Scaling ACH Management Without Breaking Your Back Office

Jim Young

Every day ACH is moving more money, faster than ever. That’s great for customers. For operations teams? Not so much.

As ACH volumes surge and payment windows tighten, financial institutions are under pressure to do more, often with fewer human resources. Managing risk, reporting to regulators, responding to customers—all of it lands on the desk of the ACH team. It’s high-stakes, high-volume, and too often, highly manual.

At CONNECT 25, Q2’s Bruce Dragoo and Mercantile Bank's Liz Landes shared advice on how to manage the madness and lighten the load.

The goal? A streamlined, scalable back office that keeps pace with growth without burning out the people behind it.

ACH volume is soaring, and so is the pressure

According to NACHA, the ACH network is now moving 134 million payments a day, with year-over-year growth topping $1 trillion for the past 12 years.

“That’s 98 payments a day per person," noted Dragoo, a manager in Solutions Consulting at Q2. "And that’s probably about right when you think about payroll, debits, everything else."

Same-day ACH usage is also growing rapidly—increasing in volume by 45.3% and value 33.3% from 2023 to 2024. And more institutions are moving from simply receiving real-time payments to originating them.

As volume and complexity increase, so do the expectations on ACH teams. They're no longer just processing transactions. They're managing originator risk, complying with evolving regulations, handling exceptions, and maintaining service levels. And they’re often doing it with tools that weren’t designed for this scale.

The manual grind

Mercantile’s ACH team once faced those struggles. Risk reviews at the $6B Michigan-based bank previously entailed pulling all their data into spreadsheets - just limits, but no information on how much a customer was using toward it. They'd then email that out to lenders for sign-off.

"We'd get it back and we'd be like, 'Okay, do you have authority to actually approve that?'" recalled, Landes, a VP and Digital Banking Technical Data manager at Mercantile. "And there'd always be that one originator that slipped through the cracks. Either we missed running it, or the wrong person approved it.”

It's a familiar story for many ACH teams. Even with well-trained staff and solid systems, the operational strain adds up. Teams waste time gathering data instead of acting on it. Delays and mistakes increase. Compliance becomes a fire drill. And experienced staff are left chasing approvals instead of managing risk.

What a smarter ACH operation looks like: Mercantile Bank’s story

Streamlining ACH operations at Mercantile started with bringing all the relevant data from their 1500 originators into one system, using Q2’s Payments I.Q. System (PIQS). That central view gave their team a real-time understanding of each originator's behavior and risk.

“Now our lenders get a single-page risk review with all the limits, history, loan info, and RDC and wire activity in one place,” Landes said.

The system also prevents lenders without authority from approving risk reviews, helping eliminate human error.

Smarter reporting also plays a major role. From NOC trends and return rates to micro-deposit monitoring and same-day ACH usage, the team has real-time insights at their fingertips.

The previously thorny issue of originator returns is now smoothly handled by Mercantile via an integration between PIQs and their Positive Pay solution, Q2's Exact Transaction Management System (ETMS). Before, such returns were a “swivel chair scenario,” in which operations members would have to hop back and forth between systems to trace numbers and match files. Now, when a return is submitted by an originator, the correct item is pulled by PIQs, and a file is automatically generated and sent on to the Fed for processing.

“It saves a lot of time and a lot of research, and our back room just loves it,” Landes said.

Later this year, Mercantile plans to roll out proactive alerts through Andi Copilot—Q2's in-platform assistant. Andi will flag unusual activity like inactivity, risk score changes, or limit overrides.

The payoff? More visibility, fewer errors, and a process that scales with growth—without adding headcount.

The smarter, more automated, scalable approach has yielded impressive results.

• Reversals that used to take 20–30 minutes now take 5 … or less. The old multi-step, manual reversal process can now be initiated originators directly in digital banking, with guardrails for authorizations and tracking of approvals. “Our customers love it. Our treasury team loves it. And the auditors love it,” Landes said.

• Risk review times are dramatically shortened. A process that once took hours now can be done in as little as a few minutes. As a result …

• Mercantile now completes all 1,500 originator risk reviews in one month.

What’s next: Raising the bar for ACH oversight

For institutions like Mercantile that are already using automation to streamline ACH management, the next frontier is deeper intelligence and broader integration:

• Risk scoring to rank originators. Using help from Q2’s AI Copilot, Andi, banks will be able to use a configurable framework that automatically assesses customer risk based on core data, originations, and loan performance—a step toward proactive decisioning and prioritization. “If something changes, like if a customer goes from low to high risk, because of some activity we’re tracking, Andi will say, ‘Hey, you need to know about this,’” Dragoo explained.

• NOC recipient holds stop noncompliant files before they go out. Institutions that have Q2 Digital Banking as well as PIQs will be able to automatically alert originators of errors that need to be fixed, instead of hoping the originators remember on their own. “This is going to show customers exactly how to make the change that’s needed. They just have it accept it and it will then make the change. And the best part is it’s documented for the auditors,” Landes said.

• Real-time payments ingestion. With more institutions sending on RTP and FedNow, institutions need ACH-style reporting and compliance tools to support faster rails. Work is underway to bring those into the same system.

• Digital onboarding sync. This will allow digital banking originator profiles to flow directly into the PIQs ACH management systems, eliminating duplicate setup processes.

• Recipient name matching. In response to upcoming NACHA requirements, name-matching capabilities are being developed to flag discrepancies between account names and numbers—an increasingly critical fraud control.