Integration issues stymie RDC growth among government users

By Mark Brousseau

One positive result of the Check 21 legislation has been the adoption of remote deposit capture, which uses imaging technology to truncate checks at the point of presentment, in turn, streamlining processing, accelerating funds availability, and significantly reducing transportation costs. While remote deposit capture has been one of the most successful banking products of all time (enjoying a faster adoption than even online banking), you would never know it from the results of the 2010 Government Payment and Document Processing Survey conducted by TAWPI and IAPP.

Only 16.2 percent of all survey respondents currently use remote deposit capture. Among state revenue agencies, 17.4 percent of respondents currently use remote deposit capture. The adoption of remote deposit capture was strongest among the county government entities that responded to the survey, with half (50 percent) indicating that they use the technology. None of the (non-revenue) state agencies or city government entities that responded to the question use remote deposit capture.

Dave Bracken, vice president and senior account manager for Cash Management Solutions, Inc., says the low adoption rate of remote deposit capture among government users doesn’t mean that the need isn’t there for out-of-footprint collection solutions; instead it speaks to the complexity of integrating this type of technology without having to replace their entire legacy remittance processing system.

“A standalone remote deposit capture solution doesn’t provide updates to a government user’s internal tax systems,” Bracken explains. “And this ‘associating information’ is as important as the funds themselves. For remote deposit capture to be effective for a government user, it needs to be an extension of their centralized processing system. For most users, this presents an integration issue.”

Despite this challenge, Bracken predicts that more government users will adopt remote deposit capture – or “split source” solutions – into their operations as they replace their highly customized, “one-off” applications – which are difficult to upgrade – with more flexible and open platforms.

“The problem isn’t a lack of need. The problem is in effective implementation,” he concludes.

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