The financial value from the above four initiatives is greatest for the largest banks, which tend to have the greatest bad check write-offs and the largest share of corporate cash management sales. A bank with $10 billion in deposits could realize yearly financial benefits as great as $7 million from these initiatives, while banks with $100 billion in deposits could see benefits totaling $260 million a year.
In the year 2000 the Federal Reserve Board staff began investigating a concept to promote check truncation and electronic check presentment. That concept evolved into the Check Clearing for the 21st Century Act (Check 21).
The idea was to enable a bank to substitute a machine-readable copy of a check (a "substitute check") for the original check for forward collection or return. Substitute checks that meet the requirements of the Act would be the legal and practical equivalent of the original check.
On December 21, 2001, Chairman Greenspan sent the Federal Reserve Board's legislative proposal to the Chairs and Ranking Members of the Senate and House Banking Committees.
ProgressSoft, a leading imaging solution provider for the banking sector introduced an Image-based Check Clearing solution (PS-ECC) which will provide an online check clearing solution for the whole national checks, securing the deposit of the check's amount in the account of the beneficiary within the same day. The solution will slash off all cumbersome expenses, will save time, reduce check fraud losses and provide better fund management for people and businesses thus boosting the economy.
The basic idea of the solution is to scan both sides of the check, as soon as the check is received by the teller of the Bank of First Deposit "Receiving Bank", move the images together with the associated data, using communication lines, to the Paying Bank "Issuing Bank" passing through the Clearing House. The check is technically and financially approved by the Paying Bank and a response message goes back to the Bank of First Deposit passing through the Clearing House for the settlement to occur between banks, and for the amount of the check to be deposited in the account of the beneficiary within the same day.
The software uses the latest technologies, implements ANSI standards in check design and specifications, electronic image exchange and security.
ProgressSoft introduced the idea in 1996, where it started the design and development of the solution, started marketing the product in 1999, and got the first contract signed with the State of Qatar in June 2001. The company was also awarded the Electronic Check Clearing Project by the banking body in Jordan in June 2004.
ProgressSoft is now joining forces with the giant American Hewlett Packard HP to bring its ground-breaking Electronic Image-Based Check Clearing Solution, PS-ECC in the upcoming Sibos 2004, the world's premier banking technology event. This annual forum brings together all Central Banks' seniors and executives. The company's main objectives is to furnish the US financial market with such a pioneering solution through strategic business partnerships with major IT players working with the financial sector.
The company has presented the solution in major international IT fairs as CeBIT 2002 and 2003, which were held in Hanover, Germany.
Since its inception in 1989, ProgressSoft pioneered imaging solutions to the financial sector including signature verification and recognition systems, electronic document management system and workflow, daily jacket archiving systems, enterprise report management system besides the electronic check clearing solution. The company works in 19 countries worldwide.