Following the advent of Check 21 and the move away from paper-based checks to an "imaged" check environment, FSTC has led the industry in making the use of check images safe, profitable, and secure.
Continuing its work to reduce check fraud, FSTC today announced the next phase of this multi-pronged effort that will soon let financial institutions and eventually their customers use new security features on check images to identify fraudulent checks before they even enter the system – at the point of payment. This represents a major step forward for the industry in combating check fraud.
"As far back as 1993, we have been involved in looking at how the electronification of checks would affect the industry," said Zachary Tumin, Executive Director of FSTC. "This initiative, being run under the auspices of FSTC's Check Imaging and Truncation Standing Committee, will dramatically ramp up industry efforts to use new image technologies to push check fraud out of the system."
As the financial services industry moves to exchange check images and loses the paper-based security features and controls that have proven so successful over the years, survivable features play a critical role in maintaining the integrity of check payments. This important project will let financial institutions use the next-generation of image survivable features to better protect their customers, merchants, and other check receivers from loss.
The Philadelphia Federal Reserve Bank, who is hosting the kick-off meeting, is a proponent of the project and for many years has led the Federal Reserve's efforts to develop and test image-survivable check fraud technologies. According to Executive Vice President Blake Prichard, "At the Philadelphia Fed, we have been focused on finding ways for check fraud protections to survive check truncation. Perhaps more importantly, we have tried to conceptualize how these technologies can to be deployed to inter-operate between players in the check payment system. The aim is to have a check payment be authenticated at the point of sale or deposit rather than at the paying bank, thus providing better protection for the payee and payor, and all parties in between."
"Check 21 has presented the industry with a myriad of issues, one of the most important of which is how to ensure the integrity of payments in an imaged-based environment," said Jim Salters, Director Technology Initiatives and Project Development. "This project further demonstrates the value that FSTC members working together can produce for the good of the industry."
Nineteen financial institutions, technology vendors, and federal agencies are participating in this landmark effort.
FSTC brings together diverse, and often competitive financial institutions, industry services providers, government agencies, and others to collaborate and find solutions to key industry challenges. Project topics come from member financial institutions and are driven by participating members with the support of FSTC staff.