Are You Ready for Truncation?
Contact Innovations specializes in the design, development and implementation of cost effective software solutions in the area of financial transaction processing.  CI has developed a number of PC workstation based applications that streamline workflow by automating the traditionally manual, labour intensive processes requiring specialised knowledge workers. The thrust of these applications is to make effective, efficient use of computer based technologies in processing traditionally paper-based financial transactions.

Many of Contact Innovations’ clients such as; Intesa Bank, Kawartha Credit Union, Pace Credit Union and more, have already deployed CI’s solutions and are ready to participate in a full truncation environment.  Many more of our valued clients are using image capture in order to provide their members with image statement and cheque images via the web.

Our software applications incorporate digital imaging technology to render paper based documents into a digital equivalent. Our applications also incorporate the latest in intelligent image, MICR and optical character recognition, workflow, image retrieval and routing, as well as mass media storage and distribution. Installed throughout the world, these applications have helped our clients to streamline mission critical processes, improve productivity, reduce loss and achieve significant savings in operating costs.

Contact Innovations is the recipient of numerous awards including ScotiaBank’s prestigious 'National Award for Service Excellence'.

Are you ready for Truncation?

What is Truncation?

How can I prepare for TECP?

Software suited to your needs

Vision for the Future with TECP

Exceptional addition!

 Internet Links:

   OCBC Bank  Truncation FAQ

   The Canadian Payments Assoc.

What is Truncation?
The Dictionary defines truncation as to "trim, shorten or abbreviate."  A Truncated Cheque is one which is truncated during the course of a clearing cycle, either by the Clearing House or by the Bank.  This applies whether paying or receiving payment, and takes effect immediately upon generation of an electronic image to be used for transmission. This serves a key purpose of substituting the further movement of the physical cheque with the electronic equivalent.  The electronic equivalent is thus utilised as legal representation of the original physical cheque.  In summary, a truncated cheque is:

• an electronic image of a paper cheque.
  
• only the Banks involved and the Clearing House can truncate a cheque (i.e. create an electronic image of a cheque). 
  
• The electronic image of the ‘truncated cheque’ will legally substitute for the physical cheque from the point in time of truncation onwards.

Under the concept of truncation, the electronic image will then replace the physical cheque in all future processing and correspondence.

Under current clearing processes, approximately six million cheques are exchanged between financial institutions (FI’s) every business day.  Each cheque must be routed from the branch that accepted it on deposit, via regional data centres, to the payor FI branch holding the account on which it is drawn (or the unit of the payor FI that acts on behalf of the branch).  After receiving the cheque, the branch of account decides whether it can be honoured or must be returned for various reasons such as insufficient funds or a forged signature.

In the Truncation and Electronic Cheque Presentment (TECP) environment, the actual cheques and other paper payment items will no longer be exchanged through the clearing system.  Instead, images of the cheques will be captured electronically, which can be easily accomplished using Contact Innovations’ “ImageArchive” application.  Along with the MICR-line data identifying the account number and other key data, these images will then be transmitted to the FI holding the account or it’s clearing agent, replacing the physical cheques in the clearing system and assuming their official legal status.  The original cheques will be destroyed after an appropriate retention period.

This shift to electronic exchanges in the clearing system will not only increase efficiency by speeding up the process; it will also enable service improvements for Financial Institutions and their customers.  For example, the ready availability of cheque images will make tracing requests much simpler and faster for FI staff.  Although physical cheques will no longer be returned to customers, images will also make possible a range of new client services.   FIs may offer customers on-line access to images of their own personal cheques and cheques on deposit for corporate clients as part of their Internet banking service, or include with the customers’ regular monthly statement a printed version of all images in a compact, convenient format. All of this and more are made possible when using Contact Innovations ‘ImageArchive’ applications.  

It is important to note that full national implementation of TECP is targeted for late 2006.

How Can I Prepare For TECP?
It is important to exercise your right as individual FI’s and obtain all necessary information on the subject.  This includes asking questions such as,

• What are the benefits to me as a financial institution?
• How much will this cost me or more importantly how much will I save?
• If I am already able to capture images and data why must I still courier cheques to any location?
• Is TECP delivering on a full or partial truncation solution?

These are just a few of the questions that you as FI’s should be asking in order to be completely informed on all aspects of this new process and what it means to you as individuals.

This has been a brief introduction to the TECP project and we encourage you to gain as much knowledge on this subject as possible, and we would like to help.  So, if this newsletter has sparked any curiosity into the TECP project, stay tuned as more information will be available in our next edition to be coming shortly!

Software Suited For Your Specific Needs;
Getting prepared for TECP is easy; simply contact your nearest reseller for details on Contact Innovations’ ImageArchive and you’re well on your way there!

Contact Innovations’ image-oriented solutions for Financial Institutions consist of a series of customizable software modules: ImageArchive Cheque, IA WebView, IAEncode, ImageStatement Extract, and ImageStatement Print.  The ImageArchive product family is an easy-to-use, scaleable desktop or client/server imaging system, providing streamlined services for processing, archiving and retrieving financial documents.  ImageArchive is a cost-effective solution that saves time, reduces storage space, increases productivity, provides safe, long lasting storage of vital data and makes it quick and easy to find information.  It makes fast, easy and affordable electronic documentation, retrieval, management and storage a snap.

Rest assured that Contact Innovations will be ready for TECP, providing the necessary interface to interact with all specifications needed upon implementation.

Vision for the Future

Following are a few links to additional information discussed in this newsletter:

·  Contact Innovations Value Added Partner Listing

·  Product Brochure for ImageArchive Check

·  Product Listing for ImageArchive Check

·  Product Brochure for ImageArchive Statement Printing

·  Product Brochure for ImageArchive WebView

This concludes what I hope you'll have found to be an interesting and informative issue.  Contact Innovations is committed to providing you with the information you need in order to make an informed decision about the implementation of TECP in your environment.  If you have additional questions regarding this newsletter or other matters of interest regarding transaction processing, I would be very pleased to speak to you.  

Best wishes for 2004!

Mike Copeland

Account Manager
Contact Innovations
(416) 784-5191 Ext. 222
mcopeland@contactci.com

Check out this Exceptional Addition!
IA WebView is Contact Innovations’ latest addition to its revolutionary suite of easy to use ImageArchive products.  Combined with your existing internal or third-party Internet-based electronic client services, WebView provides the tools necessary for any financial institution or transaction service provider to display check images over the World Wide Web.

• Within minutes of capturing images of returned/cleared items through ImageArchive's Professional or Limited image capture application, WebView technology allows clients to view items online using an Internet browser such as Microsoft Internet Explorer or Netscape Navigator.
  
• Internet Browser-based check image delivery eliminates the traditional paper-based approach to sorting, mailing or faxing client statements and cancelled checks.
  
• With ImageArchive WebView in place, clients will be able to retrieve and view their checks online in minutes instead of the weeks or months associated with microfilm based technologies.

Please contact us today for additional details on this exciting new addition to the the ImageArchive line of products!