Remote capture deposit systems have been offered almost exclusively to businesses, but banks are now considering adapting the technology for consumers.
Some financial companies have considered this in the past, but technical issues — notably the fact that few consumers have check scanners — pushed the idea to the back burner. Vendors are developing new tools, however, to capture check images that will be easier to put into people's hands, including the cameras built in to some mobile phones. And as banks look for new ways to win and serve customers, remote capture for the consumer market is getting a second look.
Taylor Vaughan, the director of treasury management at First Horizon National Corp., said that debit cards and direct deposit are now the main ways that everyday consumers use their bank accounts. "The traditional checking account is not the same reconciliation tool that customers used to use," he said in an interview.
Offering a way for people to electronically deposit checks "would be less expensive than the alternative," building new branches, he said.
Many banks already offer online services to people who do not live within its branch footprint, an option that has become more viable as electronic payments become more common.
Even customers with easy access to a branch or ATM may prefer to use a remote capture system from their homes, he said. "You'd be surprised how many corporate customers we've sold our corporate product to that are right across the street from a branch."
First Horizon has been offering remote capture for business customers since 2004, making it one of the early movers in the market, and Mr. Vaughan said the Memphis banking company is considering adapting the service for consumers, though no decision is likely to be made for at least six months.
Other banks are also considering consumer remote capture, according to Bob Meara, a senior analyst at the Boston market research firm Celent LLC.
In a survey of 157 U.S. banks last month, Mr. Meara said, one in five had "specific plans to adopt consumer capture solutions," and another one-fifth said they were considering it.
Remote capture systems let people use a scanner to create a digital image of a paper check and transmit it to the bank for deposit electronically.
One banking company already has a consumer product available. USAA Federal Savings Bank has been offering it for just more than a year. The San Antonio bank serves military people and their families, who are often stationed far from its only branch.
Previously, the only way these customers could deposit checks was by mail, but using the Deposit@Home service it unveiled in December 2006, they can scan checks at a home computer and transmit files to the bank through a secure Internet connection.
USAA said last May that it had 200,000 users and another 10,000 customers were signing up every week. (The bank would not provide an executive to discuss the service's current use.)
Early critics of remote capture for consumers have said that few people would want to buy scanners to make deposits, and one bank is planning to introduce a service next quarter that would avoid that issue, according to Mitek Systems Inc.
The San Diego vendor has developed an application that lets people capture check images with their mobile phone cameras, and James DeBello, its chief executive, said he has a customer, which he would not name.
"I look at the phone as a scanning device in your hand," Mr. DeBello said. Mitek was expected to announce its software today.
The company says its technology works best with two-megapixel cameras, which are not widely available. However, Mr. DeBello said, enough phones meet remote capture requirements today to make its product appealing to banks, and the image capabilities on phones are improving rapidly. "The quality of a camera on a phone is becoming extraordinary," he said.
A phone equipped with Mitek's software would let the user snap a photo of the front and back of an endorsed check, then send the images to the bank for deposit. The software would determine whether the photo is clear enough to deposit and could prompt the consumer to take another photo if it determined that the image is inadequate.
The software has other uses besides consumer deposit, Mr. DeBello said. Paper-intensive tasks, such as insurance claims, could be sped up if documents could be submitted through a camera phone, he said.
The bank could also choose to let customers pay bills by taking a photo of the bill and requesting an electronic payment in that amount, he said.
Celent's Mr. Meara said that, as recently as two years ago, banks had almost no interest in remote capture for consumers but that businesses' enthusiasm for the systems prompted many financial companies to reconsider. And even if the technology does become a hit with consumers, however, "I don't think consumer capture is going to be adopted as broadly as remote deposit is among businesses," he said.
One important limitation is that not every consumer finds it inconvenient to go to the branch or an ATM to make a deposit; for example, USAA's success is driven by its customers' wide deployments, Mr. Meara said.
John Leekley, the founder and chief executive of RemoteDepositCapture LLC, an Atlanta consulting company, said that, for remote capture to take off with consumers, "it really needs to leverage some type of technology that the consumer has or is already familiar with," as USAA has done and Mitek is planning to do.
"2008 is going to be a very telling year, especially for small businesses and consumers," Mr. Leekley said. "The technology as we have it right now is not ideally suited for the consumer, but it is rapidly improving and getting easier for banks to deploy."
Wealthy consumers, small-business owners, and people who frequently travel are the most likely to be interested in using remote capture, Mr. Leekley said. Other consumers may find the technology appealing but lack the motivation to adopt it.
But even the most reluctant consumers may someday have the option to deposit their checks electronically from their homes, he said, because there is a strong business case for banks to make the technology available to them. "Getting new deposits to the bank, more now than ever, really is the lifeblood of the bank," he said.
