Under the Hood: CheckAlt’s ATM Deposit Automation and Reconciliation
Written by David Peterson
In the years leading up to 2020, divestment in automated teller machines (ATMs) ran parallel to the waning belief in the continued use of check payments as mobile deposit, digital wallet, and card use continued to mount. Then the unexpected happened—a public health crisis and social unrest drove businesses including bank and credit union branches to shut down either temporarily or permanently, reinvigorating the long-established method of interacting with one’s bank via ATM.
It was just over 50 years ago when the first ATM was publicly introduced by Chemical Bank in Rockville Centre, New York. The ability for a consumer to get cash, no longer tied to branch banking hours to physically walk into a branch, was readily embraced. Today, the ATM continues to play a vital role in providing banking services to consumers and businesses who cannot or elect not to visit a branch in person. For financial institutions, assurance that their ATM fleets were fully operational and deposits at ATMs were quickly and accurately captured and delivered has never been more important.
Financial institutions blinded by the pressure to be relevant with newer and faster payment options often end up with a glaring hole in their ability to properly service their customers or members. While the “digitization of banking” and “speed of payments” are seemingly all we read and hear about these days, it is the financial institution who systemically enables all consumer and business payment needs, keeping the customer experience top-of-mind, that will remain competitive. One of the keys to this effort is the ability to accept traditional payments, such as checks, through digital device venues, 24/7. Remote deposit capture capabilities via a mobile application enables this, but the power of accepting deposited checks at ATMs should not be ignored.
ATM check deposit processing is a function financial institutions often neglect for various reasons: 1) many ATMs are simply cash dispensers, lacking the additional hardware and support that are required to allow for deposits; 2) concerns over the ability to detect and remediate fraud, and 3) ATMs are often in locations that don’t allow for immediate access to deposited checks. These reasons should not inhibit a financial institution’s interest in capitalizing on this important pillar of remote banking. If the past year and a half taught us anything, it’s that we cannot predict what channel might be the next “must-have” for consumers.
ATMs Part of Critical ‘Contactless Banking Services’
ATMs have been and remain a critical consumer touchpoint, therefore it’s important for financial institutions to reimagine their ATMs as “financial service centers” that can readily perform value-driven interactions with consumers and businesses alike—improving engagement, delivering more convenience, and generating higher ATM usage. This is why ATM Deposit Automation and Reconciliation is and will continue to be a critical pillar within CheckAlt’s suite of solutions for financial institutions.
“Hundreds of financial institutions choose our ATM solution to accelerate deposits and streamline internal operations,” explained Maourice Gonzalez, Managing Director of Software Engineering for CheckAlt. “We are proud to work with the industry’s top ATM manufacturers and service providers to deliver efficient software that protects customer data and automates the deposit process from start to finish.”
In the past decade, CheckAlt has become a leading independent provider of item processing and treasury management solutions for hundreds of financial institutions and business clients within the United States—solutions encompassing both traditional methods of payments and also enabling the future of electronic payments. CheckAlt’s platform infrastructure provides a variety of ways to ensure financial institutions and businesses can remain relevant from a payment perspective—offering outsourced processing and remote scanning software to front-end portals enabling electronic payments to the most advanced backend APIs for all payment types. All are designed to provide on-target functionality for any consumer need, regardless of the channel access desired.
Recognizing each financial institution has its own ATM manufacturer relationship, CheckAlt has prioritized working with all major ATM manufacturers including Diebold, NCR, Hyosung, and Cummins Allison to support virtually all ATMs and ITMs that can accept a check deposit. Deposited items are captured in real time for inclusion in item processing steps without the need for access to the physical ATM. Deposit rules and a risk mitigation option streamline back office operations by enabling automatic processing of most ATM deposits daily. Financial institutions have the ability to configure deposit rules that flag items as exceptions that require further review (based on check amount, total deposit amount, duplicate checks, amount changes, and even MICR data to meet internal standards and protocols). These exception items are managed within an online portal by operations personnel who review and clear them, independent of the ATM location. The resulting encrypted image cash letter files are delivered using CheckAlt’s proprietary SFTP service into a financial institution’s item processing workflow, regardless of its core system or service bureau.
Reconciliation is a key component of CheckAlt’s ATM Capture solution. In fact, deposit automation and reconciliation go hand-in-hand. CheckAlt provides a daily reconciliation report that provides electronically deposited item comparisons at each ATM with data delivered from a financial institution’s core banking system. This set of reconciliation reports provides verification deposits align between items received and items processed. "CheckAlt has been a longstanding partner for our bank, working closely with our team to add value for our customers and streamline operations,” Banco Popular Puerto Rico IT Supervisor Fernando J. Dávila Cedeño said in a recent press release. “As more consumers use ATMs for contactless banking services, we recognized the value of creating operational efficiencies within our bank for cash and check deposit reconciliation. CheckAlt’s solution is helping us continue to provide excellent service for our customers."
At the Heart of the Matter
A key differentiator of CheckAlt’s ATM deposit automation actually doesn’t involve deposit automation at all. CheckAlt provides a monitoring system that maintains an active connection to each supported ATM. This “heartbeat” means that on a minute-by-minute basis, CheckAlt knows the activity of each and every ATM within the system. If a heartbeat is not responding within a specified timeframe, a representative will send an email to the terminal provider so a technician can be dispatched on site.
In most cases, the ATM is disabled and needs immediate service. However, the heartbeat features also measures ATM deposit frequencies. For example, in the case there is a service truck blocking entrance to an ATM, the CheckAlt service team notifies the FI that ATM frequency is abnormal. This advanced ATM monitoring function ensures ATMs, regardless of how remote, are available for a great self-service customer experience.
Operational efficiency is key element to CheckAlt’s onboarding and upgrade strategies. Onboarding for financial institutions is streamlined to occur in, most often, less than a week, as most ATM units are already supported by CheckAlt’s ATM deposit automation engine. CheckAlt provides efficient turn-around times to both financial institutions directly or with their core providers to set up secure connections for testing and approval. “We are pleased with the results of our new partnership with CheckAlt,” Mutual Credit Union President Michael Mathews said of its selection of CheckAlt for ATM services in a recent announcement. “The communication with CheckAlt has been great from the start to the go-live.”
Software upgrade processes are also designed efficiently here at CheckAlt. Our ATM Universal Installer function allows CheckAlt to remotely install software upgrades across entire ATM fleets. What was once a laborious effort can become a simple task that saves financial institutions time and money while ensuring ATMs remain secure and efficient.
In summary, the ATM is an integral part of your omni-channel payments strategy. While there may be options for how you process deposits, CheckAlt is committed to investing in the evolution of our deposit and payment solution suite to meet changing consumer demands. For now, and into the foreseeable future, ATMs will continue to serve as a primary way for consumers to physically, conveniently, and efficiently interact with their bank.