Posted by Mark Brousseau
There’s a lot of buzz around the power of social media as a tool companies can use for demonstrating their thought leadership, and engaging – and potentially empowering – their target audiences.
To be sure, effectively using social media can help companies:
… Generate visibility, name recognition and credibility for their business
… Boost Google Search Engine results and increase Web traffic
… Strengthen business partnerships
… Generate qualified leads
But what’s the most effective ways to use social media?
Broadly speaking, there are 5 key steps for successfully using social media:
1. Develop a strategy
2. Establish a presence (Twitter, LinkedIn, Facebook, etc.)
3. Look for ways to expand the reach of your message
4. Look for ways to nurture existing and new relationships
5. Properly maintain your social media presence
For instance, Twitter, with its 140-character limit, can help drive prospects to your company (in fact, many companies think of Twitter as a search engine like Google). With Twitter, companies can promote contests, share timely information, distribute useful (read: educational) links, personify their brand, build credibility and influence, and even follow their competitors (it does work both ways!).
The key to successfully leveraging Twitter is for the user to sound more like someone who just happens to work at your company, rather than someone whose sole purpose is to push your company. You can accomplish this by personifying your company, answering and posting questions/issues, announcing sales, deals and corporate updates, and generally building buzz around your company.
What you don’t want to do is sound like a press release, or “spam” followers with links to your company website (don’t worry: with the right buzz, followers will seek out the site on their own!).
These are some ideas to get companies started.
So, which social media strategies are working – or not working – for your company?
Showing posts with label remote deposit capture. Show all posts
Showing posts with label remote deposit capture. Show all posts
Wednesday, August 4, 2010
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?
Friday, February 19, 2010
The Image Clearing Opportunity
Posted by Mark Brousseau
Image clearing networks provide an opportunity for bankers banks to grow their revenues and attract new customers. US Dataworks President and COO Mario Villarreal (mvillarreal@usdataworks.com) explains:
At a time when paper cash letter volumes are rapidly declining, and the banking industry approaches the "last mile" in its migration toward electronic clearing, forward-thinking banks are leveraging Check 21 and their existing IT infrastructure to offer new image clearing services to community banks. If there is one thing that bankers have learned from the credit crisis, it is that focusing on their core services can provide a huge payoff.
Bankers banks provide valuable services to community banks, allowing them to compete with their larger counterparts. Bankers banks that have invested in the best technology to clear image exchange items also can offer this as a value-priced service to other bankers banks, extending their ability to service additional community banks, reduce costs, and expand their clearing network for improved funds availability and returns processing.
The Business Case
Prior to Check 21, check clearing was an extremely labor and capital-intensive process. For this reason, most bankers banks provided only settlement services: most community banks deposited paper cash letters at their nearby Federal Reserve Bank, while community banks that weren't members of the Federal Reserve settled their items through a bankers bank.
With the adoption of image clearing reaching more financial institutions, and advances in technology eliminating the need for bankers banks to print substitute checks in order to clear all of their items, more bankers banks are discovering that they can offer check clearing services to their customers with a much smaller investment in staff and equipment than in the past.
The goal for these bankers banks is to provide a lower-cost clearing option for their community bank customers or members, while generating non-interest income through clearing fees. By establishing a regional clearinghouse for in-network financial institutions, bankers banks can help their customers achieve lower costs through direct exchanges, as well as additional discounts through the bankers banks' aggregated volume. In most cases, community banks see savings of up to 20 percent compared to Federal Reserve Bank fees. Similarly, working with a bankers bank provides lower fees to receive image files from other banks. And bankers banks can offer value-added services such as item-level duplicate detection, which reduces errors and helps identify potential fraud. Other services include long-term payment archiving, expedited research and adjustments, and payment trend analysis.
In turn, bankers banks can strengthen their customer relationships, attract new bank customers, and increase the percentage of items cleared through their network. Bankers banks that have implemented this service have increased the rate of membership in the geographic region they serve, which results in a bigger network and more value to all participants.
Bankers banks also gain operational improvements by implementing an image exchange system that is not based on the old way of paper-check processing, but designed from the ground up to process today’s growing variety of payment types. In one case, a bankers bank reduced the time necessary to complete its check image processing from eight hours to less than 45 minutes using the new standard in image exchange processing. And, unlike traditional check systems, advanced image clearing solutions allow for configuration changes -- such as adding or disabling a clearing endpoint -- without a significant lead time or custom code.
Key Buying Criteria
When evaluating clearing solutions, there are four key criteria bankers banks should consider:
1. Scalability -- Image clearing requires the processing of large volumes in an extremely short processing window, as well as the effective management of a large number of image files.
2. Exceptions handling -- To minimize costly errors, an image clearing solution must have capabilities for duplicate detection.
3. Enhanced clearing capabilities -- In order to reduce fees, a clearing solution should have capabilities for in-network and consolidated decisioning, as well as bi-directional clearing.
4. Expandability -- Because of the fast-changing nature of the financial services industry, bankers banks should look for solutions that are designed to support future services.
Other evaluation criteria include startup and ongoing costs, time-to-market, the vendor's track record in high-volume operations, any value-added functionality (such as data analytics), and the level of control the bankers bank will have over product pricing, processing deadlines and service levels.
The Bottom Line
With fee income on the line, and community banks desperate for cost-effective clearing alternatives, more bankers banks will establish internal image clearing networks to harness the cost savings of in-network clearing and direct sends to major financial institutions, Returned items and research and adjustments are also simplified with the network approach. With these networks, bankers banks can provide the highest quality of correspondent services to community banks, as well as help their colleague bankers bank serve their customers. To provide even greater benefit to their customers, some of these bankers banks will create expanded same-day exchanges and exchanges with national and regional banks, and bundle their image clearing services with cash management products such as remote deposit capture (RDC) and automated clearing house (ACH) processing.
All of this will strengthen the role of bankers banks in the emerging financial services environment.
What do you think?
Image clearing networks provide an opportunity for bankers banks to grow their revenues and attract new customers. US Dataworks President and COO Mario Villarreal (mvillarreal@usdataworks.com) explains:
At a time when paper cash letter volumes are rapidly declining, and the banking industry approaches the "last mile" in its migration toward electronic clearing, forward-thinking banks are leveraging Check 21 and their existing IT infrastructure to offer new image clearing services to community banks. If there is one thing that bankers have learned from the credit crisis, it is that focusing on their core services can provide a huge payoff.
Bankers banks provide valuable services to community banks, allowing them to compete with their larger counterparts. Bankers banks that have invested in the best technology to clear image exchange items also can offer this as a value-priced service to other bankers banks, extending their ability to service additional community banks, reduce costs, and expand their clearing network for improved funds availability and returns processing.
The Business Case
Prior to Check 21, check clearing was an extremely labor and capital-intensive process. For this reason, most bankers banks provided only settlement services: most community banks deposited paper cash letters at their nearby Federal Reserve Bank, while community banks that weren't members of the Federal Reserve settled their items through a bankers bank.
With the adoption of image clearing reaching more financial institutions, and advances in technology eliminating the need for bankers banks to print substitute checks in order to clear all of their items, more bankers banks are discovering that they can offer check clearing services to their customers with a much smaller investment in staff and equipment than in the past.
The goal for these bankers banks is to provide a lower-cost clearing option for their community bank customers or members, while generating non-interest income through clearing fees. By establishing a regional clearinghouse for in-network financial institutions, bankers banks can help their customers achieve lower costs through direct exchanges, as well as additional discounts through the bankers banks' aggregated volume. In most cases, community banks see savings of up to 20 percent compared to Federal Reserve Bank fees. Similarly, working with a bankers bank provides lower fees to receive image files from other banks. And bankers banks can offer value-added services such as item-level duplicate detection, which reduces errors and helps identify potential fraud. Other services include long-term payment archiving, expedited research and adjustments, and payment trend analysis.
In turn, bankers banks can strengthen their customer relationships, attract new bank customers, and increase the percentage of items cleared through their network. Bankers banks that have implemented this service have increased the rate of membership in the geographic region they serve, which results in a bigger network and more value to all participants.
Bankers banks also gain operational improvements by implementing an image exchange system that is not based on the old way of paper-check processing, but designed from the ground up to process today’s growing variety of payment types. In one case, a bankers bank reduced the time necessary to complete its check image processing from eight hours to less than 45 minutes using the new standard in image exchange processing. And, unlike traditional check systems, advanced image clearing solutions allow for configuration changes -- such as adding or disabling a clearing endpoint -- without a significant lead time or custom code.
Key Buying Criteria
When evaluating clearing solutions, there are four key criteria bankers banks should consider:
1. Scalability -- Image clearing requires the processing of large volumes in an extremely short processing window, as well as the effective management of a large number of image files.
2. Exceptions handling -- To minimize costly errors, an image clearing solution must have capabilities for duplicate detection.
3. Enhanced clearing capabilities -- In order to reduce fees, a clearing solution should have capabilities for in-network and consolidated decisioning, as well as bi-directional clearing.
4. Expandability -- Because of the fast-changing nature of the financial services industry, bankers banks should look for solutions that are designed to support future services.
Other evaluation criteria include startup and ongoing costs, time-to-market, the vendor's track record in high-volume operations, any value-added functionality (such as data analytics), and the level of control the bankers bank will have over product pricing, processing deadlines and service levels.
The Bottom Line
With fee income on the line, and community banks desperate for cost-effective clearing alternatives, more bankers banks will establish internal image clearing networks to harness the cost savings of in-network clearing and direct sends to major financial institutions, Returned items and research and adjustments are also simplified with the network approach. With these networks, bankers banks can provide the highest quality of correspondent services to community banks, as well as help their colleague bankers bank serve their customers. To provide even greater benefit to their customers, some of these bankers banks will create expanded same-day exchanges and exchanges with national and regional banks, and bundle their image clearing services with cash management products such as remote deposit capture (RDC) and automated clearing house (ACH) processing.
All of this will strengthen the role of bankers banks in the emerging financial services environment.
What do you think?
Tuesday, September 8, 2009
The Surge in Interest for Remote Cash Capture
Posted by Mark Brousseau
Remote Cash Capture (RCC), the deployment of secure smart safes at merchant locations coupled with information reporting and provisional credit mechanisms, has been utilized in the United States for nearly 15 years as a means of improving merchant cash cycle control. Since 2004, when banks began offering provisional credit based on validated currency residing at the merchant location, the industry has witnessed a surge in interest and adoption of these devices.
The research paper “Remote Cash Capture—An Idea Whose Time Has Come,” authored and published by the international research and consulting firm Celent, thoroughly addresses this surge in RCC popularity with extensive research into remote cash capture demand, adoption, management, merchant cash logistics and potential benefits for both institutions and merchants.
According to the paper, the primary benefit of RCC provisional credit is that it facilitates wholesale reengineering of the cash cycle within merchants and between merchants, armored couriers and bank cash vault networks. RCC removes the substantial burden of cash handling typically carried by bank branch personnel historically, largely without the assistance of meaningful automation. In short, the paper states that RCC is a win-win-win wherever the merchant business case warrants.
RCC adoption however, has been slowed by both economic and systemic barriers. Armored courier systems are proprietary, meaning safes and information systems from different couriers do not communicate. This complicates adoption from interested financial institutions, which must invest in systems integration file validation and testing efforts just to participate. In addition, RCC is expensive, as both hardware and processing fees can make the solution unaffordable for a large number of otherwise interested merchants.
Celent predicts that economies of scale could eventually make the technology more affordable. For the foreseeable future, however, RCC will continue to appeal to a minority of merchants and be supported by a minority of midsized to large U.S. banks. As self-service applications continue to proliferate, banks will seek to participate with same-day provisional credit as is now being done with cash acceptor safes. Taking the form of self-service retail checkout and bill payment kiosks, these devices will further extend the reach of closed-loop cash cycle automation systems.
Hoping to take advntage of remote cash capture trends, Fiserv provides an integrated set of software solutions and industry-leading expertise to address the cash management challenges facing financial institutions, retailers and key service providers for these organizations.
CorPoint from Fiserv delivers cash order and deposit management with comprehensive tracking and service level management, all with a focus on expedited credit to retail customer accounts. Corpoint is designed to allow the bank to allow its corporate/retail customers to order and track cash orders and deposits via a bank-branded web portal or IVRU. This brings back the relationship that is sometimes disintermediated by the customer’s armored courier.
As a part of the Cash and Logistics suite from Fiserv, CorPoint:
... Supports any organization that accepts cash deposits from its customer base
... Supports any cash deposit mechanism including manual deposits or self-service cash devices such as Retail Recyclers
... Tracks retail customer deposits from source to destination
... Facilitates expedited customer deposit credit and deposit adjustments with single deposit process and data flow
... Eliminates geographic obstacles as banks pursue new deposit business outside of the current footprint
iCom from Fiserv offers cash supply chain management addressing cash requirements across the organization. iCom helps organizations achieve minimized cash holdings and reduced transportation expenses, with maximized availability of cash for customers.
As the cornerstone solution in the Cash and Logistics suite, iCom:
... Supports any organization with a cash supply chain, including financial institutions, retail organizations, ISOs and armored car couriers
... Supports any cash-point type: ATMs, branches, stores, vaults, third-party cash storage facilities and self-service cash devices
... Combines complex forecasting functionality with historical trends and known events to optimize cash holdings for the unique demands of each cash point
... Delivers accuracy in forecasting that allows organizations to optimize cash levels to avoid cash outages and eliminates excess cash holdings
... Enables management from one to thousands of cash-points supporting future additions obtained through mergers, acquisitions or organic growth
How is your organization handling remote cash capture? Post your comment below.
Remote Cash Capture (RCC), the deployment of secure smart safes at merchant locations coupled with information reporting and provisional credit mechanisms, has been utilized in the United States for nearly 15 years as a means of improving merchant cash cycle control. Since 2004, when banks began offering provisional credit based on validated currency residing at the merchant location, the industry has witnessed a surge in interest and adoption of these devices.
The research paper “Remote Cash Capture—An Idea Whose Time Has Come,” authored and published by the international research and consulting firm Celent, thoroughly addresses this surge in RCC popularity with extensive research into remote cash capture demand, adoption, management, merchant cash logistics and potential benefits for both institutions and merchants.
According to the paper, the primary benefit of RCC provisional credit is that it facilitates wholesale reengineering of the cash cycle within merchants and between merchants, armored couriers and bank cash vault networks. RCC removes the substantial burden of cash handling typically carried by bank branch personnel historically, largely without the assistance of meaningful automation. In short, the paper states that RCC is a win-win-win wherever the merchant business case warrants.
RCC adoption however, has been slowed by both economic and systemic barriers. Armored courier systems are proprietary, meaning safes and information systems from different couriers do not communicate. This complicates adoption from interested financial institutions, which must invest in systems integration file validation and testing efforts just to participate. In addition, RCC is expensive, as both hardware and processing fees can make the solution unaffordable for a large number of otherwise interested merchants.
Celent predicts that economies of scale could eventually make the technology more affordable. For the foreseeable future, however, RCC will continue to appeal to a minority of merchants and be supported by a minority of midsized to large U.S. banks. As self-service applications continue to proliferate, banks will seek to participate with same-day provisional credit as is now being done with cash acceptor safes. Taking the form of self-service retail checkout and bill payment kiosks, these devices will further extend the reach of closed-loop cash cycle automation systems.
Hoping to take advntage of remote cash capture trends, Fiserv provides an integrated set of software solutions and industry-leading expertise to address the cash management challenges facing financial institutions, retailers and key service providers for these organizations.
CorPoint from Fiserv delivers cash order and deposit management with comprehensive tracking and service level management, all with a focus on expedited credit to retail customer accounts. Corpoint is designed to allow the bank to allow its corporate/retail customers to order and track cash orders and deposits via a bank-branded web portal or IVRU. This brings back the relationship that is sometimes disintermediated by the customer’s armored courier.
As a part of the Cash and Logistics suite from Fiserv, CorPoint:
... Supports any organization that accepts cash deposits from its customer base
... Supports any cash deposit mechanism including manual deposits or self-service cash devices such as Retail Recyclers
... Tracks retail customer deposits from source to destination
... Facilitates expedited customer deposit credit and deposit adjustments with single deposit process and data flow
... Eliminates geographic obstacles as banks pursue new deposit business outside of the current footprint
iCom from Fiserv offers cash supply chain management addressing cash requirements across the organization. iCom helps organizations achieve minimized cash holdings and reduced transportation expenses, with maximized availability of cash for customers.
As the cornerstone solution in the Cash and Logistics suite, iCom:
... Supports any organization with a cash supply chain, including financial institutions, retail organizations, ISOs and armored car couriers
... Supports any cash-point type: ATMs, branches, stores, vaults, third-party cash storage facilities and self-service cash devices
... Combines complex forecasting functionality with historical trends and known events to optimize cash holdings for the unique demands of each cash point
... Delivers accuracy in forecasting that allows organizations to optimize cash levels to avoid cash outages and eliminates excess cash holdings
... Enables management from one to thousands of cash-points supporting future additions obtained through mergers, acquisitions or organic growth
How is your organization handling remote cash capture? Post your comment below.
Wednesday, August 19, 2009
ET Phone Home
Posted by Mark Brousseau
Vijay Balakrishnan, president of StratEx LLC (770-598-5747, www.stratexllc.blogspot.com) passes along an article he wrote on the recent announcement by USAA that it will allow its customers to make deposits by iPhone:
Mobile phone cameras have captured images of everything from election protests in Iran to the recent tragic collision of a helicopter and a small plane over the Hudson River. So, what could one possibly add to the list of things that would intrigue mobile shutterbugs? With apologies to Mr.McGuire in the movie The Graduate, "I have just one word for you. Just one word.....checks."
The recent announcement from USAA, allowing its customers to make deposits by sending images of checks taken with their Apple iPhones, brings together technologies from the 19th and 21st centuries. Until the advent of Check 21, the movement of deposited funds depended on the physical transport of paper. An extensive retail branch network was developed to act as collection points for deposited paper. USAA, which serves 7.2 million active and retired members of the U.S. military and their families from one branch in San Antonio, has consistently used technology to turn conventional wisdom on its head. Three years ago, it announced its Deposit @Home service that allows customers to make deposits by sending images of checks scanned at home. Despite early scepticism from many, USAA claims 150,000 users. The addition of mobile smart phones takes the remote capture notion even further.
In addition to this announcement, mobile deposit technology provider Mitek Corporation has announced relationships with Fiserv, RDM, NCR, and J&B Software to take the capability to their customers. As these formidable players get past their pilots and launch offerings, we will likely see more financial institutions make mobile deposit services available.
What about fraud, you say? Doesn't Check 21 require account and transit information to be read magnetically to ensure security? While I admit that the prospect of sensitive check images flying through the air can be unnerving, and there are issues of authentication, privacy and data integrity that need to considered (another post, another day), the fact is that there is no regulation that requires that the magnetic ink character recognition (MICR) information be read magnetically. In fact, Check 21 is silent on the subject. Thus absent regulation, it falls to the individual financial institution's tolerance for risk, versus the obvious convenience of the service.
There are two factors that can mitigate risk to some extent: the old dictum of knowing your customer (KYC), and the option to delay funds availability until the check has cleared. I believe we will see the adoption of mobile deposit capture in defined communities such as the USAA customer franchise, where the financial institution has a very good idea of risk exposure. Credit unions with well defined memberships are more likely to offer this service than banks (and like USAA, most credit unions are also not extensively branched allowing them to make virtue out of necessity). We will likely see the service offered to the "safest" customers first, based on their deposit history, followed by a gradual expansion using funds availability agreements as a tool to calibrate exposure.
The banking community at large has a different challenge. Deposit acceptance is arguably the raison d'etre for large retail branch networks. Remote capture in general, and mobile deposit in particular, poses an interesting channel conflict paradox (see BAI Insights for a summary of a presentation I did with Bob Meara from Celent on the RDC/Branch paradox). Thus, my take is that banks (particularly the larger ones) will perceive mobile deposit as a bridge over troubled waters and be reluctant to put their branch network at risk.
While I don't see the airways saturated with check images from mass deployment, I believe mobile deposit will do well through niche (not necessarily small) adoption. Technology providers, transaction processors, and financial institutions all have different but related niche marketing challenges ahead. Astute target market selection will likely govern success. The alignment of factors like service and product features, pricing (ex: who pays for the data plan for zapping all those images, and what's the payback?), as well as path-to-market partnerships, are imperatives to be carefully considered.
What do you think? Post your comment below.
Vijay Balakrishnan, president of StratEx LLC (770-598-5747, www.stratexllc.blogspot.com) passes along an article he wrote on the recent announcement by USAA that it will allow its customers to make deposits by iPhone:
Mobile phone cameras have captured images of everything from election protests in Iran to the recent tragic collision of a helicopter and a small plane over the Hudson River. So, what could one possibly add to the list of things that would intrigue mobile shutterbugs? With apologies to Mr.McGuire in the movie The Graduate, "I have just one word for you. Just one word.....checks."
The recent announcement from USAA, allowing its customers to make deposits by sending images of checks taken with their Apple iPhones, brings together technologies from the 19th and 21st centuries. Until the advent of Check 21, the movement of deposited funds depended on the physical transport of paper. An extensive retail branch network was developed to act as collection points for deposited paper. USAA, which serves 7.2 million active and retired members of the U.S. military and their families from one branch in San Antonio, has consistently used technology to turn conventional wisdom on its head. Three years ago, it announced its Deposit @Home service that allows customers to make deposits by sending images of checks scanned at home. Despite early scepticism from many, USAA claims 150,000 users. The addition of mobile smart phones takes the remote capture notion even further.
In addition to this announcement, mobile deposit technology provider Mitek Corporation has announced relationships with Fiserv, RDM, NCR, and J&B Software to take the capability to their customers. As these formidable players get past their pilots and launch offerings, we will likely see more financial institutions make mobile deposit services available.
What about fraud, you say? Doesn't Check 21 require account and transit information to be read magnetically to ensure security? While I admit that the prospect of sensitive check images flying through the air can be unnerving, and there are issues of authentication, privacy and data integrity that need to considered (another post, another day), the fact is that there is no regulation that requires that the magnetic ink character recognition (MICR) information be read magnetically. In fact, Check 21 is silent on the subject. Thus absent regulation, it falls to the individual financial institution's tolerance for risk, versus the obvious convenience of the service.
There are two factors that can mitigate risk to some extent: the old dictum of knowing your customer (KYC), and the option to delay funds availability until the check has cleared. I believe we will see the adoption of mobile deposit capture in defined communities such as the USAA customer franchise, where the financial institution has a very good idea of risk exposure. Credit unions with well defined memberships are more likely to offer this service than banks (and like USAA, most credit unions are also not extensively branched allowing them to make virtue out of necessity). We will likely see the service offered to the "safest" customers first, based on their deposit history, followed by a gradual expansion using funds availability agreements as a tool to calibrate exposure.
The banking community at large has a different challenge. Deposit acceptance is arguably the raison d'etre for large retail branch networks. Remote capture in general, and mobile deposit in particular, poses an interesting channel conflict paradox (see BAI Insights for a summary of a presentation I did with Bob Meara from Celent on the RDC/Branch paradox). Thus, my take is that banks (particularly the larger ones) will perceive mobile deposit as a bridge over troubled waters and be reluctant to put their branch network at risk.
While I don't see the airways saturated with check images from mass deployment, I believe mobile deposit will do well through niche (not necessarily small) adoption. Technology providers, transaction processors, and financial institutions all have different but related niche marketing challenges ahead. Astute target market selection will likely govern success. The alignment of factors like service and product features, pricing (ex: who pays for the data plan for zapping all those images, and what's the payback?), as well as path-to-market partnerships, are imperatives to be carefully considered.
What do you think? Post your comment below.
Tuesday, June 2, 2009
Remote Deposit Capture Still Has Legs
By Mark Brousseau
With the stratospheric growth of remote deposit capture (RemoteDepositCapture.com says it has reached over 50 percent penetration among financial institutions in less than half the time it took online banking), you might assume that interest in the technology is dying down. You’d be wrong.
At last week’s Windy City Summit in Chicago, a session on remote deposit capture drew a standing room-only crowd (some attendees even sat on the floor), and many corporate practitioners admitted that they still haven’t implemented technology, reports Leilani Doyle, product manager at US Dataworks, Inc. (ldoyle@usdataworks.com).
“While remote deposit capture is no longer new, and the market is saturated with product offerings, the technology is still growing steadily among corporations,” Doyle explains. “Corporate practitioners recognize that truncating paper as soon as possible in the process is always better.”
Doyle believes that there is more growth ahead for remote deposit capture, particularly with ISOs now selling the solution to billers who previously were an untapped audience, and with the introduction of new check scanners especially designed for billers for low transaction volumes (think: small businesses). US Dataworks plans to make product announcements in this area.
Remote deposit capture holdouts (and early adopters of the technology) also are looking for remote deposit capture solutions that allow for the centralized processing and repair of checks captured at the point of presentment. Anticipating this trend, US Dataworks designed its remote deposit capture offering to allow billers to capture items anywhere, correct them anywhere, and clear them anywhere.
Doyle said there also was a lot of talk among treasurers at the Windy City Summit about the need to reduce any excess balances in their demand deposit accounts (DDA). “Using balances to pay for services is too expensive,” Doyle explains, adding that many treasury managers were looking for a place to park their excess funds. “Not only are corporations receiving an ECR of 1 percent or less, but they also are incurring FDIC fees based on the risk category of their financial institution.”
“The macro-economic pressures of banks not willing to lend, and the Federal Reserve fund rates being at an all-time low, have put a unique spin on the treasury management professional’s job,” Doyle says. “Treasurers are spooked by high FDIC rates, the unknown risk of FDIC rate hikes to cover losses, and the fact that they can no longer use DDA balances to pay for non-credit services.”
The challenge for most treasurers is that they can’t move their banking relationship if they have a credit facility with their bank – regardless of the fees the bank changing for its cash management services: “Companies need to have access to that line or another longer term credit facility.”
In addition, some banks are changing their availability schedules, Doyle says. This is another area where Doyle thinks US Dataworks’ technology can help. With a centralized payments hub, like the one offered by US Dataworks, corporations are better prepared to choose the bank with the best availability schedule, or to dynamically change the way payments are collected based on the paying bank. “Better management of the collections side of the treasury function will provide more accurate collected balance forecasting and reduces the amount of collected balances subject to the FDIC assessment,” Doyle says. “Corporations can augment this strategy with a sweep to pay off loans if they are a net borrower, or a sweep to an investment product, if they are a net depositor.”
What do you think? Post your comments below.
With the stratospheric growth of remote deposit capture (RemoteDepositCapture.com says it has reached over 50 percent penetration among financial institutions in less than half the time it took online banking), you might assume that interest in the technology is dying down. You’d be wrong.
At last week’s Windy City Summit in Chicago, a session on remote deposit capture drew a standing room-only crowd (some attendees even sat on the floor), and many corporate practitioners admitted that they still haven’t implemented technology, reports Leilani Doyle, product manager at US Dataworks, Inc. (ldoyle@usdataworks.com).
“While remote deposit capture is no longer new, and the market is saturated with product offerings, the technology is still growing steadily among corporations,” Doyle explains. “Corporate practitioners recognize that truncating paper as soon as possible in the process is always better.”
Doyle believes that there is more growth ahead for remote deposit capture, particularly with ISOs now selling the solution to billers who previously were an untapped audience, and with the introduction of new check scanners especially designed for billers for low transaction volumes (think: small businesses). US Dataworks plans to make product announcements in this area.
Remote deposit capture holdouts (and early adopters of the technology) also are looking for remote deposit capture solutions that allow for the centralized processing and repair of checks captured at the point of presentment. Anticipating this trend, US Dataworks designed its remote deposit capture offering to allow billers to capture items anywhere, correct them anywhere, and clear them anywhere.
Doyle said there also was a lot of talk among treasurers at the Windy City Summit about the need to reduce any excess balances in their demand deposit accounts (DDA). “Using balances to pay for services is too expensive,” Doyle explains, adding that many treasury managers were looking for a place to park their excess funds. “Not only are corporations receiving an ECR of 1 percent or less, but they also are incurring FDIC fees based on the risk category of their financial institution.”
“The macro-economic pressures of banks not willing to lend, and the Federal Reserve fund rates being at an all-time low, have put a unique spin on the treasury management professional’s job,” Doyle says. “Treasurers are spooked by high FDIC rates, the unknown risk of FDIC rate hikes to cover losses, and the fact that they can no longer use DDA balances to pay for non-credit services.”
The challenge for most treasurers is that they can’t move their banking relationship if they have a credit facility with their bank – regardless of the fees the bank changing for its cash management services: “Companies need to have access to that line or another longer term credit facility.”
In addition, some banks are changing their availability schedules, Doyle says. This is another area where Doyle thinks US Dataworks’ technology can help. With a centralized payments hub, like the one offered by US Dataworks, corporations are better prepared to choose the bank with the best availability schedule, or to dynamically change the way payments are collected based on the paying bank. “Better management of the collections side of the treasury function will provide more accurate collected balance forecasting and reduces the amount of collected balances subject to the FDIC assessment,” Doyle says. “Corporations can augment this strategy with a sweep to pay off loans if they are a net borrower, or a sweep to an investment product, if they are a net depositor.”
What do you think? Post your comments below.
Wednesday, May 27, 2009
Rethinking Consumer Remote Deposit Capture
Posted by Mark Brousseau
An interesting article by Diebold from the Self Service and Kiosk Association Web site:
Is consumer remote deposit capture right for every financial institution?
by Robert MacMahon
26 May 2009
Since the inception of Check 21 in October 2004, adoption of remote deposit capture has been steady among financial institutions that cater to business customers.
According to Celent, 75 percent of all U.S. FIs are expected to be remote capture-enabled by the end of 2008. With the rapid and widespread embrace of commercial RDC, many financial institutions are interested in exploring the new frontier of this capability: consumer remote deposit capture.
Technologies are now available that enable FIs to securely process checks sent via ordinary scanners, thus opening the doors to RDC for consumers and small business owners. On this front, Celent says that 7 percent of FIs report already having either a complete solution or a pilot program up and running; meanwhile, 15 percent report plans for a consumer RDC solution and 22 percent say they would consider such a solution.
For many FIs contemplating this offering, questions still abound. To determine whether a consumer RDC program is right for your institution, and to ensure a smooth execution, a few key steps should be followed.
Identify your customer base
To assess the potential for success with a consumer RDC program, it is important to first evaluate your existing customer base, as well as potential new customers. For customers acclimated to off-hour banking solutions such as online banking, or for those who live far from a branch, consumer RDC could be a welcome offering. Evaluating your customers can also help you analyze overall risk and define the ideal customer to target in your marketing efforts.
Qualify your customer base
Diligent "know your customer" policies are extremely important in consumer RDC programs. While advanced safeguards are incorporated in the software developed for these programs, mitigating risk lies largely in the hands of the FI. Take inventory of the risk management controls that are currently in place at your institution, and consider a risk strategy designed specifically for a consumer RDC program. First and foremost, you'll need to set criteria to determine a customer's eligibility for this offering. For example, prerequisites for access to a consumer RDC application could include good credit and a long and positive history with your institution.
Take inventory of your security and monitoring capabilities
As previously mentioned, consumer RDC software solutions should include security features that allow your FI to control the flow of remote deposits in real time and customize the security criteria. This ensures that any deposits submitted for processing that do not meet the set standards are flagged and held until cleared by an authorized employee.
The crucial element then becomes identifying designated and qualified staff to monitor and control the software. Smooth deployment depends on your employees' understanding of and adherence to all protocol related to your RDC program.
Deploy your consumer RDC program
The final element of a successful consumer RDC program is smooth integration of the application into your FI's existing system. The key to a seamless inclusion of a consumer RDC program is that the software is easily installed and integrated into other back-end processes. Furthermore, the application should be easy and straightforward for the end user to encourage adoption among your target customers.
As the most rapidly adopted technology in the history of the financial services industry, the potential is there for remote deposit capture to become a successful consumer application. As with any new technology, before considering a consumer RDC program for your institution, several factors must be taken into consideration. With a firm understanding of your institution's customer base, risk controls, employees and, last but certainly not least, the technologies and processes through which you plan to execute the program, a successful consumer RDC program launch is within reach.
Robert MacMahon is senior business development manager of payments and imaging solutions for Diebold ImageWay, the deposit automation and imaging division of Diebold Inc.
An interesting article by Diebold from the Self Service and Kiosk Association Web site:
Is consumer remote deposit capture right for every financial institution?
by Robert MacMahon
26 May 2009
Since the inception of Check 21 in October 2004, adoption of remote deposit capture has been steady among financial institutions that cater to business customers.
According to Celent, 75 percent of all U.S. FIs are expected to be remote capture-enabled by the end of 2008. With the rapid and widespread embrace of commercial RDC, many financial institutions are interested in exploring the new frontier of this capability: consumer remote deposit capture.
Technologies are now available that enable FIs to securely process checks sent via ordinary scanners, thus opening the doors to RDC for consumers and small business owners. On this front, Celent says that 7 percent of FIs report already having either a complete solution or a pilot program up and running; meanwhile, 15 percent report plans for a consumer RDC solution and 22 percent say they would consider such a solution.
For many FIs contemplating this offering, questions still abound. To determine whether a consumer RDC program is right for your institution, and to ensure a smooth execution, a few key steps should be followed.
Identify your customer base
To assess the potential for success with a consumer RDC program, it is important to first evaluate your existing customer base, as well as potential new customers. For customers acclimated to off-hour banking solutions such as online banking, or for those who live far from a branch, consumer RDC could be a welcome offering. Evaluating your customers can also help you analyze overall risk and define the ideal customer to target in your marketing efforts.
Qualify your customer base
Diligent "know your customer" policies are extremely important in consumer RDC programs. While advanced safeguards are incorporated in the software developed for these programs, mitigating risk lies largely in the hands of the FI. Take inventory of the risk management controls that are currently in place at your institution, and consider a risk strategy designed specifically for a consumer RDC program. First and foremost, you'll need to set criteria to determine a customer's eligibility for this offering. For example, prerequisites for access to a consumer RDC application could include good credit and a long and positive history with your institution.
Take inventory of your security and monitoring capabilities
As previously mentioned, consumer RDC software solutions should include security features that allow your FI to control the flow of remote deposits in real time and customize the security criteria. This ensures that any deposits submitted for processing that do not meet the set standards are flagged and held until cleared by an authorized employee.
The crucial element then becomes identifying designated and qualified staff to monitor and control the software. Smooth deployment depends on your employees' understanding of and adherence to all protocol related to your RDC program.
Deploy your consumer RDC program
The final element of a successful consumer RDC program is smooth integration of the application into your FI's existing system. The key to a seamless inclusion of a consumer RDC program is that the software is easily installed and integrated into other back-end processes. Furthermore, the application should be easy and straightforward for the end user to encourage adoption among your target customers.
As the most rapidly adopted technology in the history of the financial services industry, the potential is there for remote deposit capture to become a successful consumer application. As with any new technology, before considering a consumer RDC program for your institution, several factors must be taken into consideration. With a firm understanding of your institution's customer base, risk controls, employees and, last but certainly not least, the technologies and processes through which you plan to execute the program, a successful consumer RDC program launch is within reach.
Robert MacMahon is senior business development manager of payments and imaging solutions for Diebold ImageWay, the deposit automation and imaging division of Diebold Inc.
Wednesday, February 11, 2009
Chicago Fed Cutting Ops Jobs
Posted by Mark Brousseau
This article from the Chicago Tribune is a sign of things to come:
Chicago Fed to cut jobs at check-processing center; first 26 set for next month
By James P. Miller
Tribune reporter
February 9, 2009
A total of 26 employees of the Federal Reserve Bank of Chicago will lose their jobs next month, as the nation's central bank continues to respond to the dramatic falloff in the use of paper checks by cutting back its once extensive network of check-processing faciliities.
In the latest State of Illinois 'WARN" list of employers who have notified workers of impending large-scale layoffs, all of the 97 jobs at the Federal Reserve's Chicago check-processing center in southwest suburban Bedford Park are listed for elimination beginning in March.
But a spokesman for the Chicago Fed said only 26 jobs will be cut next month; the remaining 71 will remain active until at least the fourth quarter.
As recently as 2003, the Federal Reserve banking system had 45 full-service check-processing centers around the country. But credit cards continue to displace the use of paper checks, and at the same time regulatory changes have made it easier to present checks for payment as an electronic image rather than in physical form.
So, the U.S. Fed had halved processing centers by mid-2007, and late last year the central bank announced a plan to operate just one full-service paper-check processing center, in Cleveland, and one electronic-check processing center in Atlanta.
The other processing centers, including the Chicago-area site, will wind down under what the Fed has referred to as "a flexible restructuring schedule," which will lead to their closure "when paper check volumes no longer justify the existing operation."
The Chicago Fed's spokesman said it's not clear when the Chicago center will cease operations. In fact, he said, it is possible that the Chicago center will remain operative, with just a "handful" of employees printing substitute checks from images for the modest number of banks that require a physical check.
The Fed has said it will seek to reassign at least a portion of the workers, if other jobs are available.
The number of paper checks totaled 42 billion in 2001, but by 2006 (the last year for which Fed numbers are available) that number had dropped 29 percent to 30 billion.
This article from the Chicago Tribune is a sign of things to come:
Chicago Fed to cut jobs at check-processing center; first 26 set for next month
By James P. Miller
Tribune reporter
February 9, 2009
A total of 26 employees of the Federal Reserve Bank of Chicago will lose their jobs next month, as the nation's central bank continues to respond to the dramatic falloff in the use of paper checks by cutting back its once extensive network of check-processing faciliities.
In the latest State of Illinois 'WARN" list of employers who have notified workers of impending large-scale layoffs, all of the 97 jobs at the Federal Reserve's Chicago check-processing center in southwest suburban Bedford Park are listed for elimination beginning in March.
But a spokesman for the Chicago Fed said only 26 jobs will be cut next month; the remaining 71 will remain active until at least the fourth quarter.
As recently as 2003, the Federal Reserve banking system had 45 full-service check-processing centers around the country. But credit cards continue to displace the use of paper checks, and at the same time regulatory changes have made it easier to present checks for payment as an electronic image rather than in physical form.
So, the U.S. Fed had halved processing centers by mid-2007, and late last year the central bank announced a plan to operate just one full-service paper-check processing center, in Cleveland, and one electronic-check processing center in Atlanta.
The other processing centers, including the Chicago-area site, will wind down under what the Fed has referred to as "a flexible restructuring schedule," which will lead to their closure "when paper check volumes no longer justify the existing operation."
The Chicago Fed's spokesman said it's not clear when the Chicago center will cease operations. In fact, he said, it is possible that the Chicago center will remain operative, with just a "handful" of employees printing substitute checks from images for the modest number of banks that require a physical check.
The Fed has said it will seek to reassign at least a portion of the workers, if other jobs are available.
The number of paper checks totaled 42 billion in 2001, but by 2006 (the last year for which Fed numbers are available) that number had dropped 29 percent to 30 billion.
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.
Sunday, December 21, 2008
2009: A Year of Risk and Reward
By Mark Brousseau
There can be no question that 2008 has been a horrific year for business. Yet as bad as this year has been, 2009 is shaping up to be a year of both risk and reward for many forward thinking companies.
That’s according to Rob Haberman (rhaberman@pure-pay.com), senior product manager for Purepay Receivables Automation. Haberman notes that governments worldwide are pouring money into their economies, to kick-start recovery. Savvy companies will be shoring up their balance sheets and preparing for the inevitable upturn, he says.
Haberman shared a few thoughts on some of the process opportunities we will see in 2009.
Manage Your Costs and Your Customers’ Costs
Leveraging technology to reduce costs will be a major issue in 2009, Haberman says. Stripping waste out of your balance sheet and your customer’s balance sheet will be a key element for survival. One example is the use of remote deposit and capture.
With this, customers use small low-cost scanners to balance and transmit invoice coupons and cheques to your in-house remittance system, Haberman notes. Your customers reduce the need to manage and transport paper checks. On the other hand, you have the ability to scale your operations to meet demand variances, without major expense or disruptions. There is also the possibility for per-transaction revenue. Equally important, since transport and processing time is reduced, funds are available far sooner, Haberman explains.
Waving the Red Flag – Stopping Fraud
Fraud through identity theft has become a major issue and resource drain for many companies in 2008. In November of 2008, the US Government enacted a series of regulations, referred to as the “Red Flag Rules”. In May 2009, these rules will be fully enforced by the FTC, as well as federal and state financial regulators. These regulations are designed to make financial institutions and creditors more accountable, in protecting their customers against identity theft.
In the least, these rules are complex, requiring a wide range of companies to have written identity theft prevention programs. The penalties for not complying are considerable and avoidable, Haberman says. While there is no substitute for a fully developed program, creative use of existing remittance automation technologies can be valuable first line of defence.
As an example, hot file systems can be set up to flag suspicious names and addresses, for further investigation. Implementing this is a cost effective way to filter out fraudsters, while avoiding a corresponding growth in personnel, Haberman says.
Reworking Workflows
For remittance processors, workflow is everything. In too many cases, remittance automation systems have been added on to the current workflow, without consideration as to how to best leverage this technology. When the economy was strong, this was not an important issue, Haberman notes. However, in 2009, Haberman expects to see a revolution in work process.
Companies will be taking a long hard, look at how checks and invoices are handled and whether the old workflows are making the best use of current technology. We anticipate that many processors with find considerable savings by making common sense revisions to their environments.
In some cases this may require a simple tweak, in other cases an investment in new technology may be in order, Haberman concludes.
There is an old saw that states “In chaos, there is opportunity”. There is no question that 2009 will be a chaotic year, Haberman admits. However, we believe that sometime next year a corner will be turned and the recovery will begin. Those who have prepared for this recovery will reap rewards for years to come, he says.
What do you think? Post your comments below.
There can be no question that 2008 has been a horrific year for business. Yet as bad as this year has been, 2009 is shaping up to be a year of both risk and reward for many forward thinking companies.
That’s according to Rob Haberman (rhaberman@pure-pay.com), senior product manager for Purepay Receivables Automation. Haberman notes that governments worldwide are pouring money into their economies, to kick-start recovery. Savvy companies will be shoring up their balance sheets and preparing for the inevitable upturn, he says.
Haberman shared a few thoughts on some of the process opportunities we will see in 2009.
Manage Your Costs and Your Customers’ Costs
Leveraging technology to reduce costs will be a major issue in 2009, Haberman says. Stripping waste out of your balance sheet and your customer’s balance sheet will be a key element for survival. One example is the use of remote deposit and capture.
With this, customers use small low-cost scanners to balance and transmit invoice coupons and cheques to your in-house remittance system, Haberman notes. Your customers reduce the need to manage and transport paper checks. On the other hand, you have the ability to scale your operations to meet demand variances, without major expense or disruptions. There is also the possibility for per-transaction revenue. Equally important, since transport and processing time is reduced, funds are available far sooner, Haberman explains.
Waving the Red Flag – Stopping Fraud
Fraud through identity theft has become a major issue and resource drain for many companies in 2008. In November of 2008, the US Government enacted a series of regulations, referred to as the “Red Flag Rules”. In May 2009, these rules will be fully enforced by the FTC, as well as federal and state financial regulators. These regulations are designed to make financial institutions and creditors more accountable, in protecting their customers against identity theft.
In the least, these rules are complex, requiring a wide range of companies to have written identity theft prevention programs. The penalties for not complying are considerable and avoidable, Haberman says. While there is no substitute for a fully developed program, creative use of existing remittance automation technologies can be valuable first line of defence.
As an example, hot file systems can be set up to flag suspicious names and addresses, for further investigation. Implementing this is a cost effective way to filter out fraudsters, while avoiding a corresponding growth in personnel, Haberman says.
Reworking Workflows
For remittance processors, workflow is everything. In too many cases, remittance automation systems have been added on to the current workflow, without consideration as to how to best leverage this technology. When the economy was strong, this was not an important issue, Haberman notes. However, in 2009, Haberman expects to see a revolution in work process.
Companies will be taking a long hard, look at how checks and invoices are handled and whether the old workflows are making the best use of current technology. We anticipate that many processors with find considerable savings by making common sense revisions to their environments.
In some cases this may require a simple tweak, in other cases an investment in new technology may be in order, Haberman concludes.
There is an old saw that states “In chaos, there is opportunity”. There is no question that 2009 will be a chaotic year, Haberman admits. However, we believe that sometime next year a corner will be turned and the recovery will begin. Those who have prepared for this recovery will reap rewards for years to come, he says.
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
Wednesday, August 6, 2008
Final Call For Checks
Posted by Mark Brousseau
An interesting article from Compass Bank on remote deposit capture:
The Check isn’t in the Mail—it's on Life Support
In a speech to a trade group in Las Vegas last fall, Federal Reserve Board vice chairman Donald L. Kohn noted that a check-less society has been predicted for decades. “The decline in check use has already caused the Reserve Banks to reduce by half the number of offices at which they process paper checks,” he stated.
To some observers, the idea of a checkless society echoes predictions of a cashless society that have been circulating since the advent of the first electronic payment forms. In fact, while there are clearly identifiable changes taking place in how payments are transacted, it’s unlikely that anyone alive today will live to see a time when either cash or checks become extinct.
The amount of U.S. paper currency in circulation actually has risen dramatically over the past 30 years, up to $731 billion in 2006 from $81 billion in 1975, and it’s unlikely cash will ever disappear. The use of paper checks, on the other hand, clearly is on the wane, declining by 12% from 1996 to 2004, according to research published in the Review of Network Economics in June 2006. Check usage for transactions between $20 and $80 fell more than 20% during the same period. That trend is likely to accelerate, and even where checks continue to be used, the way they are processed is evolving with the spread of new technologies such as remote deposit capture (RDC).
The advantages of RDC
“RDC is particularly significant for businesses because it opens up the way they collect their receivables on several levels,” says Joan Baraba, executive vice president at Compass Bank. “A host of industry surveys make it clear that RDC is on a rapid growth track throughout the banking industry,” she adds.
RDC offers a number of benefits to business customers, most notably improved cash flow resulting from later posting deadlines and efficiencies from eliminating the need for branch deposits. It may expedite bad-check detection in some cases, improving a business’s ability to collect on funds, and it offers the potential of significant transportation and time cost-savings.
Remote deposit capture uses imaging equipment to take paper checks and convert them into electronic images, which are transmitted to the company’s bank for processing. The convenience and time- and cost-savings from eliminating the need to physically transport paper checks to the bank coupled with the positive impact on cash flow are so compelling that market researcher Celent Communications predicts the number of business locations using RDC will grow from about 100,000 at the end of 2006 to about 1.4 million in 2012.
While RDC offers significant benefits to many types of businesses, Baraba warns it is important to keep in mind that there is no one-size-fits-all solution when it comes to payment systems—and that is a key reason why a truly cashless or check-less society is unlikely to develop any time soon.
“There are so many variables to consider when it comes to payment systems, starting with the type of payment involved,” she explains. Four general categories of payment types are business-to-business, business-to-consumer, consumer-to-business and consumer-to-consumer. Each comes with different value statements in terms of the volume, dollar value and amount of information involved.
“Regulation and fraud prevention are other issues that must be considered,” she adds. Much existing fraud-prevention technology is embedded in the paper of a check and does not survive the imaging process, for example.
“The bottom line is that RDC is just one of many different tools available to process payments,” Baraba says. “Businesses need to sit down with their financial partners and put together payment solutions that best meet their needs. In many cases, those solutions will involve multiple components.”
An interesting article from Compass Bank on remote deposit capture:
The Check isn’t in the Mail—it's on Life Support
In a speech to a trade group in Las Vegas last fall, Federal Reserve Board vice chairman Donald L. Kohn noted that a check-less society has been predicted for decades. “The decline in check use has already caused the Reserve Banks to reduce by half the number of offices at which they process paper checks,” he stated.
To some observers, the idea of a checkless society echoes predictions of a cashless society that have been circulating since the advent of the first electronic payment forms. In fact, while there are clearly identifiable changes taking place in how payments are transacted, it’s unlikely that anyone alive today will live to see a time when either cash or checks become extinct.
The amount of U.S. paper currency in circulation actually has risen dramatically over the past 30 years, up to $731 billion in 2006 from $81 billion in 1975, and it’s unlikely cash will ever disappear. The use of paper checks, on the other hand, clearly is on the wane, declining by 12% from 1996 to 2004, according to research published in the Review of Network Economics in June 2006. Check usage for transactions between $20 and $80 fell more than 20% during the same period. That trend is likely to accelerate, and even where checks continue to be used, the way they are processed is evolving with the spread of new technologies such as remote deposit capture (RDC).
The advantages of RDC
“RDC is particularly significant for businesses because it opens up the way they collect their receivables on several levels,” says Joan Baraba, executive vice president at Compass Bank. “A host of industry surveys make it clear that RDC is on a rapid growth track throughout the banking industry,” she adds.
RDC offers a number of benefits to business customers, most notably improved cash flow resulting from later posting deadlines and efficiencies from eliminating the need for branch deposits. It may expedite bad-check detection in some cases, improving a business’s ability to collect on funds, and it offers the potential of significant transportation and time cost-savings.
Remote deposit capture uses imaging equipment to take paper checks and convert them into electronic images, which are transmitted to the company’s bank for processing. The convenience and time- and cost-savings from eliminating the need to physically transport paper checks to the bank coupled with the positive impact on cash flow are so compelling that market researcher Celent Communications predicts the number of business locations using RDC will grow from about 100,000 at the end of 2006 to about 1.4 million in 2012.
While RDC offers significant benefits to many types of businesses, Baraba warns it is important to keep in mind that there is no one-size-fits-all solution when it comes to payment systems—and that is a key reason why a truly cashless or check-less society is unlikely to develop any time soon.
“There are so many variables to consider when it comes to payment systems, starting with the type of payment involved,” she explains. Four general categories of payment types are business-to-business, business-to-consumer, consumer-to-business and consumer-to-consumer. Each comes with different value statements in terms of the volume, dollar value and amount of information involved.
“Regulation and fraud prevention are other issues that must be considered,” she adds. Much existing fraud-prevention technology is embedded in the paper of a check and does not survive the imaging process, for example.
“The bottom line is that RDC is just one of many different tools available to process payments,” Baraba says. “Businesses need to sit down with their financial partners and put together payment solutions that best meet their needs. In many cases, those solutions will involve multiple components.”
Monday, June 2, 2008
What Happens in Vegas ...
By Mark Brousseau
While what happens in Vegas is supposed to stay in Vegas, Nancy Atkinson (natkinson@aitegroup.com), senior analyst at Aite Group, shared her thoughts with me on the big stories at NACHA’s Payments 2008 conference held a few weeks ago in Sin City.
And, contrary to the city’s marketing slogan, Atkinson says many of these topics will continue well beyond Vegas.
... The introduction of the new standard entry class code, IAT (International ACH Transactions) in March 2009 makes international transactions easy to identify and automates compliance reviews, Atkinson said. Significant changes are being made to ACH systems for bank originators and receivers, she noted. Since these changes interface with anti-money laundering and Office of Foreign Assets Control’s (OFAC) specially designated nationals list, testing of the systems changes is particularly important. But banks need to test with their end users as well.
... Check imaging is maturing and reaching broad acceptance. The next frontier for check image clearing is to standardize the resolution of exception items to approach 100 percent automation for clearing and settlement, Atkinson said. The Federal Reserve is coordinating efforts with all key participants on this initiative, she noted.
... Remote deposit capture (RDC) for corporations, bank branches and ATMs is being embraced like few new products. Banks enhance their revenue generation and relationship building by offering RDC to commercial clients, Atkinson said. Considerable cost savings are realized by banks that implement RDC in their branch offices and through their ATMs, she noted. It’s for this reason, that Atkinson expects significant growth on both fronts will continue through the next few years.
... The concept of payments hubs is gaining traction with financial institutions. The hub provides common functionality, such as fraud prevention, regulatory compliance and capturing fundamental payments initiation data in a single system regardless of the ultimate payments system used. Atkinson said this approach streamlines processes, centralizes compliance and fraud prevention updates, and improves customer interfaces. Clarification of the benefits and iterative and flexible implementation options for a hub lead more financial institutions to consider adoption, she said.
... Remittance data remains an important concern. Financial institutions and their clients want more data that is actionable, Atkinson explained. Initiatives that address current shortcomings in the provision of remittance information with regard to their respective payments processes include full-page image capture in RDC and the Federal Reserve and CHIPS (The Clearing House Interbank Payments System) effort to standardize remittance information for wire transfers based on ISO 20022.
“Payments 2008 initiatives focus on more than operational efficiencies.” Atkinson concluded. “There is lots of momentum around the improvement of payments processing and that momentum carries far beyond the boundaries of Las Vegas.”
While what happens in Vegas is supposed to stay in Vegas, Nancy Atkinson (natkinson@aitegroup.com), senior analyst at Aite Group, shared her thoughts with me on the big stories at NACHA’s Payments 2008 conference held a few weeks ago in Sin City.
And, contrary to the city’s marketing slogan, Atkinson says many of these topics will continue well beyond Vegas.
... The introduction of the new standard entry class code, IAT (International ACH Transactions) in March 2009 makes international transactions easy to identify and automates compliance reviews, Atkinson said. Significant changes are being made to ACH systems for bank originators and receivers, she noted. Since these changes interface with anti-money laundering and Office of Foreign Assets Control’s (OFAC) specially designated nationals list, testing of the systems changes is particularly important. But banks need to test with their end users as well.
... Check imaging is maturing and reaching broad acceptance. The next frontier for check image clearing is to standardize the resolution of exception items to approach 100 percent automation for clearing and settlement, Atkinson said. The Federal Reserve is coordinating efforts with all key participants on this initiative, she noted.
... Remote deposit capture (RDC) for corporations, bank branches and ATMs is being embraced like few new products. Banks enhance their revenue generation and relationship building by offering RDC to commercial clients, Atkinson said. Considerable cost savings are realized by banks that implement RDC in their branch offices and through their ATMs, she noted. It’s for this reason, that Atkinson expects significant growth on both fronts will continue through the next few years.
... The concept of payments hubs is gaining traction with financial institutions. The hub provides common functionality, such as fraud prevention, regulatory compliance and capturing fundamental payments initiation data in a single system regardless of the ultimate payments system used. Atkinson said this approach streamlines processes, centralizes compliance and fraud prevention updates, and improves customer interfaces. Clarification of the benefits and iterative and flexible implementation options for a hub lead more financial institutions to consider adoption, she said.
... Remittance data remains an important concern. Financial institutions and their clients want more data that is actionable, Atkinson explained. Initiatives that address current shortcomings in the provision of remittance information with regard to their respective payments processes include full-page image capture in RDC and the Federal Reserve and CHIPS (The Clearing House Interbank Payments System) effort to standardize remittance information for wire transfers based on ISO 20022.
“Payments 2008 initiatives focus on more than operational efficiencies.” Atkinson concluded. “There is lots of momentum around the improvement of payments processing and that momentum carries far beyond the boundaries of Las Vegas.”
Friday, May 2, 2008
Remote Deposit Capture Saves Gas
Posted by Mark Brousseau
An interesting article on remote deposit capture in yesterday's edition of The Charlotte Observer:
Remote deposit saves steps, gas
CHRISTINA REXRODE
In an era of online banking and cash-back at the grocery store, depositing a check is one of the few tasks that forces people to journey to the nearest bank or ATM.
Remote deposit -- or depositing a check online -- could change that.
Half the country's banks offer the service to business customers, touting its convenience. Now some smaller banks, looking for creative ways to distinguish themselves, are considering the same service for consumers.
Remote deposit lets customers scan a check, submit it to the bank online, then destroy it a few days later.
USAA Federal Savings Bank, a Texas-based bank that caters to the military, pioneered remote deposit for consumers when it launched Deposit@Home more than a year ago.
Kerri Herring, a teacher's assistant and part-time photographer in Kannapolis, said she and her husband use it at least a couple of times a month.
People often pay Herring by check for photography work.
"We're checkless most of the time," said Herring, 23, "but there are always going to be grandparents who send birthday money."
Herring hates driving to the bank just to deposit a check. "It wastes time," she said. "I hate standing in line."
Some financial institutions are starting to pick up on that vibe. Massachusetts-based EasCorp, which sells a remote deposit service called DeposZip, says seven credit unions in Massachusetts, New Hampshire, Indiana and Oklahoma now offer it to consumers, and another nine throughout the country plan to do the same.
Charlotte-based NewDominion Bank, which already offers remote deposit for businesses, says consumer remote deposit is "on the drawing board." BB&T Corp. in Winston-Salem also says it's considering it.
Other companies say they're spreading the remote deposit concept, minus the scanner. In February, the Charlotte Metro Credit Union started advertising HomeDeposit, which lets "highly qualified" customers deposit checks by submitting information from the check to the credit union's Web site, then mailing it in.
"They've all had three or four checks laying around for $10, $15," said Nathan Tothrow, the vice president of marketing. "And who wants to get in the car and drive to the bank for that?"
Mitek Systems, a San Diego company, is advertising software that lets consumers deposit checks by photographing them and emailing the image -- all via cell phone.
Biggest thing since ATMs
Charlotte-based Wachovia Corp. and Bank of America Corp. started offering remote deposit for big corporate clients in 2004.At Bank of America, product executive Bob Johnston says the response from businesses has been "phenomenal," especially for global companies who don't want to mail checks across the ocean to their different offices. "Ground courier to an airline, back to a ground courier -- you can imagine the length of time and cost to do that," Johnston said.
Among smaller companies, banks are betting that remote deposit will appeal to niches that still deal often with checks, like property managers or nonprofits.
Akil Boston, the community development coordinator for Charlotte's Second Harvest Food Bank, says that using Wachovia's corporate remote deposit has cut out his almost-daily trip to the bank. "Seven miles roundtrip," said Boston, 27. "When you look at gas prices nowadays, it's pretty economical."
Remote deposit benefits the banks, too. It can enable them to expand their reach, serving customers who don't live near a branch. It can cut down on foot traffic at the branches, which can save money on staffing. Ninety percent of a teller's work involves checks, according to Celent, a financial services research firm.
"There hasn't been a financial services technology that has received so much attention since the adoption of the ATM," said Christine Barry, research director with The Aite Group, a financial services research firm in Boston.
Consumer option unlikely soon
Remote deposit for consumers is in its early stages. A survey of 157 banks, released in March by Celent, found that one-fifth offer or are planning to offer it.
But Wachovia and Bank of America say they have no such plans. Some doubt whether most people would go to so much trouble to deposit a check.
"It would be easier to drop it in an ATM (or) the mail, or walk it into the branch during lunch hour," says Jim Bruene, editor of the Online Banking Report, a trade publication.
Banks usually charge business customers per month and per check for remote deposit, and compatible scanners can cost at least $300. To convince consumers to use remote deposit, Bruene and Barry say, banks will have to drop the fees and make it compatible with low-end scanners.
USAA, the EasCorp credit unions and the Charlotte Metro Credit Union charge no fees for their programs, and USAA and EasCorp say their programs work with most any scanner.
An interesting article on remote deposit capture in yesterday's edition of The Charlotte Observer:
Remote deposit saves steps, gas
CHRISTINA REXRODE
In an era of online banking and cash-back at the grocery store, depositing a check is one of the few tasks that forces people to journey to the nearest bank or ATM.
Remote deposit -- or depositing a check online -- could change that.
Half the country's banks offer the service to business customers, touting its convenience. Now some smaller banks, looking for creative ways to distinguish themselves, are considering the same service for consumers.
Remote deposit lets customers scan a check, submit it to the bank online, then destroy it a few days later.
USAA Federal Savings Bank, a Texas-based bank that caters to the military, pioneered remote deposit for consumers when it launched Deposit@Home more than a year ago.
Kerri Herring, a teacher's assistant and part-time photographer in Kannapolis, said she and her husband use it at least a couple of times a month.
People often pay Herring by check for photography work.
"We're checkless most of the time," said Herring, 23, "but there are always going to be grandparents who send birthday money."
Herring hates driving to the bank just to deposit a check. "It wastes time," she said. "I hate standing in line."
Some financial institutions are starting to pick up on that vibe. Massachusetts-based EasCorp, which sells a remote deposit service called DeposZip, says seven credit unions in Massachusetts, New Hampshire, Indiana and Oklahoma now offer it to consumers, and another nine throughout the country plan to do the same.
Charlotte-based NewDominion Bank, which already offers remote deposit for businesses, says consumer remote deposit is "on the drawing board." BB&T Corp. in Winston-Salem also says it's considering it.
Other companies say they're spreading the remote deposit concept, minus the scanner. In February, the Charlotte Metro Credit Union started advertising HomeDeposit, which lets "highly qualified" customers deposit checks by submitting information from the check to the credit union's Web site, then mailing it in.
"They've all had three or four checks laying around for $10, $15," said Nathan Tothrow, the vice president of marketing. "And who wants to get in the car and drive to the bank for that?"
Mitek Systems, a San Diego company, is advertising software that lets consumers deposit checks by photographing them and emailing the image -- all via cell phone.
Biggest thing since ATMs
Charlotte-based Wachovia Corp. and Bank of America Corp. started offering remote deposit for big corporate clients in 2004.At Bank of America, product executive Bob Johnston says the response from businesses has been "phenomenal," especially for global companies who don't want to mail checks across the ocean to their different offices. "Ground courier to an airline, back to a ground courier -- you can imagine the length of time and cost to do that," Johnston said.
Among smaller companies, banks are betting that remote deposit will appeal to niches that still deal often with checks, like property managers or nonprofits.
Akil Boston, the community development coordinator for Charlotte's Second Harvest Food Bank, says that using Wachovia's corporate remote deposit has cut out his almost-daily trip to the bank. "Seven miles roundtrip," said Boston, 27. "When you look at gas prices nowadays, it's pretty economical."
Remote deposit benefits the banks, too. It can enable them to expand their reach, serving customers who don't live near a branch. It can cut down on foot traffic at the branches, which can save money on staffing. Ninety percent of a teller's work involves checks, according to Celent, a financial services research firm.
"There hasn't been a financial services technology that has received so much attention since the adoption of the ATM," said Christine Barry, research director with The Aite Group, a financial services research firm in Boston.
Consumer option unlikely soon
Remote deposit for consumers is in its early stages. A survey of 157 banks, released in March by Celent, found that one-fifth offer or are planning to offer it.
But Wachovia and Bank of America say they have no such plans. Some doubt whether most people would go to so much trouble to deposit a check.
"It would be easier to drop it in an ATM (or) the mail, or walk it into the branch during lunch hour," says Jim Bruene, editor of the Online Banking Report, a trade publication.
Banks usually charge business customers per month and per check for remote deposit, and compatible scanners can cost at least $300. To convince consumers to use remote deposit, Bruene and Barry say, banks will have to drop the fees and make it compatible with low-end scanners.
USAA, the EasCorp credit unions and the Charlotte Metro Credit Union charge no fees for their programs, and USAA and EasCorp say their programs work with most any scanner.
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.
Wednesday, April 2, 2008
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.
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.
Monday, March 31, 2008
Why The Fuss Over Remote Capture?
By Mark Brousseau
Many people believe that the future of electronic payment processing includes a growing trend toward including accounts receivable, check and deposit capture at the point of presentment. So what are the benefits of this strategy? And what about its challenges?
“The strategy of moving image capture to the point of presentment provides numerous advantages,” Wally Vogel (wally_vogel@creditron.com), president of Creditron, Inc., told me. “Obviously, there is the reduction of payment document handling and forwarding, and the associated lag time. This improves cash control and offers faster funds availability.”
“Beyond that, image capture at the point of presentment allows for greater control and audit capabilities,” Vogel added. “As soon as the document is scanned, it is captured and logged, and can be tracked through various processes for depositing, accounts receivable updates, and handling change of address requests and customer service inquiries, among other functions.”
With the proper systems in place, Vogel added, document images can be viewed from any authorized inquiry station on the network for customer purposes, within minutes of receiving the document. This means that data completion from image can be completed in a remote office or in a centralized location, providing greater flexibility while maintaining strict control and a complete audit trail for each transaction, wherever it is processed.
“One of the significant challenges of image capture at the point of presentment is the need to standardize rules, processes and practices across remote offices. Otherwise, users may not get the full advantage of remote capture,” Vogel said. “This may require a thorough business analysis and a willingness to unify business processes.”
What do you think? E-mail me at m_brousseau@msn.com.
Many people believe that the future of electronic payment processing includes a growing trend toward including accounts receivable, check and deposit capture at the point of presentment. So what are the benefits of this strategy? And what about its challenges?
“The strategy of moving image capture to the point of presentment provides numerous advantages,” Wally Vogel (wally_vogel@creditron.com), president of Creditron, Inc., told me. “Obviously, there is the reduction of payment document handling and forwarding, and the associated lag time. This improves cash control and offers faster funds availability.”
“Beyond that, image capture at the point of presentment allows for greater control and audit capabilities,” Vogel added. “As soon as the document is scanned, it is captured and logged, and can be tracked through various processes for depositing, accounts receivable updates, and handling change of address requests and customer service inquiries, among other functions.”
With the proper systems in place, Vogel added, document images can be viewed from any authorized inquiry station on the network for customer purposes, within minutes of receiving the document. This means that data completion from image can be completed in a remote office or in a centralized location, providing greater flexibility while maintaining strict control and a complete audit trail for each transaction, wherever it is processed.
“One of the significant challenges of image capture at the point of presentment is the need to standardize rules, processes and practices across remote offices. Otherwise, users may not get the full advantage of remote capture,” Vogel said. “This may require a thorough business analysis and a willingness to unify business processes.”
What do you think? E-mail me at m_brousseau@msn.com.
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