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 CAR
Engine Courtesy Amount Reader (CAR) - Intelligent character recognition
(ICR) software that locates and then reads the courtesy amount of the
check - the number printed in numbers on the upper right side of the check
(for example, $34.95).
Cash
Letter - Outgoing cash letters are bundles of checks organized by bank
and the wrappers that summarize the content of each bundle. These bundles
are sent out to the local Federal Reserve branch each night to be forwarded
along to the banks on which the checks were drawn. Incoming cash letters
are the checks that arrive at a local bank after being forwarded from
the Federal Reserve each night.
Cash
Management - The handling of information, usually check amounts and images.
Traditionally, this was done by providing the customer with reports and
statements to help them understand the flow of their money. Until recently,
the expense of providing cash management services was considered just
another cost of doing business for banks. Recently, banks have been looking
for ways to provide better cash management services as a way to keep old
customers, attract new ones or to generate new revenue. Thus, the movement
towards image statements and CD based statements.
Cash
Treasury Management Functions - Collection management and disbursement
of funds.
Check
Truncation - Process of destroying checks shortly after they have been
imaged. Shredding the check after capture saves all the expense incurred
by moving and storing all those annoying pieces of paper.
Consolidator
-- a model of EBPP in which bills are collected from many billers, aggregated
into a single service, and presented for viewing and payment through a
single web site.
Coupon
-- see stub
Courtesy
Amount - The numeric amount field on the upper right side of a check in
which the customer usually prints the amount as a dollar and cents figure,
for example, "$14.22." Also called the convenience amount.
Direct
Model EBPP -- A form of EBPP in which a a biller delivers the bill to
customers via its own Web site, or via a third-party's site. Using this
method keeps control of the biling information in the hands of the biller,
but it forces end users to log into a different web site for each bill
they wish to view and pay on line.
EBPP
( Electronic Bill Presentment and Payment). Using the internet or e-mail
to present bills and collect payments.
EDI
(Electronic Data Interchange) An older form of electronic communication
of business transactions. EDI established a rigorous format for exchanging
trade-related documents including purchase orders, invoices and
Electronic Funds Transfer (EFTs) in a standard format. Fairly expensive
to implement, EDI has largely been suplanted by much cheaper XML based
communications standards.
Exception
- A transaction that cannot be handled by the usual automated processes.
Typically exceptions are handed over to human intervention for resolution.
Excepetions are exprensive to resolve and most systems strive to reduce
exceptions to bare minimum.
EFT
(Electronic funds transfer) - electronic
payments made via an Automated Clearing
House (ACH). Much more common than EBPP, EFT systems take care of the
payment end of billing allowing payments to be made on-line.The Federal
Reserve's Fedwire and MasterCard's Remittance Processing System (RPS)
are two examples. EFTs may also be made directly to a merchant (point-to-point)
by transferring data directly to the merchant (by fax, tape or modem)
with a single, aggregate ACH or wire transfer payment. Long touted as
the future of banking, EFT/ACH has not yet taken off as fast as was predicted
and thus remains a relatively small component of the flow of cash in America
today.
Electronic
Check - Electronic replacements for paper checks. In an electronic checkbook,
pens and signatures are replaced by signature card functions and digital
signatures and stamps and envelopes by electronic mail or other communications
options such as the Internet.
Encoding
a Check - Entering the amount of the check into the MICR line at the bottom
of the check.
Enhanced
Electronic Check Presentment (EECP) - In this approach, paper is captured
via image technology at the bank of first deposit. The check's code line
and the image are separated. The code line is transmitted via ECP to the
paying bank or the Federal Reserve. The image is forwarded separately.
ECP is the non-image enhanced version of EECP in which a physical copy
of the check follows the transmittal of the code line.
Exception
Item Processing - Exception files are the notes each bank creates daily
indicating problem items including NSF (non-sufficient fund) items and
invalid checks. A check imaging system can significantly speed the process
of handling exception files by automatically locating the image of each
exception item and displaying it in sequence along with a notation about
the problem to the officer/operator to view and decide which items to
pay or return.
Federal
Reserve - The central bank of the United States. The Fed comprises a seven-member
Board of Governors in Washington, DC, twelve regional Federal Reserve
Banks, and their 25 branches. The Fed carries out various system functions,
including operating a nationwide payments system, distributing the Nation's
currency and coin, supervising and regulating member banks and bank holding
companies, and serving as banker for the U.5. Treasury.
FedWire
- The electronic funds transfer network operated by the Federal Reserve.
FedWire is usually used to transfer large amounts of funds and U.S. government
securities from one institution's account at the Federal Reserve to another
institution's account it is also used by the U.S. Department of the Treasury
and other federal agencies to collect and disburse funds.
IBAC
- Unhappy with the image quality of TIFF, IBM created its own proprietary
check image format. IOCA (Image Object Content Architecture) is the image
format that resulted, and ABIC (Adaptive Bilevel Image Compression) is
the compression scheme. The results of IBM's approach produces a high-quality
picture of the front and back for image statements plus a third, much
smaller image for archiving. The average resulting check size is about
42,000 bytes.
ICR
(Intelligent Character Recognition) - A type of optical character recognition
where letters and numbers written by a human can be read by a machine.
Image
Research - Using an imaging system to pull up a check or other imaged
banking statement by customer, name, check number, or other item in the
image index. Image research takes considerably less time than researching
via microfilm or retrieving original documents from file cabinets.
Image
Statements - Bank statements that include representations of checks or
other scanned documents. Electronic image statements make it easier to
reconcile your account since you can see the entire check image - including
name of the payee and memo - instead of just the date and check amount
as on a traditional statement.JPEG As its name implies, JPEG (Joint Photographic
Experts Group) was originally developed to compress color photographic
images. It is now widely used in the banking arena to compress TIFF images.
Legal
Amount of Check - The amount of a check written out in script (for example,
"fourteen dollars and 32 cents"). Usually entered on the center line of
the check.
Lock
Box - A mail-in payment processing system offered by commercial banks
and service bureaus to large corporations. Lockbox processors set up special
post office zip codes that can receive a company's mail and/or electronic
payments and deposits directly. The bank processes these payments directly,
usually providing the corporate customer with electronic transmittals
providing details such as who paid what and when. Wholesale lockboxes
serve high-dollar, business-to business transactions, while Retail lockbox
operations are much higher in volume customer to corporation payments.
MICR
(Magnetic Ink Character Recognition) - Type of recognition that relies
on detecting characters that have been machine-printed in magnetic ink
to rigid specifications. The distinctive shape of each character and the
amount of magnetic material in the ink are strictly defined by ANSI. The
common classes of MICR font (E-13B and CMC7) are also readable using image-based
recognition. MICR fonts can be read at high speed with an extremely high
degree of accuracy by electronic data processing systems at very little
cost per check.
MICR
line - The row of characters printed in machine readable magnetic ink
at the bottom of each check. Part of this MICR line identifies the issuing
bank and the check number and is usually preprinted on the check. The
face value of the check is typed into the far right of the MICR line before
that check is routed back to the issuing bank. This allows the check to
be recognized cheaply and easily by the Federal Reserve in order to forward
it back to the bank on which it was drawn.
Misread
- A mistake made by a recognition system in interpreting a character,
field, or document.
OCR
(Optical Character Recognition) - The automatic machine reading and of
printed material and translation into ASCII or other recognized alphanumeric
standard..
On-Line
Bank Statements - Like your monthly paper bank statement, on-line banking
statments provide the customer with a listing of checks cashed, deposts
made and interest and bank expenses accrued.
On-line bank statements are frquently linked to
an on-line payment system that allows consumers to pay bills electronically.
They are not typically linked to an EBPP system. Lots of consumers are
already paying their bills on-line, but most of those bills are still
deliverd as paper documents.
On-Us
Checks - Checks drawn and deposited from the local bank.
Paper-To-Follow
- Instances in which the paper check or other banking document must be
forwarded after an image or data detailing specifics about that check
or document have already been transmitted.
Payment
System - Any system used for moving funds, payments, and money between
financial institutions. In U.S., the Federal Reserve plays a major role
in moving funds, but a variety of private organizations also perform payments
system functions as well.
POD
(Proof of Deposit) - Matching the amount on the courtesy line of the check
against the deposit slip, an electronic record or other form of record.
Positive
Pay - A system that provides companies with a way to notify their bank
of the checks written, check numbers, amounts, accounts, etc. This way,
the bank can scrutinize all payments received against this information
to check their validity. Positive pay provides a powerful weapon against
fraud, allowing accounts to be reconciled quickly against items as they
are being cleared.
Power
Encode - Any MlCRline-encoding process that is automatically generated
by an imaging or other automatic check processing system.
Reader/Sorter
- A device that reads the MlCRline, then sorts checks (usually by the
bank issuing them) into separate piles. For example, the IBM 3890/XP Reader
Sorter.
Reject
- A character, field, or document that the recognition system is unable
to recog Size.
Reject
Rate - The percentage of the total items to be recognized that the recognition
system knows it cannot identify.
Reject
Repair - Repairing misprinted information entered into a check's MICR
line.
Remittance
- a payment, usually accompanied by a stub which details what the payment
is for.
Remittance
Processing - the collection, processing, and posting of payments.
Remittance
Processing and Lockbox - See Lockbox
Routing
Number - A numbering system printed on the bottom MlCRline of the check
that identifies a particular bank.
Scenic
Check - A type of check that portrays a scene or colorful pattern.
Single
Pocket Proof Machine - A machine that enters MICR information on the bottom
of the check. Because this sort of machine has a single pocket, it cannot
sort the checks into different piles according to the banks on which they
are drawn. Thus, they are either on-us checks or will have to be passed
to a reader/sorter for further processing.
Stub
-- an itemized list of what is being paid and by whom. Originally stubs
were the tear-off portion of an invoice or statement, which was returned
with the check. These days the defintion is extended to any record that
is returned along with the payment which details what the payment is for.
Stubs typicaly include the customer account number, and the amount owed.
Statement
Rendering - Creating a customer statement or a report that details transactions
for a fixed period, usually a month.
Transaction
Processing - Characterized by high volumes and workflow orientation, transaction
processing involves setting up automated procedures for handling commonly
repeated tasks. Work is passed automatically from worker to worker in
assembly-line fashion. For example, in check processing, one group of
operators or automatic routines might process all checks, while item repair
and balancing occurs at a different stage of the game. This is contrasted
to store and retrieve where volumes are low and inquiries are random.
Although relatively new to banks, insurance companies have used transaction
processing systems for years to process claims.
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