Communisis launches technology to combat digital cheque fraud

3 November 2016

Communisis Plc, the leading customer communications group, has launched new technology to combat the increased risk of cheque fraud presented by the banking industry’s adoption of digital cheque clearing.

Cheque fraud cost the UK banking sector £18.9 million in 2015, according to Financial Fraud Action, a figure which could rise following the introduction of new regulations governing how cheques are cleared. Communisis’ e-UCN (Unique Coded Number) uses a complex algorithm to generate a unique code that is lasered onto customers’ cheques, ensuring that suspect cheques are automatically held for investigation.

Although dates are yet to be formally published, from the end of 2017 member banks will be legally required to exchange digital images of cheques with one another, in addition to paper copies. The change, known as the Future Clearing Model, could leave banks vulnerable to increased cheque fraud as existing systems are often unable to detect counterfeiting and altered cheques from scanned images.

Communisis provides multi-channel customer communications and cheque printing solutions to the majority of the UK’s high street banks. Research from the Cheque and Credit Clearing Company (C&CCC) shows that 38 per cent of consumers and 55 per cent of businesses in the UK still regularly use cheques as a method of payment, with 558 million processed annually.

Tony Rice, Head of Relationship Management at Communisis, said: “The Future Clearing Model will deliver an enhanced customer experience by speeding up the clearing process, but it also brings new challenges. In the USA cheque imaging has been in place since 2004, leading to a 70 per cent reduction in the cost of clearing cheques* but an increase in fraud due to the ability for counterfeit cheques to go unnoticed during the clearing process.

“According to C&CCC’s research the majority of cheque users will continue to write the same number of cheques as they do now once the digital clearing process is introduced.

“With legacy IT remaining a significant challenge in the banking sector, many UK institutions are not as well equipped as they could be to implement the Future Clearing model. Cheques continue to be a popular target for fraud and our technology is a unique, best-in-class solution that is Future Clearing Model-ready and complies with the industry’s leading SHA 256 cryptographic standard.”

Communisis is one of Europe's leading providers of marketing, transactional, security and regulatory multi-channel customer communications for major brands across the financial services, energy and FMCG sectors.

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