How to Effectively Mitigate RDC Risks? [RDC Audit Checklist] | Paystation

How to Effectively Mitigate RDC Risks? [RDC Audit Checklist]

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Ever since the Cheque 21 ACT, businesses across the country have been using Remote Deposit Capture to help shape the future of depositing cheques with banks using panini cheque scanners. While the system certainly boosts efficiency and customer satisfaction, it does come with its risks. As such, it has become vital for banks to understand what the system is and how it works to protect themselves and their customers.

Before diving into steps that can be taken to ensure this, let’s take a look at the system and how it works.

What is Remote Deposit Capture?

Remote Deposit Capture or RDC enables businesses and individuals to deposit electronic cheques quickly and securely. This has successfully replaced paper cheques thanks to the convenience of using phones and computers from any location.

Here’s How the RDC Process Works

The RDC Process has several essential steps. These are:

  • The bank customer receives a cheque that must be deposited.
  • They must then use an RDC cheque scanner to take images of the cheque.
  • The software would then be used to send the images securely to the bank along with other necessary information.
  • On receiving the images, the bank would generate a substitute cheque which it would deposit into the required account.
  • The funds become available once the cheque has cleared.

As you can see, the process is rather quick and effective when compared with the tedious process of depositing cheques manually. Let’s look at some other benefits of this process.

Benefits of Using Remote Deposit Capture

RDC can make the cheque deposit process a lot smoother for banks as well as customers. This brings about the following benefits:

  • Quicker Access to Funds
  • Reduced Chances of Human Errors
  • Increased Flexibility in Deposit Times
  • Faster Deposits

Also Read: How RDC Can Streamline Your Cheque Deposit Process

The Risks Associated with Remote Deposit Capture

Unfortunately, this smooth process comes with its risks. These risks primarily arise from the fact that the power dynamic of depositing cheques shifts into the customer’s hands and makes the process a lot easier to misuse. For instance, cheques that aren’t named to a particular account can easily be scanned and deposited without any human verification. Other risks are:

  • Unauthorized modifications
  • Poor image quality
  • Forgery
  • Data Security

Remote Deposit Capture Audit Checklist

To mitigate these risks, the following audit checklist can help you learn the best RDC practices.

  • Develop an RDC Process

Developing a process for RDC transactions in your organization will help keep the execution as per your plan and will also help mitigate several potential risks that may arise.

  • Create a Risk Assessment Program

It’s always a good idea to hire a team to assess all the legal, compliance, and reputational risks that come with the implementation of your RDC system. This risk assessment will help compile policies to mitigate those risks in particular and reduce the chances of missing out on conditions.

  • Establish Customer Screening Policies

Getting a customer screening policy similar to KYC will help you identify customer behavior and determine the chances of fraud in each transaction. Moreover, this would also introduce your customer to their responsibilities and the consequences of misuse.

  • Determine Monitoring and Reporting Processes

The CDD team of your RDC system must monitor all RDC activities. These would report activities periodically and conduct risk assessments accordingly.

  • Analyze Scanner Efficacy

Analyzing the efficacy of your scanner before rollout will ensure that any unforeseen technological risks can be identified and eliminated in time. This would prevent mishaps and ensure a functioning system.

  • Consult with an Expert

Remote Deposit Capture is a fairly new technology, and while it certainly has its benefits, its risks can bring several unwanted consequences your way. It is wise to consult with an expert regarding the addition of an RDC network to your banking system.

Final Thoughts

While RDC brings several risks with it, you can always mitigate them with a proper audit. If you’re looking for a reliable digital cheque scanner to further reduce the technological risks in your RDC system, get in touch with our team at Paystation today!