Citizens Bank moves forward into the new era of consumer payments

Photo by Dave Boyd John Bentley (center), an Assistant Vice President at Citizens Bank, manages the check processing area and its new check processing equipment. Pictured with Bentley are Wendy Fox, a Customer Service Representative in the bank's electronic banking department, and Rick Winkle, an Assistant Vice President, whose duties include managing the electronic banking function, the Internet banking service and ATM network services.

By Greg Miller
STAR STAFF
gmiller@starhq.com

   When terrorists attacked the World Trade Center on Sept. 11, 2001, they made a big impact on the nation's banking system.
   The nation fought back, and last year, Congress passed the new Check 21 legislation. That legislation, according to Scott Greer, COO and CFO of Citizens Bank, will allow the Federal Reserve and member banks to be able to exchange digital images of checks, as opposed to the physical checks. "This will greatly improve the efficiency of the system," Greer said.
   John Bentley, an assistant vice president at the bank, manages the check processing area and its new check processing equipment. "All of the checks that we receive throughout all of our branches come into the centralized area and John's department captures those checks through a machine that takes the picture, the image of those checks, then that image is made available to customers through the Internet, by CD Rom and by printed images of the checks that we'll provide with statements," Greer said.
   "Once those images are captured, then there are numerous ways those can be used to benefit the customer and give ease of access to the customer..."
   The Check 21 legislation, Greer says, means that "We'll be exchanging those images with other banks, as opposed to physically delivering the physical check to the airport to be flown to the Federal Reserve, then flown all over the country to whatever bank those checks could be drawn upon.
   "That is something that Congress and the Federal Reserve really want accomplished, subsequent to Sept. 11. Due to the airplanes being grounded after 9-11, checks were unable to be moved around the country between Federal Reserve Districts because of all the planes being grounded. This is a significant benefit and cost reduction due to the goal of eliminating the airplanes moving those checks around.
   "We'll be providing those checks to all customers over our Internet banking," Greer said. As the check imaging services are implemented following the passage of Check 21, Assistant Vice President Rick Winkle "will be providing the ability to give customers access to their checks on CD Rom.
   "For example, for commercial services, commercial accounts where they have a large number of checks on their account, say 1,000 checks per month, instead of having to go through all of those physical checks manually, they can receive images of all those checks on a CD, put that in their computer, type in a check number, and it pulls it right up. It speeds their research as a business.
   "We've been providing that service to business customers for about two or three years, and they really like the speed of access for researching items on CDs. We're just going to be able to expand that service more with the new technology we're implementing."
   Winkle manages the electronic banking function at Citizens Bank, manages the Internet banking service and ATM network services. He also manages other services for businesses, such as commercial cash management services, merchant services, credit card services and check card services.
   "Wendy Fox is a customer service representative in our electronic banking department," Greer said. "Wendy comes out and will meet with business customers regarding cash management services, that is a treasury management function for businesses, to help them make the most benefit from their cash."
   A new optional service set to be introduced next year is a periodic CD Rom with all of the customer's statements and check images. "In addition to their monthly statements, customers electing this service will receive a CD with all of their account information for the selected period," Greer said.
   "They may want to provide the CD to their accountant for easy access to information needed to prepare their tax return or just simply save it as a convenient archive of their financial information."
   Many customers, Greer said, "are asking for ways to reduce the amount of paper they have to store. Citizens Bank is already providing customers access to their account statements by our Bank-By-Net Internet banking service. "
   Later in 2004, customers will be able to elect electronic statements where their statement will be delivered via secure e-mail or the Internet instead of in paper form. This will be an option for those customers who want it. We will, of course, continue sending paper statements to those customers who do not elect the new service.
   "Another change that some of our customers are asking us about is when a retail store cancels their check and gives it back to them at checkout. This is a process called 'check conversion.' Many retail stores are in the process of implementing check conversion to lower their costs of handling paper checks.
   "With check conversion, when the customer pays by check the store converts the information on the check to an electronic transaction. The check is canceled and returned to the customer by the store clerk. The amount of the check is charged to the customer's account electronically. Instead of taking the physical check to a bank where it would be converted to an electronic item under Check 21, the store is simply converting it at the point of presentment by the customer. This saves the store from having to physically deposit what may be thousands of checks per day."
   Greer says these changes "reflect the changing payments landscape in the United States. According to the results of the Retail Payments Research Project conducted by the Federal Reserve in 2001, checks written in the U.S. grew from 32.8 billion in 1979 to 42.5 billion in 2001. However, during this same period electronic payments grew from approximately 5 to 6 billion to 29.5 billion. Checks have declined from approximately 85 percent of non-cash payments in 1979 to 59 percent in 2001."