seattle.bizjournals.com/seattle/stories/2007/04/02/stor -
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Published on: 3/30/2007
Last Visited: 12/17/2007
"Any time something is coming in (to banks) remotely, there's always the risk that there could be a breach," said Brad Williamson, director of the banking division at the state Department of Financial Institutions.
Dubbed "remote deposit capture," the technology spares businesses a trip to the bank by letting them scan the checks they receive into a computer, and then deposit them online.A number of community banks have adopted the technology, including Everett's Cascade Bank and Bellevue-based First Mutual Bank, with hopes it will help attract more business customers and give the banks a low-cost way to expand their geographic footprint.
However, the technology does carry risk.Traditionally, the storage and handling of checks have been the responsibility of banks.Oftentimes, small businesses "aren't completely aware of all the different banking laws," Williamson said.
When businesses take over, it increases the risk that those checks could be stolen and used to create fake checks.Those checks could then be made out for large sums and deposited with the bank, leaving it vulnerable to losses.
For businesses, Williamson said the most critical component is being sure the checks are stored and destroyed properly.
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The DFI's new program adds "a few hours" to the examination process, Williamson said.
So far, Williamson said the vast majority of banks have been in compliance.Williamson said no specific penalties have been outlined, and that the most likely recourse would be requiring banks to bolster their process, outlining the issues for them to correct.