3 Key Trends In Remote Capture

By Mark Brousseau

Financial institutions have growth opportunities in implementing check imaging and remote deposit capture solutions as more customers request the services and, as the banks themselves, search out new opportunities for expansion. That’s according to Andy Lawrence, Worldwide Solutions Business Manager, Document Imaging, Graphic Communications Group, Eastman Kodak Company.

“Today’s challenging credit and mortgage environments are narrowing profit margins in both loan and deposit portfolios,” Lawrence told me. “Banks are looking to improve operational efficiency in dealing with the aforementioned and that is also fueling interest in check imaging and remote deposit capture.”

Lawrence said there are three significant trends occurring in the remote capture marketplace today.

First, small to medium-sized banks are increasingly signing up as clients to outsourced or hosted services for check imaging and remote deposit capture. There are many reasons for this, Lawrence noted; however, the prime reason has much to do with organizational philosophy. That necessitates answering a fundamental question: Does an organization have the scope within its resources to implement and maintain a remote deposit capture solution or does it want to concentrate resources on its core business, that of banking?

“Certainly, costs enter the picture in terms of affording dedicated IT resources and capital investments in hardware and software,” Lawrence noted. “So, too, business growth opportunities enter the decision process. We’re seeing small to medium sized banks use hosted services to expand their business without building and staffing new branches. Regardless if the system is in house or hosted, banks of all sizes have quickly realized that offering check imaging and remote deposit capture solutions to customers has enabled them to grow business cost effectively.”

Lawrence said Kodak also is beginning to see that small and medium size business are seeking to buy remote deposit capture solutions directly from vendors versus sourcing them exclusively through banks as was the case in the initial Check 21 push. While banks are anxious to reach beyond their own client base, the reality is that they are limited by the scale of their sales organization and ability to implement and service solutions, Lawrence explained. In fact, he claims bank adoption has been widespread but client adoption has been limited and is almost at a standstill.

“We realized that this would happen,” Lawrence said. “To prepare for it, Kodak has been expanding application knowledge and market presence for the last three years. In effect, Kodak is playing the role of matchmaker by driving awareness and leveraging our relationships with businesses to bring clients to banks with which we’ve partnered.”

The last trend Lawrence noted involves capture technology itself, and the disruption being caused in the market by businesses requesting to use document scanner platforms for remote deposit capture. “These businesses do not require MICR and want to optimize return on investment in document scanners through using one scanning platform for financial transactions and business documents,” Lawrence said. “Doing so can lead to equipment cost savings, reduced training requirements and streamlined process flow.”

Lawrence said that in the four years since Congress passed the Check Clearing Act for the 21st Century Act enabling check scanning and remote deposit capture, the industry has moved from early adopters of the technology marketing the service to a few major customers to growing acceptance by all sizes of banks and customers.

Trends in hosted services, businesses purchasing remote deposit capture solutions directly from vendors and the ability to scan checks via document scanners will only accelerate the interest and pace of adoption in the market for Check 21 solutions, he predicted.

What do you think? E-mail me at m_brousseau@msn.com.