Wachovia Corp. is the latest bank to introduce a remote-capture application.
The Charlotte company said Monday that its business customers are already using its image system to make deposits by converting paper checks into electronic files and transmitting them to Wachovia.
Jennifer O’Keefe, a vice president for treasury services in the product solutions group, said the technology “will become one of our lead products domestically in 2005” and could become even more important abroad.
Wachovia has more than 700 foreign banks using its cash letter product in 86 countries, and “we’d like to convert all of them over to an automated system by 2006,” Ms. O’Keefe said.
Few banks are ready now to settle transactions with images, but many realize that remote capture is an easy first step into the imaging world and that corporate customers are a natural target market.
Companies including NetBank Inc. and First Horizon National Corp. provide a similar service to their business customers, and Bank of America Corp., Bank of New York Co., E-Trade Financial Corp., HSBC Bank USA, and BB&T Corp. have announced that they are planning or pilot testing remote-capture services.
Ms. O'Keefe said customers need an Internet connection to use the product. One customer, Intercam Casa de Cambio SA de CV, a payment and currency exchange company in Mexico City, said the technology trimmed a days-long deposit process to just an hour.
Joe Cornelius, another vice president for treasury services at Wachovia, said the product is key to its Internet banking strategy. Wachovia almost completely electronifies the banking relationship with its corporate customers, and there is just one remaining paper matter to address, he said. "If we just solve the cash issue, we've got the problem solved."
Gwenn Bezard, a senior analyst for the Boston market research firm Celent Communications LLC, said that "with the rise of Internet banking, you still had a banking system reliant on paper checks." A remote-capture service "provides the missing component to electronic banking."
Wachovia plans to market the scanners aggressively in 2005, mainly to customers outside of its branch map, Mr. Cornelius said. "It will provide us with the ability to take deposits" from corporate customers that are "not within our footprint," he said.
Similar technology can also be used to transmit image files from a branch to a check processing center. Wachovia had said earlier that when it started opening branches in Texas in February, it considered using check scanners in its branches rather than build a nearby check processing facility.
It eventually abandoned that plan, but Mr. Cornelius said Wachovia is now preparing to put check scanners in its branches.
Bank of America has said that its own strategy involves convincing its corporate customers to close accounts at other banks in areas where B of A has no branches. It says that by giving customers remote capture devices, it has eliminated their need for a local branch.
Mr. Bezard said remote capture is "clearly a way for big banks to compete with small to midsize banks." "It's going to impact how banks compete against each other," he said, "and clearly, as we move to electronic images, it's going to give an edge to large banks" that offer the technology, "or to nimble players who serve a niche, like NetBank."
