionwhilehelpingyouachieveprojectsuccessandapositiveROI.PaninihasextensiveexperienceinTICwithover200,000tellerseatsdeployedtodateandimplementationsrangingfromtop5bankstocommunityfinancialinstitutions.YoucanbenefitfromouryearsofexperiencewithtoolssuchasourROI Worksheet and “The Compelling Case for Teller Capture”whitepaper.Ifyouarejustbeginningyourprojectorhavealreadyimplementedatellercapturesolution,youmaybeabletobenefitfromourCAR Optimization Services and Teller Image Capture Best Practices workshop.TalktoaPaninirepresentativetoday.Callusat937.291.2195orvisitourwebsitewww.panini.comtorequestadditionalinformation.

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