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Banking & Financial Services
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Home > Solutions > Banking & Financial Services > Check 21
 
Check 21

The Check 21 Act, signed in October 2003, awarded legal equivalent status to substitute checks by allowing banks to truncate the checks unilaterally. The industry is looking at the law as the next milestone in payment processing since the adoption of Magnetic Ink Character Recognition (MICR) in 1956.

Implementing Check 21 is transformative for many areas, such as Operations, Retail Banking, Treasury & Cash Management, Risk Management, Legal, and Information Technology. Banks will require substantial technology investments to migrate to a Check 21 environment. From a process flow perspective, the following main systems are required:

 
  • Check image capture
    (with verification and receipt generation, if required)
  • Check image storage, archiving, and exchange
  • Check image processing, pattern matching, and signature verification
  • Check research and adjustment
 
Cognizant's Check 21 solution enables banks to reduce operational costs, decrease processing time, detect fraud earlier, improve customer service, protect against disasters and delays, and generate new revenue opportunities.
Tower Group® estimates Derivatives-related IT budgets at sell-side firms are growing at 12-15% annually, compared with 3-5% for Equities and Fixed Income.