With a daily volume of approximately 300,000 checks per day, Deutsche Bank (Frankfurt, $1 trillion in assets) claims the leading role as processor of U.S. dollar-denominated cash letters originating from outside of the country. "The bank handles the transportation and the actual clearing and provides availability of funds to our foreign correspondents," explains George Stein, global head of check services, global transaction banking - cash management, Deutsche Bank.
With remote item capture and image exchange catching on, the bank's role of an intermediary has changed. "As checks dematerialize, physical location will become less important for banks using another bank's service," predicts Stein. "We plan to remain an intermediary for our foreign correspondents -- it's just the way we process the work that will alter."
Accordingly, Deutsche Bank intends to provide solutions that convert paper checks into images. "We are developing a remote capture solution which gives clients the capability to capture checks at their branch or at the first point at which checks are received," notes Stein. "The client can capture the check locally and transmit it to Deutsche Bank in the U.S., which will determine whether the check is eligible for an image exchange or substitute check."
The envisioned solutions will allow Deutsche Bank's correspondent bank clients either to capture checks at their branches using low-cost hardware, take advantage of existing item processing infrastructure or simply drop off the checks at the nearest Deutsche Bank hub. In order to accommodate the expected increase in correspondent traffic, the bank is expanding the presence of its hubs globally. "The client can capture the check locally or at the first point at which checks are received," explains Stein. "Deutsche Bank in the U.S. will determine whether the check is eligible for an image exchange or substitute check, and at that point, the bank expedites the clearing."
"Problems such as checks being lost in transit or delayed at customs or by the weather will now become issues of the past," adds Stein.