Martin Ruda, Group Managing Director, The TALL Group of Companies

Martin Ruda
Martin Ruda

At the latest Cheque User Forum, hosted in London by the Cheque & Credit Clearing Company, a vision of the future of cheque clearing was laid out for an animated group of about 150 cheque professionals.

The potential for image based clearing, now an established feature of the landscape in the US, Brazil, India, etc. is gathering momentum in an environment still closing the wounds of credibility inflicted by the Payments Council’s U-turn on the proposed closure of the centralised cheque clearings, originally slated for 2018.

Common sense ultimately prevailed, and now that the industry is committed to providing cheques for as long as anyone wants them, attention turns to a more efficient, possibly quicker, and certainly technology-leveraged clearing solution.

As explained at the Forum, the UK should benefit from years of learning, and some mistakes, that other countries have experienced in the implementation of image based clearing (the US ‘Check-21’ truncation is a good example), and the technology is now not only better, but also becoming cheaper. The key to the processing benefits on offer is ‘collaboration’, and this will be a challenge in a UK banking sector where legacy systems, risk aversion and a cautious approach to operational change is the starting point for such an initiative.

Building Societies, whose typical customer is familiar with cheques and is unlikely to let go easily, can gain real operational advantages from branch capture of cheque images, and a number of examples exist today, including Hinckley & Rugby, and Ecology. To be ‘image-ready’, before truncation becomes a reality can deliver immediate benefits to reconciliation, customer service, banking processing and AML record keeping.

Notwithstanding the challenges of change, there is enough intelligence, enough collective ambition in the cheque clearing industry to ‘do a good job’, and the balanced view says image based processing can be made to happen.  With a new regulatory regime likely to impact the payments sector in the near term, a ‘version’ of the international models will very likely be put in place.