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Like all high-performance organizations, this global bank can see—and seize—unexpected opportunity.
Needing to comply with the new Check 21 protocols, the bank worked with Accenture to create a superior electronic image exchange facility that will dramatically reduce the time and cost associated with clearing checks.
The client is one of the world's largest financial institutions, providing individual consumers, small businesses and large corporations a full range of banking, investment, asset management, and other financial and risk-management products and services. In 2003, the bank reported revenues of more than $30 billion. Upon completion of a recent merger, it will serve more than 40 million customers in 35 countries.
In October 2004, The Check Clearing for the 21st Century Act (also known as "Check 21") went into effect. This law heralds the most profound change for the US payments industry in years. In short, Check 21 allows banks to clear checks electronically. This means they no longer need to incur the high costs associated with physically transporting paper checks. Under the law, banks are free to enter bilateral agreements and engage in electronic exchange of "substitute checks"—or image replacement documents (IRDs) that are replicas of originals. The law is expected to spark the broad exchange of digital check images between banks and save approximately $2 billion annually in reduced transportation, float and other check processing costs.
The enactment of Check 21 presents a significant cost-saving opportunity for our client, which captures a significant percentage of checks issued in the United States each year. It also presents a significant challenge. To prepare for check truncation and image exchange, the bank needed to be able to convert checks to images, receive image data and manage the image data across the enterprise.
Because this client was heavily involved in managing activities associated with its ongoing merger activities, it simply did not have the depth of resources needed to deliver the electronic image exchange capabilities demanded by Check 21. It recognized the need to tap external resources to complement its internal Check 21 team. Its partner in this endeavor needed to meet several criteria, including a deep understanding of Check 21 processes and technologies, proven experience helping payment industry players adopt to the new law and a commitment to working as part of the bank's team. Accenture—which had helped this client implement a number of improvement efforts over the past 20 years—was the logical choice.
Accenture quickly deployed a team of highly skilled resources to help the bank supplement its Check 21 program. Specifically, Accenture is involved in three areas:
With Accenture's help, our client is establishing superior electronic image exchange capabilities. These capabilities will dramatically reduce the time and cost associated with clearing checks. It is estimated that, when fully rolled out, electronic image exchange will save the bank more than $100 million each year. By reducing its cost structure so significantly, the bank will be in a good position to pass these savings to its customers.
Accenture is heavily involved in bringing this client's image exchange capabilities to life. Equally important, Accenture is serving as a trusted partner and team resource, thereby allowing the bank to focus its own resources on merger activities and other high-performance business initiatives.
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