Zions Bancorp.'s NetDeposit Inc. has split its operations into two units to boost sales of its hosted check-imaging services, especially its remote capture capabilities.
NetDeposit, which began offering a hosted imaging service in February of last year, said Wednesday at its annual customer meeting in Deer Valley, Utah, that it has created two new units: NetDeposit Licensed Solutions, which will offer software, and NDpro Payment Services, which will offer hosted services.
Danne Buchanan, NetDeposit's chief executive, said in an interview that the split reflected the growth of the imaging market. "We started without really understanding how big the market was going to be."
The initial emphasis of the service unit will be image capture for banks' business clients, but "directionally, we will move all our products into a hosted environment, including branch," he said.
The importance of hosted remote capture was underscored last week when Metavante Corp. announced that it would provide imaging software and services through Brink's Co. of Richmond, Va., the nation's largest operator of armored cars, for banks that want to outsource their item processing. Brink's, which had previously used software from NetDeposit to offer similar services on its own, said that Metavante's hosted service was more in line with its needs.
Remote image capture was one of the first services to take off after the Check Clearing for the 21st Century Act took effect in October 2004. In an American Bankers Association survey published in March in the ABA Banking Journal, 58.2% of community banks called remote capture one of their top three technology spending priorities, ahead of Internet banking.
Bob Meara, a senior analyst at the Boston research and consulting firm Celent LLC, said in an interview Wednesday that banks of all sizes have embraced imaging technology. "It was clearly the large cash management banks that led the gold rush, but an astonishing number of smaller institutions have come online in the last year — over 2,000 of them."
By yearend more than 3,500 will offer remote capture, he predicted. With paper checks in decline, supplanted by electronic alternatives, image services hosted by vendors "are going to be increasingly valuable to banks of all sizes."
John Leekley, the chief executive of RemoteDepositCapture LLC of Atlanta, said that a number of NetDeposit rivals already offer hosted versions of their remote-capture software, including RDM Corp. of Waterloo, Ontario, and Metavante, the processor being spun off by Marshall & Ilsley Corp.
"NetDeposit is moving in lockstep, it seems, with where the industry is going," Mr. Leekley said. NetDeposit needed to increase the attention to its hosted offering, because most of the nation's biggest banking companies — historically the vendor's primary target market — have made their strategic decisions at this point, he said.
"That leaves the majority of the other banks in the industry, and the majority of banks are smaller banks," said Mr. Leekley, whose company operates the Web site RemoteDepositCapture.com. "They're backed into a corner. They have to act fast, they have to act quickly, and they don't have the resources to develop this capability in-house."
Chris Styga was named the head of NetDeposit Licensed Solutions, which will develop and maintain software that banks install on their own computers. NDpro Payment Services will be a customer of his unit. Jeff Johnson was named the head of NDpro Payment Services, which will provide hosted remote deposit capture and image cash letter services.
They both will report directly to Royce Brown, NetDeposit's president and chief operating officer.
