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Duplicate Detection Integral to Trustmark’s 100% Imaged Payment Processing

From Harold Winborne, First Vice President—Trustmark National Bank

PROFILE:

Trustmark National Bank, a subsidiary of Trustmark Corporation (TRMK), a diversified financial services company with $9.9 billion in assets, was an early adopter of the move to imaging. The bank learned early that imaging and image exchange offered indisputable benefits both in terms of customer service and as bank operations best practice. The bank also learned that addressing the unintended consequences of duplicate items would allow the institution to adapt rapidly to fully imaged processing.

A totally-imaged, multi-state institution in 2012 with 170 branch locations across Florida, Mississippi, Tennessee and Texas, Trustmark began its implementation of check clearing and remote branch capture in late 2005.  Soon after the implementation began, the bank realized the advantages of imaging.

SITUATION: 

Trustmark, which began with image capture and IRD printing, soon understood that it was inherently inefficient to convert paper to image only to reconvert the images to paper later in the process.

“Clearly, the concept was that you had to learn how to crawl before you could walk,” said Harold Winborne, Trustmark First Vice President. “With Check 21, the Fed was focused on leading everybody toward becoming accustomed to capturing images, so that in the future, banks could begin sending image exchange files in place of image replacement documents.”

A proponent of that vision, Trustmark became one of the first banks to explore eliminating IRDs and moving strictly to image exchange.

In late 2009, Trustmark became fully operational with image cash lettering, including capturing teller deposits behind the counter. Then, Trustmark had 150 branches scanning all teller work, and electronically sending it to the institution’s centralized check processing area. From there, Trustmark processed on-us items and created electronic outgoing cash letters to the Federal Reserve and two same-day settlement banks.

“Imaging has been about efficiency from the beginning: the efficiency of getting paper from a four-state branch network to centralized processing. Courier costs for transporting paper, especially from Florida and Texas, were astronomical,” Winborne said. “Our vision was to eliminate air courier costs and use those savings to expand the bank’s image technology.”

It was soon apparent from improvements in Texas and Florida that the bank could incorporate imaging in Tennessee and extend it across its sizeable footprint in Mississippi. Soon, all of Trustmark’s teller capture work was imaged behind the counter and sent to a central location.

PROBLEM:

Although the bank realized numerous advantages by being fully imaged, image-related setbacks also occurred. Duplicate image files, in particular, caused a ripple effect of problems including customer service issues, inefficiencies and added cost. While not initially significant, the challenge of dealing with duplicates grew as other banks began getting on board with sending image cash letters electronically.

Trustmark first became aware of the duplicate payment issue when notified by customers who were impacted by double postings. Correcting the ripple effect of a posted duplicate payment required considerable resources in the bank’s adjustments area. Nonetheless, Trustmark remained committed to becoming a fully imaged operation.

“Even when duplicates began to appear, they did not offset all of the advantages for the exchange of image cash letters,” said Winborne, “but it certainly had a negative impact on the process.”

Trustmark’s greatest concerns were for customer service and protecting the bank’s reputation. The bank moved quickly to implement an internal process to identify duplicate postings in a Day 2 scenario.

“Of course in Day 2, the damage was already done, but we were able to discover it, correct it, and notify the customer, which was an incremental improvement,” Winborne said.

However, Trustmark was not content with a Day 2 approach that affected its account holders and ensured a perpetually higher cost to correct. Its next move proved transformative.

SOLUTION:

The bank began its search for a Day 1 solution to catch duplicates before posting – a solution that would identify and present suspects to determine whether a potential problem existed.

According to Winborne, Trustmark required a solution offering specific functionalities, including integrating well with its item processing platform, back counter capture in the branches, forward presentment, and its outgoing returns system, as well as meeting the project’s financial goals. Finding a solution that met all of its criteria and had a track record of success among its peer bankers led Trustmark to select Dupe Detective® by CONIX Systems, Inc.

RESULTS:

During its four-month Dupe Detective implementation, Winborne was impressed by the customer service Trustmark received.

“Support is a critical element of why this kind of project succeeds, and the support from CONIX was outstanding,” he said. “We had a dedicated CONIX team that worked closely with us and supported us from the initial planning stages through the entire process, including QA testing.”

Today, Trustmark experiences 90 duplicates per million items captured. The institution processes 1.5 million in-clearing items, 1.8 million outbound items and 1.1 million on-us items totaling approximately 4.4 million items captured monthly.

In addition to preventing duplicate payments from posting to customer accounts, the bank’s solution also prevents duplicates from being sent to exchange partners. This allows them to build better banking relationships and lowers the number of adjustments they receive.

“Trustmark has chosen to go with the image world 100 percent,” he said. “Duplicate detection is an integral piece of that, and regardless of how much it costs, regardless of any savings, regardless of how much it adds to the bottom-line, it is a necessity.”

“I’m surprised that duplicate detection is not a requirement for all banks,” he said. “If you’re serious about imaging and adopting image exchange processes, Day 1 duplicate detection is some-thing that a bank has to have in place.”

According to Winborne, Trustmark has benefited for the simple reason that since implementing Dupe Detective until now, the bank would potentially have had over 3,000 upset customers who had likely received an insufficient funds notice because of an item paying twice, which could have been doubly bad for its impact on the bank’s reputation. With a proven duplicate detection system in place, the bank has been able to enjoy the benefits of imaging without the significant risks of duplicate items.

Published in the December 2012 edition of Transaction News.