JACKSONVILLE, Ark. — Arkansas FCU here is the only financial institution in the state offering remote deposits to consumers, and the technology is giving the CU wiggle room to compete under slim margins.
"We mean it when we say we want to make it easy for members to do business with us," said Denise Palmer, AVP-accounting at the $820-million CU. "All you need is a little $70 scanner, a computer and the Internet, and you never have to leave your home to deposit a check."
Beginning this month, all members will need is an Apple iPhone, she said. AFCU will also be the first in Arkansas to offer mobile deposit capture to consumers. "Mobile deposit from iPhones will probably be even more popular than home deposits. Everyone's got an iPhone in their hand, but no one carries around a scanner."
Just as the industry is thinking of saying goodbye to free checking, member deposit capture offers Arkansas FCU (AFCU) an alternative way to cut costs, said Palmer. "Member capture gives us an opportunity to offer an entirely electronic account that is free to members"-yet profitable for the CU.
Arkansas is largely rural, with credit union branches spread thin, Palmer continued. "Deposit capture makes it very convenient for members to deposit their checks." The CU began offering member capture nearly two years ago through Agile Home/Office from VSoft, the Duluth, Ga.-based banking and payments solutions provider.
In April, AFCU made member capture easier to use when it enabled single sign-on to the service within Internet banking, she said. Perhaps that's why remote deposits have grown to about $172,000 per month in December, up from a monthly average of $100,000 in 2010, said Palmer.
The number of active users of remote capture has increased to 10%, up from 4% in April, she said. About 3% of the total membership uses the home capture product.
Member capture hasn't lessened deposits at other AFCU channels, Palmer said. "We've actually added to our total monthly deposits."
Out-of-state deposits have also grown. "If you give members enough services, they run out of reasons to leave you even if they move out of town," explained John Reneslacis, director of solutions engineering, VSoft. "AFCU's overall growth in deposits is probably some combination of new membership growth and a higher rate of retention."
The 100 other banks and credit unions in Arkansas believe consumer capture is too risky, suggested Palmer. "There's a fear of this service. Other institutions fear the fact that the check wasn't presented at the teller line, and they don't have it sitting in front of them."
AFCU takes a high-touch approach to mitigating risk from this high-tech service. "I have an employee who literally looks at each check that comes through; verifies it against the member's relationship with us; and approves the check," Palmer said.
If manual review becomes inefficient, AFCU can take advantage of VSoft's custom threshold review schedules, which will automatically approve checks that are less than a predetermined amount from trusted members, said Renee Hill, EFT check image supervisor at the CU.
Member check capture is actually less risky than teller deposit, Palmer added. "There's a lot of turnover in the teller line, and tellers don't always catch check fraud."
The VSoft solution contains a duplicate detection feature that prevents home-deposit checks from being deposited twice-a feature that Palmer said she longs to have interfaced into the CU's branch capture solution so that checks deposited remotely can't be deposited again at a branch.
