Changing Face of Remittance Processing, The

Both Processors and Vendors Quickly Adapting

The remittance processing industry is in transition. Advancements in technology, along with changing consumer payment habits, have shifted remittance from a high-volume, centralized process to one involving multiple payment streams, multiple workflows and multiple locations.

One advantage to the changes in payment processing has been the ability for companies to more closely examine all of their imaging and document management operations. Technology or infrastructure changes may be necessitated by electronic payments, ARC, Check 21 or other payment-processing options, however, these changes also offer an opportune time to review broader document processes.

"Never in the recent history of the check and ACH-processing have we seen as much turbulence as we see today," said Joe Keller, president of Solutran. "At the same time, we have never had as great an opportunity to create an environment that fosters the document electronification and the efficiencies it promises."

"The Check Clearing Act for the 21s1 Century (Check 21) has opened the door to potentially dramatic new processing efficiencies and the transaction-processing industry is working diliqently to create meaninqful new electronification applications that reconcile Check 21 with existing processing methods," Keller said.

"While Check 21 allows banks to take advantage of electronic check processing and distributed capture, it also may create liability concerns as it relates to image quality and usability," Keller advises.

The changes in payment processing have motivated a number of organizations to modernize their document processes. For example, the property records and revenue department at Ramsey County, Minnesota has been redefining its business processes, document management and payment processing operations. The county - home to nearly a half million people - has implemented document management and remittance processing solutions from Wausau Financial Systems (WFS).

In addition to being an integrated, image-based, two-pass remittance processing solution, OptimaS ImageRPS and OptimaSIMS is an enterprise-wide document management archive solution that captures, stores, and manages every document generated - paper documents, reports, application files, e-mails and Web content.

Currently, Ramsey County is receiving more than 500,000 payments, 200,000 documents, and 165,000 tax parcels annually- double the number of documents they processed just three years ago.

Prior to implementing the enhanced document management and payment processing solutions, Ramsey County struggled with property and tax processing management issues including space constraints, and repetitive and manual methods, impacting business efficiencies and costs. By deploying the document management and electronic workflow module, Ramsey County's once complex manual tasks to be automated and paper-free. This new process offers easy access to all related documents and simplifies the way assessors and other staff share, search for, and retrieve information saving time and money, ensuring "race to state" compliance and improving communication.

"Our volume has grown tremendously. Despite this growth, the processes and solutions in place have enabled our current staff to effectively perform their jobs and better serve the community," comments Frank Zobitz, business technology manager with Ramsey County. "For example, the treasurer's office isn't consumed with copying files, and this improves communication. Additionally, processing payments goes incredibly well resulting in approximately 99% of monies deposited the same day."

Kathy Strasser, archive product line manager with WFS explains, "The OptimaS IMS workflow module moves an electronic copy of a document across all touch-points within an organization. This allows the organization, Ramsey County in this case, to complete a process in a timely manner. For instance, if an employee is out for the day, the workflow module can re-direct the document keeping the process in tact - its automation serves as a huge time and money saver for an organization dealing with volume, deadlines, and cut-off times."

Susan Kennedy, Manager of Remittance and Document Processing at Discover Financial Services, cites the decline in check volume and the increase in outsourcing as the most notable changes over the past two years.

"As check volumes decline, unit costs rise, leading more companies to outsource the remittance operation," she said. "As industry initiatives such as ARC and Check 21 become more prevalent, companies are able to reduce the cost of paper transportation, and second-pass handling; collection float time is decreased, and returns come back faster."

While Kennedy attributes most of the check volume decline to electronic bill paying options available to consumers, she also notes that "Additional increase in postal costs may cause consumers to jump on the electronic bandwagon."

Moving Beyend Remittance

Technology providers, who have historically focused on remittance processing solutions, are expanding their product offerings to address the growing opportunities resulting from these changes. Further, these vendors see additional opportunities related to - and apart from-remittance.