By Vijay Balakrishnan of StratEx LLC
That we live in a wired (or perhaps more appropriately, a wireless) world is an oft repeated truism. As I work on this post, I am using the Internet. My mobile phone just beeped with a text message. An intrepid bunch of schoolmates are using Facebook to organize a high school reunion half a planet away. Reunion after how many years, you say? Well, let's just say it is enough for many grey hairs.
If the drumbeat of news is to be believed, consumers are leaping en masse to interacting with their financial institutions through mobile phones and other remote channels. You can now snap a picture of a check with your phone and deposit it in your bank from anywhere in the world. Remote Deposit Capture (RDC) allows businesses and consumers to scan checks from the comfort of their offices or family rooms, and zap across images for deposit. The perfect storm of convenience and technology should mean that very few people visit their neighborhood branch anymore, right? Wrong!
An item (no pun, honest!) in The 2010 Federal Reserve Payments Study caught my eye. Yes, the number of checks written has declined from about 30 billion to 24.4 billion. However, only 13 percent of checks deposited were received by financial institutions as images. That means a respectable 87 percent of checks were deposited physically. So, despite all the noise about check deposits getting virtualized, there still is a healthy number of people walking into branches to make deposits.
Now, your take on the physical branch versus self-service debate will dictate whether you see this glass half full or half empty of your beverage of choice. Proponents of RDC will point to the enormous growth potential in the remaining 87 percent. The same percentage will be looked at by some retail bankers as rationale to invest in branches.
At the risk of being a fence sitter (come to think of it, sitting on an actual fence can be acutely uncomfortable), let me say that both views are correct. RDC will continue its growth, albeit at its present course and speed- I don't see a "big bang" transformation in that direction. I do, however, see an opportunity for investment in technologies like teller capture and enhanced training for tellers to go beyond their current role as deposit takers. Teller capture uses technology to capture images, proof, and balance deposits at the teller station. It reduces keystrokes and data entry errors. It also provides more "heads up" time for tellers to interact with customers, where additional training can enhance the customer experience.
Transformation is a funny thing. Just when you think the new and different will swamp the world, something from the hoary past reaches out to remind us of its existence. Success will go to those who craft strategies to leverage both.
Vijay Balakrishnan is president of StratEx LLC. He can be reached at 770-598-5747.
Showing posts with label RDC. Show all posts
Showing posts with label RDC. Show all posts
Thursday, January 27, 2011
Friday, September 24, 2010
"What are you doing here?"
By Greg Lusch (glusch@ibml.com), ibml (www.ibml.com)
With all of the banks and financial services companies participating in this week's Healthcare Payments Automation Summit (HPAS) in Boston, the healthcare providers and payers in attendance could be excused for momentarily thinking that they were in the wrong place. But they weren't, and neither were their fellow attendees from banking and financial services.
When a single market represents a whopping 17 percent of the country's Gross Domestic Product (GDP) -- as healthcare does -- lots of companies will be looking for ways to cash in. Banks and financial services companies are no exception. And based on my conversations at HPAS, more providers are open to help from banks in automating healthcare payments.
For instance, there was a lot of conversation at HPAS about adapting bank lockbox services to process explanation of benefits (EOBs) and other medical documents. According to the results of a survey released by IAPP-TAWPI at the event, 34 percent of healthcare providers already use a bank lockbox for healthcare payments. Undaunted by the increased security and privacy regulations under the HITECH Act, it is clear that even more banks are pushing forward with lockbox services aimed squarely at hospital and physician practice groups. In fact, the participants on a panel at the event unanimously predicted that the percentage of providers that use a bank lockbox would climb, while a speaker in another session said he expected "slow but steady" growth for both bank and provider-based EOB solutions.
And if HPAS is any indication, banks also are making headway with remote deposit capture (RDC) solutions targeted at the healthcare space, namely, rising patient self-pay and co-insurance/co-payment obligations. According to the IAPP-TAWPI survey released at HPAS, 22 percent of providers currently use RDC. Several vendors of RDC solutions exhibited at the event (Creditron, EPSON and WAUSAU were among them), and a few providers shared case studies of their experiences with the technology as part of the conference agenda (faster funds availability was cited as a key benefit). A common refrain among healthcare providers at HPAS was that lower bank fees have greatly improved the business case for RDC, while banks have done a better job of adapting their solutions to the unique needs of providers.
The role of banks in the healthcare space also was a dominant -- and sometimes heated -- topic during the Healthcare Payments Council meeting that immediately followed HPAS.
The good news for banks looking to crack the healthcare space is that most HPAS attendees believe that while automated payment transactions (claims, remittances and payments) will continue to make gains, paper will be a fact of life in the industry for the foreseeable future.
And that is why banks were at HPAS.
With all of the banks and financial services companies participating in this week's Healthcare Payments Automation Summit (HPAS) in Boston, the healthcare providers and payers in attendance could be excused for momentarily thinking that they were in the wrong place. But they weren't, and neither were their fellow attendees from banking and financial services.
When a single market represents a whopping 17 percent of the country's Gross Domestic Product (GDP) -- as healthcare does -- lots of companies will be looking for ways to cash in. Banks and financial services companies are no exception. And based on my conversations at HPAS, more providers are open to help from banks in automating healthcare payments.
For instance, there was a lot of conversation at HPAS about adapting bank lockbox services to process explanation of benefits (EOBs) and other medical documents. According to the results of a survey released by IAPP-TAWPI at the event, 34 percent of healthcare providers already use a bank lockbox for healthcare payments. Undaunted by the increased security and privacy regulations under the HITECH Act, it is clear that even more banks are pushing forward with lockbox services aimed squarely at hospital and physician practice groups. In fact, the participants on a panel at the event unanimously predicted that the percentage of providers that use a bank lockbox would climb, while a speaker in another session said he expected "slow but steady" growth for both bank and provider-based EOB solutions.
And if HPAS is any indication, banks also are making headway with remote deposit capture (RDC) solutions targeted at the healthcare space, namely, rising patient self-pay and co-insurance/co-payment obligations. According to the IAPP-TAWPI survey released at HPAS, 22 percent of providers currently use RDC. Several vendors of RDC solutions exhibited at the event (Creditron, EPSON and WAUSAU were among them), and a few providers shared case studies of their experiences with the technology as part of the conference agenda (faster funds availability was cited as a key benefit). A common refrain among healthcare providers at HPAS was that lower bank fees have greatly improved the business case for RDC, while banks have done a better job of adapting their solutions to the unique needs of providers.
The role of banks in the healthcare space also was a dominant -- and sometimes heated -- topic during the Healthcare Payments Council meeting that immediately followed HPAS.
The good news for banks looking to crack the healthcare space is that most HPAS attendees believe that while automated payment transactions (claims, remittances and payments) will continue to make gains, paper will be a fact of life in the industry for the foreseeable future.
And that is why banks were at HPAS.
Saturday, September 4, 2010
Why Can't Tellers be Sellers?
By Vijay Balakrishnan, president of StratEx, LLC (vijay.balakrishnan90@gmail.com)
Stepping into a debate that is as old as retail banking is perhaps unwise. There are passionate adherents ranged on both sides of the question. To some, the issue is not whether, but should tellers be sellers?
The question brings the raison d'etre of the retail branch network into sharp relief. Are branches retail storefronts with the primary mission to enhance customer relationships, or are they collection points for myriad transactions processed by centralized back office operations centers? Is the driving imperative one of customer intimacy, or does operational efficiency rule the roost?
A tilt towards operational efficiency has traditionally driven retail banking, with occasional overtures to the selling side of the equation. These overtures, however, tend to be fleeting, and with few exceptions, have not survived beyond some concerted marketing and employee incentive programs.
To understand why the push towards serving and selling the customer has not been sustainable, consider a few points. Making check deposits is by far the main reason customers visit a branch. When they do visit, the teller is the person they most often interact with. Regardless of all the training and incentives that may have been put in place, consider what tellers actually do. They are heads down punching numbers into keyboards (try counting the number of teller keystrokes the next time you're in a branch). They have barely enough time to complete the data entry and squeeze out a quick thank you before the next customer is at their window. Imagine a Neimann Marcus salesperson wordlessly packing what you've picked out and intently ensuring that the bow on the package is just right! Yes, the analogy is not quite right- but you get the picture.
So despite many a marketing push, it is the fundamental transaction tether that yanks the teller back into the role of a frontline operations clerk- the first cog in the vast infrastructure that we put in place to process paper checks, featuring planes, trains, automobiles and giant "paper factories".
There is an alternative, courtesy the legislative cover of Check 21 and advances in imaging and recognition technology. Teller Capture allows the teller to drop the entire deposit into a small foot print scanner and interact heads up with the customer, while an imaging application reads all the necessary information, ensures the transaction is balanced, and prints out a receipt when done. Teller Capture eliminates teller induced data entry errors, and also catches math errors up front. This "ready-to-post" transaction at the very beginning of the deposit stream results in major efficiency savings further down the value chain. It is as close to straight-through-processing as one can get in the check world.
"Not so fast," say some. "You want to make my tellers into check operators?" The reality is that the opposite is true. There is now evidence of major savings in teller time per deposit, including data from a Top 5 U.S. bank of having reduced keystrokes from 75 to 5!
"What about the cost of a scanner and software at every station?" challenge others. "It is really difficult to integrate these capture applications with teller systems." The cost per node for both hardware and software is steadily declining, making it well worth the while to examine the return on investment. The hard numbers on transportation savings, back office labor elimination, and funds availability make it interesting- leave alone the soft benefits in customer service and added sales. Capture systems are also increasingly being integrated into teller systems, both by teller vendors that have acquired check-capture technology, and pure play check imaging vendors that have certified their applications with leading teller vendors.
Coming back to the tellers-to-sellers paradigm, what do you do with the saved time? Do you use it to push even more transactions through? Do you have tellers refer customers to other branch personnel based on prompts from an integrated CRM system? Or do you have tellers take on more of a sales and service role themselves? Those are decisions that will be driven by your overarching strategic intent. Do you want tellers to be sellers in the first place? As you ponder that question, you may want to look at teller capture as an opportunity to cut the transaction tether that keeps pulling you back, yo-yo-like, to the paper factory of another era.
What do you think?
Stepping into a debate that is as old as retail banking is perhaps unwise. There are passionate adherents ranged on both sides of the question. To some, the issue is not whether, but should tellers be sellers?
The question brings the raison d'etre of the retail branch network into sharp relief. Are branches retail storefronts with the primary mission to enhance customer relationships, or are they collection points for myriad transactions processed by centralized back office operations centers? Is the driving imperative one of customer intimacy, or does operational efficiency rule the roost?
A tilt towards operational efficiency has traditionally driven retail banking, with occasional overtures to the selling side of the equation. These overtures, however, tend to be fleeting, and with few exceptions, have not survived beyond some concerted marketing and employee incentive programs.
To understand why the push towards serving and selling the customer has not been sustainable, consider a few points. Making check deposits is by far the main reason customers visit a branch. When they do visit, the teller is the person they most often interact with. Regardless of all the training and incentives that may have been put in place, consider what tellers actually do. They are heads down punching numbers into keyboards (try counting the number of teller keystrokes the next time you're in a branch). They have barely enough time to complete the data entry and squeeze out a quick thank you before the next customer is at their window. Imagine a Neimann Marcus salesperson wordlessly packing what you've picked out and intently ensuring that the bow on the package is just right! Yes, the analogy is not quite right- but you get the picture.
So despite many a marketing push, it is the fundamental transaction tether that yanks the teller back into the role of a frontline operations clerk- the first cog in the vast infrastructure that we put in place to process paper checks, featuring planes, trains, automobiles and giant "paper factories".
There is an alternative, courtesy the legislative cover of Check 21 and advances in imaging and recognition technology. Teller Capture allows the teller to drop the entire deposit into a small foot print scanner and interact heads up with the customer, while an imaging application reads all the necessary information, ensures the transaction is balanced, and prints out a receipt when done. Teller Capture eliminates teller induced data entry errors, and also catches math errors up front. This "ready-to-post" transaction at the very beginning of the deposit stream results in major efficiency savings further down the value chain. It is as close to straight-through-processing as one can get in the check world.
"Not so fast," say some. "You want to make my tellers into check operators?" The reality is that the opposite is true. There is now evidence of major savings in teller time per deposit, including data from a Top 5 U.S. bank of having reduced keystrokes from 75 to 5!
"What about the cost of a scanner and software at every station?" challenge others. "It is really difficult to integrate these capture applications with teller systems." The cost per node for both hardware and software is steadily declining, making it well worth the while to examine the return on investment. The hard numbers on transportation savings, back office labor elimination, and funds availability make it interesting- leave alone the soft benefits in customer service and added sales. Capture systems are also increasingly being integrated into teller systems, both by teller vendors that have acquired check-capture technology, and pure play check imaging vendors that have certified their applications with leading teller vendors.
Coming back to the tellers-to-sellers paradigm, what do you do with the saved time? Do you use it to push even more transactions through? Do you have tellers refer customers to other branch personnel based on prompts from an integrated CRM system? Or do you have tellers take on more of a sales and service role themselves? Those are decisions that will be driven by your overarching strategic intent. Do you want tellers to be sellers in the first place? As you ponder that question, you may want to look at teller capture as an opportunity to cut the transaction tether that keeps pulling you back, yo-yo-like, to the paper factory of another era.
What do you think?
Friday, July 30, 2010
The evolution of remote capture
By Wally Vogel (www.wvogel@creditron.com)
When remote deposit capture (RDC) first burst onto the scene, it was billed as a way for companies to eliminate daily trips to the bank. Today, reducing the time and costs associated with depositing checks is still a key factor in the adoption of the technology. But application of the technology has also evolved into a compliment to remittance processing, such as a way for far-flung sales agents to capture check images more quickly – helping to drive faster funds availability and enhanced service.
RDC is a product of The Check Clearing for the 21st Century Act (“Check 21”), a federal law enacted in 2004 that allows billers to electronically capture and transmit (via X9.37 file format) images of checks to their financial institution for clearing. Integrated balancing and automated character recognition tools assist billers in building balanced deposits. Once deposits are transmitted, original checks are truncated (retained) and eventually destroyed. Upon receipt of the file, the bank validates the items, performs any necessary corrections, and creates an image cash letter (or ICL) for deposit.
A Compliment to Remittance Processing
It didn’t take long for billers to recognize that RDC could be used to compliment -- and streamline -- remittance processing, which has historically been a back-office task. By capturing payment images and data at the point of presentment, and integrating the images and data with the back-office payments stream -- rather than redirecting the payments to the back-office -- billers can accelerate processing and funds availability; eliminate the costs to ship or transport payments to the back-office; offload some of the work from their back-office staff (and maybe even offload the work from their staff altogether); free back-office staff to perform other functions; and reduce paper handling and the associated costs. What’s more, capturing payments information sooner provides benefits such as faster posting, better visibility into receivables, and faster responses to customer inquiries.
The best part: remote deposit capture accomplishes all of this without requiring much upfront cost.
New RDC technologies are further expanding the applicability of the technology as a compliment to back-office remittance processing. For instance, support for flatbed TWAIN scanners enables consumers or remote employees to capture payments without the requirement for a specialized check scanner. Recognizing that the user in this environment may not be trained in payment processing, software guides the user through the scanning process. Another advancement in RDC is the use of smartphones to capture payment images. This enables field agents to capture payment images without having to transport or ship them to the back-office for processing – greatly speeding posting.
The Bottom Line
By complimenting back-office remittance processing with RDC, funds are available sooner, overall costs are improved, and customer service is enhanced. And because of the low overhead associated with RDC, growth in the biller’s remittance volume can be accommodated without a corresponding growth in the biller’s back-office infrastructure – meaning they can avoid a lot of capital expense.
When remote deposit capture (RDC) first burst onto the scene, it was billed as a way for companies to eliminate daily trips to the bank. Today, reducing the time and costs associated with depositing checks is still a key factor in the adoption of the technology. But application of the technology has also evolved into a compliment to remittance processing, such as a way for far-flung sales agents to capture check images more quickly – helping to drive faster funds availability and enhanced service.
RDC is a product of The Check Clearing for the 21st Century Act (“Check 21”), a federal law enacted in 2004 that allows billers to electronically capture and transmit (via X9.37 file format) images of checks to their financial institution for clearing. Integrated balancing and automated character recognition tools assist billers in building balanced deposits. Once deposits are transmitted, original checks are truncated (retained) and eventually destroyed. Upon receipt of the file, the bank validates the items, performs any necessary corrections, and creates an image cash letter (or ICL) for deposit.
A Compliment to Remittance Processing
It didn’t take long for billers to recognize that RDC could be used to compliment -- and streamline -- remittance processing, which has historically been a back-office task. By capturing payment images and data at the point of presentment, and integrating the images and data with the back-office payments stream -- rather than redirecting the payments to the back-office -- billers can accelerate processing and funds availability; eliminate the costs to ship or transport payments to the back-office; offload some of the work from their back-office staff (and maybe even offload the work from their staff altogether); free back-office staff to perform other functions; and reduce paper handling and the associated costs. What’s more, capturing payments information sooner provides benefits such as faster posting, better visibility into receivables, and faster responses to customer inquiries.
The best part: remote deposit capture accomplishes all of this without requiring much upfront cost.
New RDC technologies are further expanding the applicability of the technology as a compliment to back-office remittance processing. For instance, support for flatbed TWAIN scanners enables consumers or remote employees to capture payments without the requirement for a specialized check scanner. Recognizing that the user in this environment may not be trained in payment processing, software guides the user through the scanning process. Another advancement in RDC is the use of smartphones to capture payment images. This enables field agents to capture payment images without having to transport or ship them to the back-office for processing – greatly speeding posting.
The Bottom Line
By complimenting back-office remittance processing with RDC, funds are available sooner, overall costs are improved, and customer service is enhanced. And because of the low overhead associated with RDC, growth in the biller’s remittance volume can be accommodated without a corresponding growth in the biller’s back-office infrastructure – meaning they can avoid a lot of capital expense.
Wednesday, April 28, 2010
TAWPI @ NACHA Payments
Posted by Mark Brousseau
Mike Packer of J&B Software (pictured) demonstrates the vendor’s Mobile Deposit solution yesterday at NACHA’s Payments 2010 at the Washington State Convention Center in Seattle. The solution, developed by Mitek Systems and incorporating J&B Software’s workflow and check clearing capabilities, enables users to make remote check deposits using mobile smartphones.
“Mobile Deposit makes a lot of sense for companies that don’t have a lot of check volume, such as a business with five to six checks a week,” Packer says, adding that J&B Software would fall into that category since it receives most of its payments electronically. “Banks have been slow to move on this,” he says, noting the vendor has several pilots underway among its customers. “But in five to six months, we expect to have significantly more conversations on Mobile Deposit as bank IT budgets begin to loosen up. SaaS will help adoption by making it easier for banks to set-up mobile deposit.”
Packer says the vendor’s recently introduced SaaS delivery model for Mobile Deposit was generating a lot of interest at Payments 2010. The SaaS delivery model eliminates barriers to entry, allowing organizations to quickly adopt mobile deposit with minimal up-front cost and setup requirements, Packer says. “SaaS extends mobile deposit to millions of potential new users,” Packer says, noting Mobile Deposit is targeted to banks, brokerages, retailers, insurers, consumers and freight companies.
The solution captures check images through a mobile smartphone and prepares them for transmission to the financial institution as Check 21-compliant images using Mitek's mobile IMagePROVE technology. For security purposes, a complete audit trail of where, when and how each check was captured is logged. No data or images are stored on the smartphone, Packer says, and all communication is 128-bit encrypted.
Friday, April 23, 2010
Small businesses eye mobile remote deposit capture
Posted by Mark Brousseau
One in four consumers and 39 percent of small businesses desire mobile remote deposit capture (mobile RDC), a technology that allows an image of a check to be deposited through a camera-equipped mobile phone. That's according to new research from Javelin Strategy & Research. A niche product in 2010, small banks and credit unions are the first to offer mobile RDC to identified trusted consumers as a way to retain customers and grow without reliance on branches.
Per the Mobile Remote Deposit Capture report, smartphones are a key factor in the adoption of Mobile RDC. Consumers need access to the mobile web and the ability to take a two-megapixel digital picture with their camera phone. “If one of the largest financial institutions in the U.S. – Bank of America, Chase, Citibank or Wells Fargo – offers mobile remote deposit capture, you will most likely see a domino effect of the other banks offering the service,” said James Van Dyke, president & founder, Javelin Strategy & Research. “With trust worsening and mobility increasing, large banks can dampen the exodus while moving closer to mobile payments with mobile remote deposit capture. Paper payments die slowly, and as RDC helps with electronification of checks for a death by a thousand cuts.'”
Because nearly three in four of business transactions are made via check, this product also has mass appeal to businesses, which – unlike consumers – could be likely to pay for this service, Javelin concludes.
Other key findings of the report:
• Mobile RDC can be an important element to stem customer attrition or attract new customers without costly infrastructure.
• Already, more than one in four consumers who have been victims of ID fraud has had their checking account number stolen. Financial institutions considering implementing mobile RDC must put tight security measures in place to prevent even more fraud.
• Financial institutions can cut costs by offering the eight in ten of consumers who walked in to a branch to make a deposit or withdraw cash in the last 90 days the alternative to use their phone to make a deposit.
• About one in five of smartphone owners use mobile banking on a daily basis – more than double the rate for consumers who do not own a smartphone.
• Many consumers are ready for RDC now, particularly selected high-income individuals
• Four out of ten tech-savvy consumers view mobile RDC technology as desirable.
“Mobile RDC captures unique attributes of mobile hardware and always-on connectivity, to expand mobile banking relationships. We forecast that by 2014, over half of the U.S. population with mobile phones will be using smartphones, a dramatic escalation from the current 18%. This will provide a solid base of growth for additional mobile RDC services,” said Javelin Strategy & Research Analyst Mark Schwanhausser.
What do you think?
One in four consumers and 39 percent of small businesses desire mobile remote deposit capture (mobile RDC), a technology that allows an image of a check to be deposited through a camera-equipped mobile phone. That's according to new research from Javelin Strategy & Research. A niche product in 2010, small banks and credit unions are the first to offer mobile RDC to identified trusted consumers as a way to retain customers and grow without reliance on branches.
Per the Mobile Remote Deposit Capture report, smartphones are a key factor in the adoption of Mobile RDC. Consumers need access to the mobile web and the ability to take a two-megapixel digital picture with their camera phone. “If one of the largest financial institutions in the U.S. – Bank of America, Chase, Citibank or Wells Fargo – offers mobile remote deposit capture, you will most likely see a domino effect of the other banks offering the service,” said James Van Dyke, president & founder, Javelin Strategy & Research. “With trust worsening and mobility increasing, large banks can dampen the exodus while moving closer to mobile payments with mobile remote deposit capture. Paper payments die slowly, and as RDC helps with electronification of checks for a death by a thousand cuts.'”
Because nearly three in four of business transactions are made via check, this product also has mass appeal to businesses, which – unlike consumers – could be likely to pay for this service, Javelin concludes.
Other key findings of the report:
• Mobile RDC can be an important element to stem customer attrition or attract new customers without costly infrastructure.
• Already, more than one in four consumers who have been victims of ID fraud has had their checking account number stolen. Financial institutions considering implementing mobile RDC must put tight security measures in place to prevent even more fraud.
• Financial institutions can cut costs by offering the eight in ten of consumers who walked in to a branch to make a deposit or withdraw cash in the last 90 days the alternative to use their phone to make a deposit.
• About one in five of smartphone owners use mobile banking on a daily basis – more than double the rate for consumers who do not own a smartphone.
• Many consumers are ready for RDC now, particularly selected high-income individuals
• Four out of ten tech-savvy consumers view mobile RDC technology as desirable.
“Mobile RDC captures unique attributes of mobile hardware and always-on connectivity, to expand mobile banking relationships. We forecast that by 2014, over half of the U.S. population with mobile phones will be using smartphones, a dramatic escalation from the current 18%. This will provide a solid base of growth for additional mobile RDC services,” said Javelin Strategy & Research Analyst Mark Schwanhausser.
What do you think?
Thursday, April 15, 2010
The Changing ISO Space
Posted by Mark Brousseau
Based on what he's heard at the Electronic Transactions Association (ETA) Annual Meeting and Expo this week in Las Vegas, independent sales organizations or ISOs are beginning to struggle in a very saturated credit card market, says Mario Villarreal, president and COO of US Dataworks, Inc. (mvillarreal@usdataworks.com, 281-504-8150). US Dataworks is exhibiting at the ETA event.
"The various ISOs that we talked to [Wednesday] are interested in other payment platforms separate and apart from credit card services," Villarreal explains. "The ISOs understand the RDC [remote deposit capture] market, but are not attracted to it due to the narrow payment focus for a complicated implementation. One ISO representative told me he was looking for more 'bang for the buck.'"
"What ISOs are really looking for is a platform that brings multiple payment types and channels together under a single solution," he says. "The payments industry and the ISO space is changing. The question is which vendor will break away from the traditional way of doing business to win."
What do you think?
Based on what he's heard at the Electronic Transactions Association (ETA) Annual Meeting and Expo this week in Las Vegas, independent sales organizations or ISOs are beginning to struggle in a very saturated credit card market, says Mario Villarreal, president and COO of US Dataworks, Inc. (mvillarreal@usdataworks.com, 281-504-8150). US Dataworks is exhibiting at the ETA event.
"The various ISOs that we talked to [Wednesday] are interested in other payment platforms separate and apart from credit card services," Villarreal explains. "The ISOs understand the RDC [remote deposit capture] market, but are not attracted to it due to the narrow payment focus for a complicated implementation. One ISO representative told me he was looking for more 'bang for the buck.'"
"What ISOs are really looking for is a platform that brings multiple payment types and channels together under a single solution," he says. "The payments industry and the ISO space is changing. The question is which vendor will break away from the traditional way of doing business to win."
What do you think?
Tuesday, April 13, 2010
Maximizing RDC Payback
Posted by Mark Brousseau
Not getting the labor savings you expected from your bank's remote deposit capture solution? Wally Vogel, founder and CEO of Creditron, Inc. (wvogel@creditron.com) is not surprised.
"In instances where checks come in and are posted to accounts receivable, scanning the checks for the bank saves a trip to the bank, but does nothing to aid in reducing data entry, balancing, or exception handling," Vogel explains. "These are the time-consuming parts of posting and depositing payments, and they are not addressed by a remote deposit scanner from the bank."
Vogel adds, "What will save significant time is a complete remittance processing solution which can: scan remittance documents and checks, automatically recognize data to reduce key entry, balance the transaction, and perform look-ups and validity checks to handle exceptions quickly. Of course, a complete remittance processing solution also can update the accounts receivable system and deposit items remotely as well, without requiring the user to re-scan or re-key the checks."
The bottom line: the trick to saving time with remote deposit capture is to handle both sides of the transaction with a single automated solution, Vogel says.
What do you think?
Not getting the labor savings you expected from your bank's remote deposit capture solution? Wally Vogel, founder and CEO of Creditron, Inc. (wvogel@creditron.com) is not surprised.
"In instances where checks come in and are posted to accounts receivable, scanning the checks for the bank saves a trip to the bank, but does nothing to aid in reducing data entry, balancing, or exception handling," Vogel explains. "These are the time-consuming parts of posting and depositing payments, and they are not addressed by a remote deposit scanner from the bank."
Vogel adds, "What will save significant time is a complete remittance processing solution which can: scan remittance documents and checks, automatically recognize data to reduce key entry, balance the transaction, and perform look-ups and validity checks to handle exceptions quickly. Of course, a complete remittance processing solution also can update the accounts receivable system and deposit items remotely as well, without requiring the user to re-scan or re-key the checks."
The bottom line: the trick to saving time with remote deposit capture is to handle both sides of the transaction with a single automated solution, Vogel says.
What do you think?
Monday, February 9, 2009
Identity Theft Up, Costs Down
Posted by Mark Brousseau
An interesting article from The Washington Post on identity theft:
Survey: Identity theft up, but costs fall sharply
By CANDICE CHOI
The Associated Press
Monday, February 9, 2009; 7:54 AM
NEW YORK -- The number of Americans ensnared by identity theft is on the rise, but victims are striking back more quickly and limiting how much is stolen.
In 2008, the number of identity theft cases jumped 22 percent to 9.9 million, according to a study released Monday by Javelin Strategy & Research. The good news is that the cost per incident _ including unrecovered losses and legal fees _ fell 31 percent to $496.
One reason for the spike in cases is likely the worsening economy. Just last month, 598,000 jobs were slashed across the country and unemployment jumped to 7.6 percent.
"The short story is that criminals are getting more desperate," said Jim Van Dyke, spokesman for Javelin, which started tracking identity theft cases in 2003. Last year marked the first time the number of cases rose.
Crimes of opportunity, such as stolen wallets, were linked to 43 percent of cases last year, up from 33 percent in 2007. That might be why women were 26 percent more likely to be victims of identity theft; they reported more cases of lost or stolen information during in-store purchases.
Online access accounted for only 11 percent of cases, according to the survey.
Despite the growing number of victims, the total fraud amount edged up just 7 percent to $48 billion over the previous year. That's because victims are uncovering cases faster to limit losses. Another reason is that financial institutions are taking more steps to thwart thieves, according to the Javelin study.
For instance, more banks now send change of address confirmations to the original address, Van Dyke said.
This prevents identity thieves from rerouting mail to different addresses and delaying victims' awareness that their accounts are siphoned off.
The Javelin study also found identity theft went undetected longer and cost twice as much when victims knew their attackers. More than 10 percent of victims knew their identity thieves.
Despite the rise in cases, there are simple steps people can take to prevent becoming a victim.
To start, leave personal checks and Social Security cards at home and be aware of who's around when giving personal information in public.
Some types of ID theft aren't preventable, however. Someone could get your personal information by hacking into a retailer's database, for instance.
So even if you're careful about protecting your information, monitor financial accounts regularly.
"Identity fraud is all about prevention and detection," Van Dyke said.
An interesting article from The Washington Post on identity theft:
Survey: Identity theft up, but costs fall sharply
By CANDICE CHOI
The Associated Press
Monday, February 9, 2009; 7:54 AM
NEW YORK -- The number of Americans ensnared by identity theft is on the rise, but victims are striking back more quickly and limiting how much is stolen.
In 2008, the number of identity theft cases jumped 22 percent to 9.9 million, according to a study released Monday by Javelin Strategy & Research. The good news is that the cost per incident _ including unrecovered losses and legal fees _ fell 31 percent to $496.
One reason for the spike in cases is likely the worsening economy. Just last month, 598,000 jobs were slashed across the country and unemployment jumped to 7.6 percent.
"The short story is that criminals are getting more desperate," said Jim Van Dyke, spokesman for Javelin, which started tracking identity theft cases in 2003. Last year marked the first time the number of cases rose.
Crimes of opportunity, such as stolen wallets, were linked to 43 percent of cases last year, up from 33 percent in 2007. That might be why women were 26 percent more likely to be victims of identity theft; they reported more cases of lost or stolen information during in-store purchases.
Online access accounted for only 11 percent of cases, according to the survey.
Despite the growing number of victims, the total fraud amount edged up just 7 percent to $48 billion over the previous year. That's because victims are uncovering cases faster to limit losses. Another reason is that financial institutions are taking more steps to thwart thieves, according to the Javelin study.
For instance, more banks now send change of address confirmations to the original address, Van Dyke said.
This prevents identity thieves from rerouting mail to different addresses and delaying victims' awareness that their accounts are siphoned off.
The Javelin study also found identity theft went undetected longer and cost twice as much when victims knew their attackers. More than 10 percent of victims knew their identity thieves.
Despite the rise in cases, there are simple steps people can take to prevent becoming a victim.
To start, leave personal checks and Social Security cards at home and be aware of who's around when giving personal information in public.
Some types of ID theft aren't preventable, however. Someone could get your personal information by hacking into a retailer's database, for instance.
So even if you're careful about protecting your information, monitor financial accounts regularly.
"Identity fraud is all about prevention and detection," Van Dyke said.
Friday, February 6, 2009
RDC and Risk Management
By Mark Brousseau
On January 14, 2009, the FFIEC (Federal Financial Institution Examination Council) published long-awaited guidance on “Risk Management of Remote Deposit Capture.”
This guidance defines Remote Deposit Capture (RDC) as a “deposit transaction delivery system” rather than simply as a new service. It talks about RDC in terms of information received by a financial institution from checks sent electonically from remotely located businesses and individuals, as well as the financial institution’s branches, automated teller machines (ATMs), and domestic and foreign correspondents. However, it focuses primarily on RDC deployed at a customer location.
RDC introduces some new risks and increases some existing risks in processing deposits, says Kathy Levin, AAP, managing director, Payments Information Circle (404-478-3491, kathy.levin@paymentsinformation.com). Some financial institutions have begun offering the service without fully understanding the risks involved in RDC, she notes.
“The guidance addresses expectations for identifying, assessing and mitigating risk and discusses roles and responsibilities in implementing and operating RDC in a financial institution,” Levin told me. “It makes it clear that, as with any new payment delivery system offered, there should be no implementation of these services without management oversight, compliance/internal audit involvement and board approval.”
Levin adds that the guidance addresses the necessary elements of an RDC risk management program and provides strategic, credit/underwriting, vendor management, legal and compliance, fraud management, and operational and implementation direction for financial institutions. It also emphasizes the importance of adequate risk management at the remote locations, she says.
“Many financial institutions implemented RDC quickly and experienced rapid adoption of the service,” Levin says. “Some may need to go back and revise their policies and procedures to ensure they are in line with the new guidance.”
In addition to the suggestions contained within the guidance itself, Levin says financial institutions will need to utilize information contained in the FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual, Interagency Guidance on Authentication in an Internet Banking Environment, Interagency Guidelines Establishing Information Security Standards, and sections of the FFIEC IT Examination Handbook, including the Information Security Booklet, the Management Booklet, the Outsourcing Technology Services Booklet, the Business Continuity Planning Booklet, and the Operations Booklet, to ensure compliance in specific areas.
For a copy of the new FFIEC guidance, visit http://www.ffiec.gov/pdf/pr011409_rdc_guidance.pdf.
On January 14, 2009, the FFIEC (Federal Financial Institution Examination Council) published long-awaited guidance on “Risk Management of Remote Deposit Capture.”
This guidance defines Remote Deposit Capture (RDC) as a “deposit transaction delivery system” rather than simply as a new service. It talks about RDC in terms of information received by a financial institution from checks sent electonically from remotely located businesses and individuals, as well as the financial institution’s branches, automated teller machines (ATMs), and domestic and foreign correspondents. However, it focuses primarily on RDC deployed at a customer location.
RDC introduces some new risks and increases some existing risks in processing deposits, says Kathy Levin, AAP, managing director, Payments Information Circle (404-478-3491, kathy.levin@paymentsinformation.com). Some financial institutions have begun offering the service without fully understanding the risks involved in RDC, she notes.
“The guidance addresses expectations for identifying, assessing and mitigating risk and discusses roles and responsibilities in implementing and operating RDC in a financial institution,” Levin told me. “It makes it clear that, as with any new payment delivery system offered, there should be no implementation of these services without management oversight, compliance/internal audit involvement and board approval.”
Levin adds that the guidance addresses the necessary elements of an RDC risk management program and provides strategic, credit/underwriting, vendor management, legal and compliance, fraud management, and operational and implementation direction for financial institutions. It also emphasizes the importance of adequate risk management at the remote locations, she says.
“Many financial institutions implemented RDC quickly and experienced rapid adoption of the service,” Levin says. “Some may need to go back and revise their policies and procedures to ensure they are in line with the new guidance.”
In addition to the suggestions contained within the guidance itself, Levin says financial institutions will need to utilize information contained in the FFIEC Bank Secrecy Act/Anti-Money Laundering (BSA/AML) Examination Manual, Interagency Guidance on Authentication in an Internet Banking Environment, Interagency Guidelines Establishing Information Security Standards, and sections of the FFIEC IT Examination Handbook, including the Information Security Booklet, the Management Booklet, the Outsourcing Technology Services Booklet, the Business Continuity Planning Booklet, and the Operations Booklet, to ensure compliance in specific areas.
For a copy of the new FFIEC guidance, visit http://www.ffiec.gov/pdf/pr011409_rdc_guidance.pdf.
Wednesday, February 4, 2009
Deposits Will Be Critical in 2009
By Mark Brousseau
There’s little question that we’ll see continued economic change and upheaval in 2009. But Michael Pratt, chief marketing officer, Panini North America, says remote deposit capture (RDC) solutions create an opportunity for financial institutions (FIs) to defend and even acquire the ever-important Demand Deposit Account (DDA) line of business.
With tightened credit markets and higher regulatory and market scrutiny, domestic deposits have become even more critical for FIs. McKinsey estimates that payments represented $235B in FI revenue in 2006, or 40-50 percent of an average bank’s revenue, Pratt notes. Revenue related to DDA is typically 45 percent of this base, or 18-22 percent of an average bank’s total revenue -- highlighting the significance of payments and deposits to a bank.
Economic conditions have increasingly made deposits the “benchmark” by which FI health is perceived in the market, Pratt says, and is the driver of their ability to continue to facilitate financial transactions. “We have already seen major acquisitions based primarily on access to domestic deposits, so the ability of FIs to capture deposits will be very instrumental to their success,” he explains.
“Deposit retention and acquisitions programs are central to the well being of DDA related income to all financial institutions, resulting in a renewed prioritization for remote deposit capture,” Pratt says. “Distributed capture, after all, is at its core a strategic means of acquiring deposits while lowering operational & processing costs.”
Banks that take maximum advantage of this opportunity to gain new deposits and solidify customer relationships via RDC stand to gain the high ground in the war for deposits, he concludes.
What do you think? Post your comments below.
There’s little question that we’ll see continued economic change and upheaval in 2009. But Michael Pratt, chief marketing officer, Panini North America, says remote deposit capture (RDC) solutions create an opportunity for financial institutions (FIs) to defend and even acquire the ever-important Demand Deposit Account (DDA) line of business.
With tightened credit markets and higher regulatory and market scrutiny, domestic deposits have become even more critical for FIs. McKinsey estimates that payments represented $235B in FI revenue in 2006, or 40-50 percent of an average bank’s revenue, Pratt notes. Revenue related to DDA is typically 45 percent of this base, or 18-22 percent of an average bank’s total revenue -- highlighting the significance of payments and deposits to a bank.
Economic conditions have increasingly made deposits the “benchmark” by which FI health is perceived in the market, Pratt says, and is the driver of their ability to continue to facilitate financial transactions. “We have already seen major acquisitions based primarily on access to domestic deposits, so the ability of FIs to capture deposits will be very instrumental to their success,” he explains.
“Deposit retention and acquisitions programs are central to the well being of DDA related income to all financial institutions, resulting in a renewed prioritization for remote deposit capture,” Pratt says. “Distributed capture, after all, is at its core a strategic means of acquiring deposits while lowering operational & processing costs.”
Banks that take maximum advantage of this opportunity to gain new deposits and solidify customer relationships via RDC stand to gain the high ground in the war for deposits, he concludes.
What do you think? Post your comments below.
Friday, August 29, 2008
Remote Deposit Capture Video
Posted by Mark Brousseau
Take a look at this neat one-minute video from National Bank of California about their remote deposit capture product.
http://www.youtube.com/watch?v=XCUP-O9wN4M
Take a look at this neat one-minute video from National Bank of California about their remote deposit capture product.
http://www.youtube.com/watch?v=XCUP-O9wN4M
Friday, August 1, 2008
Gaining Control Over Stranded Payments
Significant changes in the payments landscape and the intense growth of Remote Deposit Capture (RDC) over the last three years has triggered the necessary expansion of RDC from capturing check deposits only to providing the capability of capturing retail and wholesale remittance payments, as well.
That’s according to Sam Golbach, senior product manager for WAUSAU Financial Systems.
These changes have created new payment processing workflows and allow financial institutions and remittance processors (lockbox providers, corporate billers) to offer new, creative solutions to customers and in-house operations for capturing “stranded payments,” Golbach told me.
Stranded payments can be defined as payments received at remote locations via walk-in, over-the-counter, mail or other delivery methods. Goldbach said the steps to process, post and deposit are different than the central remittance processing site or sites. “Today, remittance solutions can be tailored based on customer needs or an organization’s internal processes to address the challenges that stranded payments pose,” he said.
To capture remote payments, remittance processors can combine remote and central payments into a single workflow with aggregated reporting, A/R file updates and archives, which creates a compelling business case when one considers the revenue-generating benefits realized through remote capture such as lower processing costs, improved workflow efficiency and funds availability and reduced bank accounts and sweeps, Goldbach explained.
He said early adopters are enjoying an innovative offering that is quickly gaining momentum and driving demand for other remittance processors to take notice and invest in remote capture technology. While vertical growth has been most evident in the healthcare segment, this is just the tip of the iceberg. Interest from brokerage, insurance and property management firms is quickly taking shape, Goldbach noted.
“For lockbox providers, this is a solution that continues to open doors to new markets, enhancing existing customer relationships, driving additional fee revenue, expanding market share and increasing deposits to succeed in today’s marketplace,” he concluded.
Is your lockbox offering corporate remittance capture?
Post your comment below.
That’s according to Sam Golbach, senior product manager for WAUSAU Financial Systems.
These changes have created new payment processing workflows and allow financial institutions and remittance processors (lockbox providers, corporate billers) to offer new, creative solutions to customers and in-house operations for capturing “stranded payments,” Golbach told me.
Stranded payments can be defined as payments received at remote locations via walk-in, over-the-counter, mail or other delivery methods. Goldbach said the steps to process, post and deposit are different than the central remittance processing site or sites. “Today, remittance solutions can be tailored based on customer needs or an organization’s internal processes to address the challenges that stranded payments pose,” he said.
To capture remote payments, remittance processors can combine remote and central payments into a single workflow with aggregated reporting, A/R file updates and archives, which creates a compelling business case when one considers the revenue-generating benefits realized through remote capture such as lower processing costs, improved workflow efficiency and funds availability and reduced bank accounts and sweeps, Goldbach explained.
He said early adopters are enjoying an innovative offering that is quickly gaining momentum and driving demand for other remittance processors to take notice and invest in remote capture technology. While vertical growth has been most evident in the healthcare segment, this is just the tip of the iceberg. Interest from brokerage, insurance and property management firms is quickly taking shape, Goldbach noted.
“For lockbox providers, this is a solution that continues to open doors to new markets, enhancing existing customer relationships, driving additional fee revenue, expanding market share and increasing deposits to succeed in today’s marketplace,” he concluded.
Is your lockbox offering corporate remittance capture?
Post your comment below.
Thursday, April 3, 2008
Could Free Scanners Drive RDC?
By Mark Brousseau
Could free scanners hold the key to even wider remote deposit capture adoption? That’s what two new studies suggest.
A survey by Boston-based Aite Group found that 58 percent of small businesses that are not using remote deposit capture say free scanners from their banks would make their adoption of the technology more likely – topping any other implementation factor. Aite Group analyst Christine Barry notes that small businesses are more price-sensitive in general.
No kidding. Small businesses – those with less than $500,000 in revenue annually – expect scanners to cost about $100 or less, according to research from Celent LLC. Even larger businesses – those with at least $5 million in revenues – expect scanners to cost $210. These are numbers that will surely make the check scanner manufacturers gag.
Celent notes that only 15 percent of banks now offer clients free scanners, with half requiring them to buy the machines upfront, either from the bank or from a technology vendor. One-third of banks absorb scanner costs into the monthly fees for their remote capture service.
What do you think? Post your comments below.
Could free scanners hold the key to even wider remote deposit capture adoption? That’s what two new studies suggest.
A survey by Boston-based Aite Group found that 58 percent of small businesses that are not using remote deposit capture say free scanners from their banks would make their adoption of the technology more likely – topping any other implementation factor. Aite Group analyst Christine Barry notes that small businesses are more price-sensitive in general.
No kidding. Small businesses – those with less than $500,000 in revenue annually – expect scanners to cost about $100 or less, according to research from Celent LLC. Even larger businesses – those with at least $5 million in revenues – expect scanners to cost $210. These are numbers that will surely make the check scanner manufacturers gag.
Celent notes that only 15 percent of banks now offer clients free scanners, with half requiring them to buy the machines upfront, either from the bank or from a technology vendor. One-third of banks absorb scanner costs into the monthly fees for their remote capture service.
What do you think? Post your comments below.
Thursday, October 11, 2007
Check 21 Speed Bumps
By Mark Brousseau
With the banking industry seemingly speeding towards electronic check clearing, it’s easy to forget that there are some speed bumps along the way. I asked Clint Shank (cshank@sortlogic.com), president of Omni-Soft, Inc., the parent company of SortLogic SYSTEMS, what he saw as the biggest obstacles that financial institutions are facing as they migrate to electronic clearing. His response: the fact that paper checks are still being issued, and that most legacy capture systems won’t get replaced anytime soon.
Shank noted that most businesses – and some individuals – would continue to issue paper checks for the foreseeable future, a fact that is backed up by myriad studies. And while printing substitute checks or image replacement documents (IRDs) to process in-clearings is not cost prohibitive, it’s also not cheap. Similarly, Shank believes that most legacy check capture systems still have substantial value on the books, and many financial institutions have a big investment in staff focused on using and maintaining these systems.
“The replacement cost for a system that handles both paper and electronic payments is steep, in terms of dollars, resources and time,” Shank noted. “The cost to upgrade a legacy system to process electronic payments may be more affordable, but nonetheless, is still pretty pricey. Moreover, with the consolidation in the solutions provider market, it is now possible for the unwary to put money in their competitor’s pocket by investing in an upgrade to an existing legacy system,” Shank added.
So Shank believes the real hurtle that financial institutions must overcome is how to protect their investment in their legacy capture system, while still moving toward check truncation. “This is a game played on a knife’s edge, where any miss-step can provide costly,” he said. “Perhaps this is why new services like remote deposit capture and Back Office Capture – which can be added without compromising this delicate balancing act – are so highly favored.”
How are your financial institution’s legacy systems impacting its electronic clearing initiatives? E-mail me at m_brousseau@msn.com.
With the banking industry seemingly speeding towards electronic check clearing, it’s easy to forget that there are some speed bumps along the way. I asked Clint Shank (cshank@sortlogic.com), president of Omni-Soft, Inc., the parent company of SortLogic SYSTEMS, what he saw as the biggest obstacles that financial institutions are facing as they migrate to electronic clearing. His response: the fact that paper checks are still being issued, and that most legacy capture systems won’t get replaced anytime soon.
Shank noted that most businesses – and some individuals – would continue to issue paper checks for the foreseeable future, a fact that is backed up by myriad studies. And while printing substitute checks or image replacement documents (IRDs) to process in-clearings is not cost prohibitive, it’s also not cheap. Similarly, Shank believes that most legacy check capture systems still have substantial value on the books, and many financial institutions have a big investment in staff focused on using and maintaining these systems.
“The replacement cost for a system that handles both paper and electronic payments is steep, in terms of dollars, resources and time,” Shank noted. “The cost to upgrade a legacy system to process electronic payments may be more affordable, but nonetheless, is still pretty pricey. Moreover, with the consolidation in the solutions provider market, it is now possible for the unwary to put money in their competitor’s pocket by investing in an upgrade to an existing legacy system,” Shank added.
So Shank believes the real hurtle that financial institutions must overcome is how to protect their investment in their legacy capture system, while still moving toward check truncation. “This is a game played on a knife’s edge, where any miss-step can provide costly,” he said. “Perhaps this is why new services like remote deposit capture and Back Office Capture – which can be added without compromising this delicate balancing act – are so highly favored.”
How are your financial institution’s legacy systems impacting its electronic clearing initiatives? E-mail me at m_brousseau@msn.com.
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