Pub. 4 2014-2015 Issue 1

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S July • August 2014 21 How it works: After an NSF check is debited to a business account, it is converted into an electronic transaction and re- presented electronically to the check writer’s account—up to two additional times. Because of the multiple re-submissions and strategic timing to coincide with typical paydays, merchants collect more from returned items with less work. Tangible Results The process dramatically increases the chances for success- ful collection (about double to 70 – 75 percent!) over traditional collection methods, such as phone calls and letters. Neither the bank, nor the business accountholder, is involved in the automated process. Furthermore, if an item goes uncollected electronically, some service providers also offer free secondary collections, which also recovers 100percent of the item’s face value. The entity collecting the funds is also permitted to charge the check writer a state-regulated civil penalty fee, which is $20 in Colorado. This fee, which is debited to the check writer’s account and successfully collected about 75 percent of the time, serves as a source of income for the bank through a fee-sharing agree- ment. As a result, the bank, as well as the merchant, increases revenue without increasing the workload or financial investment. According to banks employing ECR, the burden of collecting funds from NSF checks has been greatly alleviated for busi- nesses. Just months after implementation, the bank and its business customers realize tangible results. The Mark of Success In addition to helping businesses dramatically increase check collection rates, these services also help community banks streamline operational functions. Before employing an ECR so- lution, most banks managed the disposition of returned deposit items manually, diverting precious time, money and employee resources from more strategic functions and operations. This is especially important to Deposit Operations desks tasked with handling a growing number of “Special Instructions for Returned Deposit Items” on a case-by-case basis. The ECR solution becomes the bank’s policy and SOP for dealing with returned items, stemming the need for account holders to look elsewhere, creating ad hoc handling situations for the bank. One popular ECR solution is BSG Financial Group’s Re$ubmitIt program. A free service for the bank and its com- mercial account holders. n Steve Lownds is Senior Vice President of Louisville, Ky.-based BSG Financial Group, a consultative and marketing firm that provides profit-enhancing and compliance programs and services to financial institutions. Steve can be reached at (303) 916- 2696, or at SLownds@BSGfinancial.com. Reach your target audience a ordably. advertise get results DANI GORDEN Advertising Sales 855.747.4003 dani@thenewslinkgroup.com