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Fintech disruption hits UK cheque processing industry

Cheque processing company makes huge cuts to its operation as new technology reduces demand for its services

Cheque processing company iPSL is closing some of its UK operations and cutting hundreds of jobs because technology has reduced demand.

Today, images of cheques can be taken on a smartphone and sent directly to a bank, reducing the need for large operations to complete paper-based processes.

 iPSL will cut 600 jobs – about half its workforce – and will reduce its number of processing centres from nine to two, in Northampton and Milton Keynes, according to the Unite union, which described the cuts as “tragic”.

Financial services technology, or fintech, is shaking up the finance sector, with smartphones even replacing bank branches for many people.

Dominic Hook, national officer at Unite, said: “The tide of digitisation across financial services brings with it huge challenges as organisations have to adapt the way they work. The changing face of cheque processing, with new digital imaging, has brought considerable difficulties for this industry.

“Unite now wants to see iPSL make the necessary investment through new technology to secure as many jobs as is possible.” 

iPSL handles about 80% of the cheques issued in the UK each year, but technology is causing the use of cheques to decline. In 2015, 500 million cheques were written in the UK – a year-on-year fall of 13%.

Read more about digital disruption of cheque processing

In a statement, iPSL said: “Following government legislation in April 2015, the Cheque and Credit Clearing Company is managing a programme to introduce a quicker and easier way of clearing cheques in the UK.

“The Image Clearing System (ICS) will enable images of cheques to be exchanged between banks and building societies, instead of moving paper around the country.

“The introduction of ICS will have a huge impact on the current cheque clearing process and, for the last 12 months, iPSL has been sharing developments and potential implications with our employees and bank customers.

“ICS’s introduction will remove the requirement for remote data capture and processing, therefore reducing site requirements and a subsequent reduction in staffing numbers.”

Read more on IT for financial services

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