The role of financial regulators is to constantly modernize and introduce new technologies that enhance monetary, control and oversight processes. With checks being the preferred future dated payment instrument for both corporate and retail customers, the case for enhancing it remains vital.
There are also several indicators that checks are here to stay; these include the drawbacks of direct debit payments, limitations of instant payments, and the inimitable secure environment checks provide to payees.
However, check instruments require developments to assist financial regulators and users alike, such as reducing the numbers of returned checks due to signature mismatch, or providing the means for payees to verify and validate a received check online or offline prior to deposit and collection. These developments are achieved through replacing wet signatures with an electronic cryptographic-based signature.
Following ProgressSoft’s world-first implementation of countrywide electronic checks, we attained several practical insights valuable to any central bank seeking positive change in the checks arena. Here are the lessons learned.
Implementation Success
In October 2021, ProgressSoft went live with the world’s first countrywide electronic check solution. Usually, when pioneering a solution like electronic checks, expectations in terms of registered users and transaction volumes are considerably low. Neither the regulator, nor the system operator however, expected what was about to happen on the first day of launching e-check services: over 45,000 banking retail customers successfully registered and posted their first e-checkbook requests. Only 5 days later, about 500,000 users were registered with around 4.5% of checks in the country converted to e-checks. Indeed, the market has turned out to demand an electronic check solution.
The same service was also availed to corporate customers, from enterprise and small-to-medium businesses to single person companies, through an additional security dimension which includes proper registration of corporate customers and their authorized signatories, as well as authorization matrices along with the needed Know Your Customer (KYC) requirements. Today, the anticipated number of registered corporates within the coming months is over 50,000 companies.
Success Factors
How was implementation success achieved? There are numerous factors that were considered to ensure that the launch of countrywide electronic checks will be a successful one. These include:
User Experience
The ability of the e-check application to meet user expectations in terms of ease of use, responsiveness, and fulfillment of the main objectives was essential for the success of the implementation. Users were able to smoothly follow the onboarding steps to complete remote registration, request their e-checkbooks, write, sign, share and enjoy e-check deposit and fund collection in a highly modernized flavor.
Customer Onboarding
End-users are the determiners of whether an implementation is successful, or not. Before the conversion of paper-based checks to e-checks was achieved, users were made aware of the new service availability, channels and mechanisms, not only as part of marketing efforts, but as part of operators’ readiness to respond to customer queries via well-established customer service call centers and helpdesk facilities.
Marketing
Ensuring operators’ readiness was complemented with adequate marketing and customer awareness efforts that pushed for service adoption to be achieved. Before the launch, people were made aware of the new service, its capabilities, features, benefits and even step-by-step guides on how the service can be used.
Conclusion
To achieve successful countrywide implementation of electronic checks, regulators, operators, banks and solution providers must be equipped with business and technical know-how to push for national adoption. Banks must also expedite efforts to complete corporate client registration, integrate the new service into their channels, and prioritize customer education and awareness.
As a final note, I would like to leave readers with a fun fact: paper checkbook printing costs between USD 150 – 200 per 1,000 checkbook pages. A country with 200,000 checks cleared per day spend about USD 15,000,000 each year on check printing only – yes, the market demands e-checks, but so does the regulator.
