Problem: How to provide convenient services when branches are hours apart?
Solution: Deploy mobile banking including remote deposit capture.
When Town & Country Bank was approached early in 2011 by one of its longtime vendor service providers about testing a new smartphone check deposit capability to better serve its rural business and retail customers by letting them deposit funds with their mobile phones instead of driving hours to a branch, the Salem, Mo.-based community bank jumped at the chance to pilot the product.
"We were wanting to offer more feasible ways for our customers to be able to bank with us, and doing it by the mobile channel was an avenue that we felt we needed to provide our users," says Diane Glastetter, SVP at Town & Country.
Tammy Price, Town & Country's retail sales manager and VP, adds that the smartphone capability enabled the bank to extend the reach of its 11 branches: "One unique thing about our market is that our customers are so spread out," she says. "Some branches, there may be an hour between locations. So the appeal of this is that, if customers have mobile service, then they can use mobile check deposit, and they can save a trip to the bank. So we can be their bank wherever they are, which was really appealing, because that's going to build retention."
After receiving positive feedback from testing with several customers, the bank launched smartphone check deposit on April 26, 2012, with the help of Vantiv, the payment processing and electronic funds transfer provider that went public March 21, 2012 after being spun-off from Fifth Third as Fifth Third Processing Solutions in 2009; and TransCentra, a rebranded combination of J&B Software and Regulus Group, which 3i Infotech Financial Software purchased in October 2007 and June 2008, respectively, and sold in June 2011 to private equity giant Cerberus Capital Management. Cerberus renamed the former 3i combined payments and processing group, TransCentra, in December 2011.
The original agreement to test the mobile check deposit capability at Town & Country was between the bank and Fifth Third Processing Solutions and 3i Infotech. Fifth Third Processing Solutions changed its name to Vantiv in June 2011. J&B was known for providing mobile software via the help of mobile deposit functionality from Mitek, J&B's technology services provider.
In the Town & Country mobile check deposit arrangement, TransCentra hosts Mitek's imaging system and server software, which captures the images and reviews checks for approval, while Vantiv provides its Jeannie debit network over which the deposit transactions ride.
"That means that we process these transactions in real-time through the Jeannie debit network," says Peter Kulik, VP of product management and director of mobile payments at Vantiv. "What that means for the financial institutions like Town & Country Bank is there's no core integration required for deposit posting."
At the end of each business day, Town & Country accepts the image cash letter file TransCentra creates and merges those mobile deposit items with over-the-counter teller deposits, and the bank sends that completed work to its check clearing agent. "Not all financial institutions can do that," Kulik explains. "Some community banks have to send the file direct to their check clearing agent or to the Fed. But what that means from Town & Country's perspective is the mobile deposit items can be handled with the same operational processes that they handle over-the-counter deposits. So, what are called 'day two' activities, like returned item processing, leverages all the existing operational practices."
A concrete resurfacing operator who piloted the service said it saved him a Saturday morning trip to the bank each week, Glastetter says, which helped give Town & Country executives confidence to launch the service to all the bank's customers.
"We felt we could retain customers because they could deposit their checks any time," Glastetter says. "When we started with the mobile check deposit, our goal was to target the customers that did not live close to the bank. Or if it was a business that was paid in maybe just two or three checks a week, then they could deposit those checks with their phones at their convenience, and not have to rush to the bank in the evening or on Saturday morning because they couldn't get to a branch during normal business hours."
The service works best for smaller business and retail customers who receive roughly five to seven checks or less per week. The bank also offers hardware-based check scanning to customers who want to use such services onsite at their businesses via Jefferson City, Mo.-based vendor CSPI. "But it isn't cost-justified for us to purchase a machine for a customer that gets just a few checks per week," Glastetter says.
The bank plans periodic marketing of mobile check deposit: Employees will be incentivized again toward yearend to boost its promotion, Price says.