The bulk of the processing of cheques and credits is undertaken either prior to the exchange process (known as out-clearing) or afterwards (in-clearing), but not during the exchange process itself.
Since 1994, when the C&CCC amended its clearing rules, all members have outsourced their processing, either to specialist cheque processing organisations or to another member. The economies of scale offered by outsourcing has meant that members can reduce their processing costs and benefit from a more efficient system and use of image technology for their back office processes, though this has yet to be used for the exchange process.
One of the C&CCC’s priorities is making sure the clearing system is robust, reliable and secure. Its work on payments integrity examines any factors that might threaten the system’s reliability and the Company’s Rules and Standards ensure that checks and controls are in place to eliminate risk and prevent disruptions.
The C&CCC does not have a direct relationship with any outsourcers used by its members. Therefore, members have responsibility for managing the outsourcing firms they use and must ensure that these firms comply with the C&CCC’s Rules and Standards.
The only function outsourcers cannot perform is to provide the funding for the settlement process. Settlement is a core banking function and only members are able to settle through the settlement service providers.
As with the central processing system, there are several layers of contingency within the cheque processing environment to ensure that exchange and settlement take place on every clearing day.