New innovation in remote deposit capture is coming fast as banks move into mobile capture and combine automated check deposits with other mobile and web financial services.
Three RDC providers — Andrew Tilbury, CMO Bluepoint Solutions; Dave Duvall, senior solutions engineer at VSoft; and Rick Cusimano, managing director of ProfitStars — recently sat down with BTN to discuss the latest developments in RDC, including improvements in reporting transaction details, how a move toward Saas-enabled deployment will help smaller institutions embrace RDC, the differences between corporate and consumer capture, and how mobile changes the game.
BTN: Where are you finding success in RDC deployments?
Duvall: The successes are coming through upfront planning that the financial institution does in terms of marketing the product and aligning with their client base. Also, it's important that the institution's back office understands [RDC]. They are the ones that support the clients when issues arise, so they have to have a good feel for how the product works.
Tilbury: One of our launch partners went live about a year ago, and launched it very slowly at first. They didn't advertise it in the beginning. Once they got comfortable with their pilot program, they started to promote it more, and found that [the use increased quickly]. One reason was they had it integrated with mobile banking apps.
Cusimano: One of the successes that we've found both for large banks that want RDC in house and other banks that want an ASP solution is they are [all] looking for a common way to serve up different types of [digital financial] solutions and wrap that around RDC.
BTN: Do most institutions keep RDC in-house or do they outsource it?
Duvall: Most FIs have it onsite, though we do have one large client that's using it in software-as-a-service mode…more institutions will probably go to Saas in the future.
Cusimano: As we see community banks and credit unions move into RDC, we'll see more [hosted RDC platforms]. You don't need the capital outlay and the time to market is also faster.
Tilbury: We've seen a group of institutions that are larger that have those solutions in house…they are not as comfortable with a hosted deployment. The smaller to medium sized institutions see value in having it hosted. It's less costly and doesn't take up as many technical resources.
Duvall: I agree. It depends on the market segment. Community banks are less able to fund deployment so they are more apt to look at a hosted model.
Cusimano: Either way, the institutions are going to want to control things like deposit limits and the other security measures that they are going to want to have [control over those elements].
BTN: How do you distinguish between business and consumer RDC?
Duvall: The biggest difference is the limits on deposits that are put in [by the institutions] to mitigate risk. With consumers you are not looking for somebody who's going to be depositing ten to 12 items per day. You are maybe looking at one or two per week. With merchants you are looking at a higher volume, so you have to set limits based on market segment. You need to understand the risk that a financial institution is willing to take form a merchant or a consumer.
BTN: How does mobile RDC change the game?
Tilbury: With mobile, we see it as a big equalizer for a financial institution of any size. Smaller institutions can compete with large banks …mobile seems to be quickly becoming a must-have technology. Even though the deployment [of mobile RDC] isn't widespread, based on the adoption rates and usage that we are seeing with institutions [that are offering it], it will trickle to [all] institutions and could be as common as ATMs.
BTN: What new tech challenges does mobile RDC introduce?
Duvall: The transaction alert has to be instantaneous. It can't come two or three days later. If the image is bad, or if the bank can't accept the deposit, or if the deposit is exceeding a limit, the user has to know that right away. With mobile apps, you have to push info out to the customer immediately.
Cusimano: [With mobile] consumers are saying 'what else can you help me with?' So RDC has to go with P2P or something else that can be offered or bundled.
BTN: On the subject of bundling, how important is it to link mobile RDC with mobile banking and other financial services apps?
Cusimano: The expectation of people is they will be able to do all of these things. Some of the larger institutions have done advertising around these other features, such as person-to-person payments via mobile or moving money around.
Tilbury: Institutions want to use mobile as a way to keep customers engaged. Financial institutions have a very big threat with Paypal and Google Wallet. If financial institutions can offer new transactions along with mobile RDC, they can make a strong case to keep all of these services in the institution.
BTN: Are institutions starting to incorporate mobile RDC directly into mobile banking?
Duvall: You have the large banks that have jumped full force into mobile [bundling]. Community bank and smaller banks see this as a valuable resource, but there's been a hesitancy to integrate RDC fully with mobile banking from a cost perspective. When we look at mobile banking applications, we're trying to make it cost effective to integrate RDC with mobile banking. Then we'll see mobile adoption take off as the integration takes off.
BTN: How important is overall transaction reporting?
Duvall: The information needs to be instantly available to the bank, consumer or merchant that's making the deposit. That includes the mages and the data associated with the product. Most of these RDC systems are taking information out of the deposit and putting it into the merchant's accounting system. So you have to have this information available to merchants and banks immediately. The information also has to be archived and available for future use. So if there's an audit a year from now, the merchant or bank can have information on payments and deposits at the drop of a hat.
BTN: How does the volume of check usage impact RDC's development?
Tilbury: The decline in check usage and volume is one of the things that we've been talking about with customers for the past few weeks, along with the fact that the biggest banks in the country are now charging customers to use debit cards. Debit has replaced check usage as the most common payment method, It makes me wonder what the fate of the paper check is, and if checks will increase as the other payment methods start to have fees associated with them.
