BAML introduces digital processing for wholesale lockbox

Source: BAML

Thousands of companies across the world, and particularly in the United States, continue to receive large volumes of check payments, even as electronic payment options grow in popularity.

Today, Bank of America Merrill Lynch (BofA Merrill) is pleased to announce that its U.S. Wholesale Lockbox service, which collects and processes these payments, has been fundamentally transformed, enabling greater accuracy and speed. This can mean improved reconciliation of receivables for clients.

The improvements are a result of Bank of America Merrill Lynch’s patented technology and a comprehensive re-engineering of the entire workflow. Central to this transformation is accelerated image capture, which eliminates traditional paper based processing and mitigates associated risk. These changes breathe new life into a core treasury management service.

“While the number of checks in the United States has decreased in recent years, there’s no doubt that paper payments will be here for the foreseeable future. The digitization of lockbox paper documents and automated processing reduces friction in the system and improves our clients’ ability to manage their accounts receivables and thus, their working capital,” said Rodney Gardner, head of Global Receivables in the Global Transaction Services business at BofA Merrill.

Each month, 17 million checks and 60 million remittance documents are sent to the bank’s lockboxes around the country for processing on behalf of our clients. Traditionally, after arriving at a lockbox, the paper payments and documents would go through manual steps before funds were credited and remittance data reported back to clients. BofA Merrill saw an opportunity to redesign the process and improve the customer experience. Through considerable investment, Global Transaction Services has launched this new business model confirming our long-term commitment to providing wholesale lockbox services to our clients.

“We have invested in innovative, industry-leading technology and have recreated the lockbox process - in short, we’ve reinvented the business,” added Bill Pappas, chief information officer of Global Wholesale Banking Technology and Operations and Global Markets Operations and Middle Office at Bank of America.

Below are some of the highlights of the patented wholesale lockbox process:

Checks and remittances are now moved through the process as images, not as paper.
Required tasks such as sorting to the individual lockbox, validating the payee and authenticating the check are now done electronically.
Enhanced digital images of the payments and remittance data are now available to clients via the bank’s online banking channel, CashPro Receivables®, or through scheduled transmission services.

BofA Merrill has more than 70 years of experience providing lockbox services, and today operates lockboxes in major cities across the United States and Canada. The bank also provides lockbox and other check collection services in multiple international locations.
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