How to Manage Risks When Using a Remote Deposit Capture System
By Space Coast Daily // November 3, 2020
The benefits that come with technology, especially in business, cannot be overstated. We are talking about efficiency, speed in processes, transparency, and cost savings, to mention a few.
The remote deposit capture system is one of the technologies that has changed the face of banking in both financial institutions and small businesses.
Panini is an RDC tools manufacturer that saw the gap in clearing checks at both banks and businesses when they receive payments. They have tools that address the challenges that include slow feedback on bad checks, fraudulent checks, slow check clearing processes, and time wastage when making trips to and from the banks.
They have a wide array of check readers designed to meet the needs of businesses across different industries handling varying numbers of checks at a time.
While the remote deposit capture system has been a blessing, it comes with challenges like other technological solutions. The list of challenges that a user can face using this system can range from data security, failure of the devices, and inadequacy of skills when handling the equipment. The good news is that these are challenges that can be addressed, and the business can continue enjoying the benefits of these innovative solutions.
As much as data is safer when you have electronic records, there is still a gap. You can imagine the harm that would be caused if the checks land in the wrong hands. To ensure that this does not happen, firewalls need to be put in place if the business uses a web-based system to prevent online attacks.
Also, there needs to be controls on who in the company can access the remote services. Limited access will help control the number of employees who can get contact to the checks hence protect the data.
If a business is working with a software system, then physical access to the computer where it has been installed should also be monitored. Data loss is also a potential risk, and this can be avoided by storing the checks’ data in the cloud. The business needs to have policies too designed to protect data and to which the staff must strictly adhere to.
The other potential risk when using RDCs is faulty equipment. This can cause a myriad of challenges, such as downtime, costly, inaccurate data, etc.
To mitigate the risk, regular inspection and maintenance of the devices must be done to ensure they are working optimally. It is also vital for the business to purchase RDC devices from reputable manufacturers like Panini to avoid problems with the tools.
Getting warranties for the equipment is also vital because the manufacturer might have to take liability for damage that the devices may have caused. Reading reviews will also give you clues on the issues you might experience with the tools.
Inadequacy of skills
Like faulty equipment, staff who cannot work with the equipment can pose a potential risk to the businesses. The repercussions that come with lack of employee training include collecting inaccurate data and low image quality, which can lead to delays in the clearing of the checks or even rejection and incorrect data processing.
This is one of the risks that are easiest to handle as all it takes is ensuring that employees are adequately trained before they are allowed to handle the systems.
While some organizations may want to incorporate the system in their operations within short notice, it is not advisable. They need to take time to assess how long it would take the staff handling the system to be trained and the resources that will be required.
If the merchant is not handling large amounts of checks, they should consider using the less sophisticated systems that are easy to understand and use within a short time.
Fraud is a risk that both banks and businesses may be exposed to when using digital checks. Fraud can occur in various ways, including data breach, where customers may use a merchants’ account number for malicious purposes and fake checks.
The best way to mitigate this risk is for the merchants to use the remote deposit capture systems to discuss strategies that will prevent such risks from their banks.
Banks often advise account holders using the RDCs to regularly perform reconciliations to promptly identify fraudulent transactions for prompt mitigation and prevent subsequent activities. Locking accounts is also a very effective strategy, such that payments for purchases are only coming in and withdrawals from the account are not being made by anyone else.
Risks will always be there when doing business, and the best thing to do is to ensure that they are prevented. Familiarizing yourself with any operations and systems’ potential risks is critical for coming up with strategies to mitigate them before harm is done.