At the Bank Lawyer's Blog there is a thoughtful discussion of remote deposit capture fraud risk and whether banks (particularly community banks) are playing it too safe. Well worth reading.
(via PaymentsN ews)
[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]
Getting to Know David Peterson of Goldleaf Financial [NACHA Payments]
Unlike the rest of my vendor conversations, David Peterson and I didn't talk about his company and its products (Goldleaf bought Alogent earlier this year). I reached out to him after seeing him speak at the TAWPI Conference last month and wanted to get better acquainted. We see eye-to-eye on the need to bring electronic payment functionality to small and mid-sized businesses in order to break B2B dependence on paper checks.
We also discussed the evolution of NACHA from a rules-based organization to its current product-focused strategy (I had just come from a small press gathering with the NACHA Leadership) and David shared his perspective. He voiced concern that the organization was less inclusive of vendors and the regional payment associations than it used to be. He is particularly unsettled by recent changes to the NACHA rules via the "administrative change" process that does not require approval or vetting by all of the stakeholders. Where they erred (in David's opinion) is that they used the administrative change rule option to change something that requires software changes. This triggers two issues, one is that if a change requires a software coding change, by definition it is not an "administrative" rules change. Secondly, the timeframe for an administrative change is short and asking all stakeholders to make software coding changes in the timeframe allowed for administrative changes is not reasonable.
I appreciate David's candor (although I imagine he is making the NACHA folks crazy) and look forward to more conversations in the future.
See also my notes from David's presentation on global deployment of remote deposit capture.
>> Return to index of my posts from NACHA Payments 2008
[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]
NetDeposit and the Future of Remote Deposit Capture [NACHA Payments]
After exchanging "small world" stories demonstrating all the ways that Danne Buchanan and I should have crossed paths before this week, we settled into a discussion of the future of remote deposit capture (RDC). By all estimates RDC growth is expected to continue for the foreseeable future, and NetDeposit is one of the industry's superstars, riding the wave of Check21 to offer remote check imaging and presentment solutions to banks of all sizes.
But as the industry matures, how will banks support the increasing number of RDC "seats" (scanners deployed at customer locations in offices across the country)? Banks are not in the business of supporting hardware and providing IT technical support to thousands of customer locations. As more and more banks roll out RDC capabilities and RDC migrates to the consumer market, how will the industry serve this base of customers?
One option is to go the route of credit card merchant acquiring, relying on independent sales organizations to sell to and provide servicing of RDC customers. Banks move one step away from their customers - and cross sell opportunities - but they avoid the headache of serving thousands of RDC seats. This scenario seems highly likely to me (and is already underway).
Another key development in the maturity of RDC will be how it is integrated with other payment channels (web, telephone, ACH debits and credits) in order to provide a holistic payment view to bank customers. Those banks that provide seamless reporting and exception management across silos will retain the most customers. And it's all about customer retention, in the end. After all, that's the big story with RDC - an opportunity to consolidate banking relationships regardless of the bank's footprint of physical branches. Robust product features will be the key differentiator.
For more on the future of remote deposit capture, check out this panel discussion at Bank Systems & Technology featuring Buchanan and three other industry leaders. See also this panel from the TAWPI conference last month.
>> Return to index of my posts from NACHA Payments 2008
[This is just one of my series of posts from the NACHA Payments 2008 conference in Las Vegas.]
The Global Reach of Remote Deposit Automation [NACHA Payments]
David L. Peterson
Executive Vice President, Goldleaf Financial Solutions
Todd McGuire
Senior Expert, Global Concepts/McKinsey
Synopsis from Conference Program
Remote deposit capture has not only eliminated geographic boundaries within the U.S., but has also leaped across national borders and continents. In this financial institution case study, organizations interested in global remote deposit deployments learn valuable lessons and gain unique first-hand insights. Speakers examine logistics of global deployment, challenges to overcome to extend globally, impact on daily operations between countries, transportation logistics and costs, bridging differences in cross-border work flows, and the likely affect SEPA will have on work flow processes.
My Observations & Comments
Sadly, I only caught the tail end of this interesting session. Peterson and McGuire explored the pros and cons of remote deposit capture as a means to facilitate inclearing of US dollar check payments from all over the world. An estimated 10-15% of payments to foreign suppliers are checks (particularly mid-market companies that are less likely to maintain bank accounts in a number of countries) and the number is growing as International trade grows. Traditionally paper checks were couriered by foreign banks to US based correspondent banks for clearing, and funds availability varied considerably. With the enthusiastic success of remote deposit capture, many of these international checks drawn on US banks are being captured outside the US and presented as an image for payment under Check 21. No known rule or regulation prevents this.
There are three models: 1) The correspondent banking model (most widely used) leverages existing relationships between correspondent banking partners.For the US Bank, their customer is another bank, facilitating know your customer compliance, and the operational and time savings are clear. 2) The third party aggregator model comes into play when the foreign bank "doesn't get it" and utilizes a third party to gather and scan the checks for presentment. The aggregator makes money by offering availability sooner than if the checks were cleared via paper, not as soon as if the bank presented the items itself. 3) Direct deployment is the third and most infrequent model. Most banks are loathe to provision and support remote capture scanners to the offices of their multinational companies overseas. But in some cases where there are very few but very large check payments (e.g. the Middle East) a US bank will equip the local office of a large customer with a scanner.
The risks are genuine. Some banks have additional fees to cover OFAC suspect review (although whether the check is presented physically or via image, the OFAC risk remains the same). Returns risk for correspondent banking relationships are handled in a variety of ways, depending on the specific agreement between the bank partners.
>> Return to index of my posts from NACHA Payments 2008
I took a slight detour en route home from Las Vegas (via Death Valley and Yosemite - spectacular!) and just finished writing up my observations.
This year is the largest NACHA Payments conference to date (they get bigger and bigger each year) with nearly three thousand attendees. There were sessions devoted to ACH, check electronification, card solutions, global payments, corporate payment solutions and the payments industry over all. Over the course of the conference I attended eight sessions and had one-on-one conversations with seven vendors. I also participated in a press conference with the NACHA Leadership.
General Sessions & Overall Observations
Summary & NACHA Leadership Interview
Keynote/Peter Raskind, National City (general session)
Break Out Sessions
International Payments
ACI Worldwide & BofAGlobal Remote Deposit Capture
Goldleaf Financial and Global Concepts/McKinseyCorporate Mobile Banking
Celent & Wells FargoXML All Stars
BofA, JPMorgan Chase, GE Corporate Treasury, Upper Midwest ACH Association, ABN AMRO BankB2B Outlook
Federal Reserve, AFP, Cal State AAA, CostcoRemittance for Wires
Federal Reserve, CHIPS, SWIFTNACHA's B2B Strategy
NACHA, CelentHow To Turn Your Online Bill Pay Expense into a Revenue Stream
eCom Advisors
Vendors
[I am in Las Vegas for the TAWPI Payments in Transition conference – these are my notes from one of the sessions. An index of all of the sessions and links to the rest of my notes is here. - EMc]
Distributed Capture Panel Discussion
Wally Vogel,
President, Creditron
Mary Hockridge, Executive VP, NetDeposit
Brandon Kunz, Director of Product Strategy, Enterprise Payments Division, Goldleaf Financial
Solutions
Charles W. Kelly Sr., formerly Senior VP, Huntington National Bank
Jon Reneslacis, Director, Product Management, VSoft
Moderator: Mark Brousseau, Brousseau & Associates
[program blurb] This interactive
panel discussion features insight and advice from prominent solutions
providers. During the session, attendees will gain a better understanding
of the latest technologies and strategies for remote deposit capture, payments
automation and receivables management. The main focus of the discussion will be
to detail the most important technologies shaping the market and the key trends
and innovations that are changing the way information is captured, processed,
managed and delivered
My notes/observations:
It was great to re-connect with Mary
Hockridge - we worked together on a distributed capture prototype for Wells
Fargo nearly 10 years ago when she was with Carreker. Back then everyone
thought we were crazy because banks and vendors were concentrating on
consolidated, huge item processing sites and we wanted to capture images in
remote branches. It was hard to find vendors who understood what we were trying
to accomplish but Carreker and Panini got it and embraced it. Now Mary is at
NetDeposit riding high on the remote capture wave and is a panelist this
morning.
Q - How does your organization
approach the distributed capture space?
Mary, NetDeposit - technology
solution provider for check electronification products: remote deposit and
image cash letter – either licensed and ASP. Resell scanners to bank customers
and their end users (ordering, fulfillment, taxes, etc.), provide back room
services for banks that want to outsource, and offer end to end marketing/sales
tools for RDC to help customers’ product introductions succeed.
Wally, Creditron - End user
remittance and wholesale lockbox. We are focused on
what the check represents for the AR/cash application process.
Scalability and flexibility to extend AR.
Brandon, Goldleaf - software for
financial services, from small/community to top 10 banks. Recently acquired
Alogent. Focus is on payments and deposit automation. Branch back counter,
front counter, kiosk, ATM, all on one platform. automation rather than capture
alone.
Jon, VSoft - privately held company.
Doubled employees. Acquired a bank data center recently (former customer) to
offer in house and ASP service. Mostly community/smaller banks + some top 25
and non-bank customers (gov't).
Charles, Huntington - Regional bank,
54 million in assets. Will share experience from transition due to acquisition
of Sky Bank (which had in house service provider) vs. Huntington (which had an
outsource model) - and lessons learned during re-evaluating the two strategies.
Q – Mary, where do you think we are
in the evolution of RDC and DC
Mary, NetDeposit – Clearly RDC has
gone through fast evolution from inception to adoption. Moving well into
the mainstream. Analysts predict that by end of 2009, there will be 1 million
remote capture installations live, e.g. sold scanner, trained, setup, and
scanning deposits. The wild card is
small biz and micro biz adoption. Huge numbers, but can service providers
and banks, adapt their pricing, service model to match small biz (smaller
budgets). Further differentiation of vendors to address niche industries
(property management, insurance). Also non FI players (ISOs that sell merchant
card products, and software companies that provide AR software for specific
industries, direct adoption by insurance, broker/dealer with significant needs
such that they go straight to technology provider, by-passing banks.
Q - Brandon what do you think the big
story is for distributed capture?
Brandon, Goldleaf– The adoption of
RDC hasn't gone as anticipated - thought full service applications were more
likely than self-service applications. Makes sense that branch back
counter was first, now moving to front counter/teller. Transportation and
accuracy benefits. But eclipsed by remote deposit at companies of all sizes,
rather than just top companies. Great opportunity for everyone.
Q - Jon, what is story in community
bank market?
Jon, VSoft – Dominated by fear, maintaining
traditional idea of being more nimble, closer to customer. Big banks have
volume, can buy into new territories. Community banks feel pressure to protect
and provide intimacy for customers – small businesses and sole proprietors. Use technology to enhance not erode customer
intimacy.
Q - Charles, what about larger
(mid-size) banks?
Charles, Huntington – go beyond large
customers, even small biz. Target high net wealth customers with desire to make
deposit from home office (coolness factor counts for them). Link with cash
vault - virtual vault - or to capture remittance as well as payment. Or capture other key documents and store
securely. Leverage platform investment and link to other products and services
that the bank offers.
Q - Wally, what is the interest among
companies you are talking to?
Wally, Creditron – Over the last 25
years, traditionally higher volume means a better business case. But with RDC the
cost of trip to the bank amortized across a very small number of items, making
the biz case look even better. Moving
away from bricks and mortar, but how to bring client close to you if visiting the
branch less frequently? Provide value add using information. Integrate deposit
solution into QuickBooks, Great Plains, etc.
Q – I am struck by how few lockbox
providers are not offering distributed capture to wholesale lockbox customers, particularly
B2B implications.
Wally, Creditron – It is starting to
happen. Concern surrounding security and control. Lockbox operations management is nervous about extending scanning
outside their controlled environment to remote site at customer location.
Q - Goldleaf, how much interest is
there in distributed payments capture?
Today in branch, can accept deposit (payment)
at teller line, scan payment and payment coupon. Read both and parse, validate
data account number, determine principle vs. interest, and create a complete
solution. How to apply to remote deposit as well? Add logic so that when scanning check, recognized that we've seen one
just like this last month – same RTN, account number – and we credited it to Wally.
So this must be a payment from Wally, too. Automate data population (acct
number, etc). Smaller billers may not have coupons, so there may be more work
to standardize.
Q Charles?
Charles, Huntington – We did remote
deposit lockbox in 2005. Provider needs to interface with lockbox (or item
processing system that looks like a lockbox). Company with software suite addressing
RDC needs to integrate with lockbox vendor. But how do vendors determine who they
want to allocate precious development dollars to interface with? [EMc comment –
this where we can better standards to move payment and remittance data from one
system to another, avoiding the need for custom interfaces.]
Mary, NetDeposit – The challenge is in enabling edit routines,
intelligence of lockbox system in remote capture at client location. Customer
has intelligence of business; lockbox software had check processing optimization
expertise. Remittance capabilities are hard to control/optimize at customer
location vs. the highly controlled lockbox workflow environment. There are usability
trade-offs and automation tradeoffs The less that customer does, the less likely
that here will be edit rule exceptions when the transactions reach the lockbox.
By utilizing SaaS it is possible to distribute capture to corporate and
have centralized - solid - process for exceptions. Allow end user to make
corrections, repair their own transactions.
Jon, VSoft – I am a former lockbox
product manager. For now, put aside customer that has a lockbox and is only trying
to deal with a few strays that wind up at corporate office. But what about the customer
that is debating whether to have a wholesale lockbox or handle myself, cannot
compete with the mail float advantage of a lockbox. Scanning needs are greater
than what a small, desktop scanner can address. More appropriate for nuisance payments.
Q – Charles, how did you sell this?
Charles, Huntington – The company had
a lockbox, but still received payments at corporate office. ROI was calculated
for 9 months, but actually paid off in 30 days. Allowed customer to get huge payments
(delivered to their office) deposited more quickly and got funds availability a
day ahead. Most customers don't appreciate or understand mail float. Float
savvy customers will want a lockbox in the right geography. Remote capture is appropriate for desk
float. Appropriate for certain industries, e.g. healthcare offices.
Q – Billers: we aren't check processors.
We outsource to you for a reason.
Charles, Huntington – A typical
medical practice has one person does all office tasks: receivables, ordering,
payments, organize meetings, etc. Help them save time, avoid extra errands.
Jon - vsoft - Why should I pay you when I am doing the work? Sales challenge is
to find the value for each individual customer. Of a universe of ten possible
RDC benefits, 1-2 benefits are most applicable for each customer. For instance,
we had a customer whose office manager was really sloppy with the ten-key. They
got $8 charges from the bank for out of balance deposits on a regular basis.
They were sold on a remote capture solution that requires transaction
balancing.
Q – billers are looking for a solution
that drives receivables. Might be coupon, invoice - need that data yet we are
using check scanners. How can industry address need to scan supplemental documents?
Some customers waiting until there is a solution that addresses remittances.
Jon, VSoft - Initially treasury was excited
about fast check deposit. Now moving on to the data integrity, and more
value-add: Is it a local install, is it ASP? How do I administer users? Merchants are not item processors or
document imagers. They have other responsibilities.
Brandon, Goldleaf - merchant customer
with two scanners (one for check one for doc?). Who are we expecting to take on
responsibilities of trained lockbox personnel? Will technology take up the
slack as capture moves to customer locations?
Q – Wally, how do you respond? Biz
model needs documents plus checks…
Wally, Creditron – Yes, customers are
capturing both check and remittance data. What is the need for the data? The AR
system needs it to apply the payments to the customer accounts. Ideally the solution is linked to cash
application batch screen. Simply add a scan button to the screen they are
already using - integrated with their usual process.
Q - Why can't we use page scanners
instead of check scanners?
Mary, NetDeposit - Page scanners do
not include MICR reading. So rely on
optical recognition. NACHA rules have limitations if you use a device that does
not recognize MICR. But the rules are fuzzy. As consumer capture becomes more prevalent,
quality of the image becomes the primary issue. Skew, etc. Everyone
downstream is subject to the quality of the image that is captured. Need affordable,
accessible scanner price tag for heavy users as well as small, micro biz , down
to consumer. Package in such a way that it is a natural purchasing decision for
customer. In the early days, company treasurers agreed to pay $1000 for
scanners up front. Not likely for other market segments.
Q – Wally, are you comfortable using
page scanners for check?
Wally, Creditron - Not with current technology.
[Mark interjects] It happens today, using OCR to read MICR. Leading vendors are
doing it – [Wally continues] … but you asked me if I am comfortable with it. Different in a high volume shop with
trained operators. In a small environment, capture is harder to control.
Brandon, Goldleaf - flatbed scanners have benefit over deposit
automation because of remittance automation. But invoice is a whole different
situation, with non-uniform format. Need more programming. For the deposit itself,
you can use the image. Vendors are thinking about it (holy grail) because it makes
deposit automation pervasive on a much wider scale. Comfortable in some situations.
FIs using it today, but the non-MICR model has a different risk profile (have
assets on deposit, know their customer very well).
Q - Billers have accused vendors of
dragging feet on combined check + page scanning.
Brandon, Goldleaf - device support is fairly easy with only a
few major providers of check scanners. But there is a wider range of page
scanner providers. TWAIN provides some consistency. Do you want to optimize
the current workflow (for which subset of customers) and integrate to QuickBooks
or are you going to re-evaluate the paradigm and have deposit itself drive the transaction?
Q - Jon, what about your customers?
Jon, VSoft – I’d rather talk about consumer capture than billers – I
have an intense internal debate about consumer capture. I love the idea from a
technology perspective, challenge of integrating flatbed, the opportunity for consumers.
I want to do it! But I get very few checks: $2 refund, $25 from my grandmother
- how will banks make money on a consumer remote deposit product? Banks don't
want to have anything to do it with it. Credit unions think vendors are too
late. But where is the business case?
Charles, Huntington - he's
right. No biz case on typical consumer.
How many checks do you receive? Very few. But for high net worth customer the
bank struggled to develop a product, but the customer demanded it! Developed
product, established process/rules to govern check storage, etc. Some niche markets
(talent management firms dealing with celebrities, for example). Vary by customer
niche. But the delivery mechanism is key.
Brandon, Goldleaf - What options does the customer have with a
$2 check? Mail to bank using a 42 cent stamp, drive to bank with gas at $4/gallon,
or just throw it out? Value to consumer is huge (convenience) and huge
opportunity to attract new deposit customers. Once BofA or WF introduces it,
consumer remote deposit will take off.
Jon, VSoft - But until the scanner can give me a $20
bill I will go to ATM. A small dollar check is not urgent. I'll carry it
around until I go to the ATM next. Banks by their nature are risk adverse;
selling this to a consumer is hard. Who sells - teller? They aren't savvy. Hard
to train sales force to sell RDC to customer: treasury, IT, receivables. Who
can address consumer questions about availability? Technology interfaces?
Audience comment: no business case, occasional
usage, huge support costs. Ouch!
Q – Will BOC meet expectations?
Q - What will be the
key differentiator in RDC?
Q - Are there too many RDC providers?
Q - Biggest mistakes banks make in
implementing RDC?
Q - What will be the big story in 18
months?
[I am in Las Vegas for the TAWPI Payments in Transition conference – these are my notes from one of the sessions. An index of all of the sessions and links to the rest of my notes is here. - EMc]
Image Integrity—A Critical Component of Check Electronification
Kerry Atha, Director of Product Development, Viewpointe
Perry Bailey-Kopp, Group Vice President, Check Production Support, SunTrust Banks, Inc.
Financial institutions are continuing their rapid adoption of check electronification, raising new concerns about maintaining image integrity—ensuring that images and their associated metadata files match. Should mismatches occur, financial institutions could face considerable risks with significant financial and customer trust/public relations repercussions. Speakers will present the challenge today’s financial institutions are facing in maximizing image integrity, a critical component of quality assurance; explore the financial and PR/customer satisfaction ‘fallout’ that occurs when mismatches happen; and detail the actions FIs and the industry must take to preserve the integrity of image presentment and storage.
[presentation]
My notes/observations:
Image integrity = correct match between image itself and its corresponding meta data. (Vs. Image quality which has to do with the image itself and was the subject of another session this morning.)
Exponential growth in image exchange in the last year. Thousands of banks, not just the big ones. Volume data from ECCHO and Federal Reserve (slides 3–4). Anticipate that 2008 will bring tipping point (more electronic checks processed than paper checks).
Kerry Atha, Viewpointe spoke first:
Ability to "share" vs. exchange item when both participants are in the same exchange.
Usability Metrics
Initial industry focus was on image quality. How to translate subjective qualities to objective measurements that everyone can agree on, and then develop software tools to check quality of images.
Image integrity is the focus of conversations between image exchange partners (particularly at beginning). They made an effort to understand one another’s processing environments, efforts made to ensure quality of images and integrity of data files. But as image exchange grows and more and more end points are added how do you evaluate the quality of the incoming images and data files?
Image quality software checks 15 parameters. But only 3 (too light, too dark, piggy-back) actually affect pay/no-pay decision. 90% of suspect items are false positives. Thus the risk tool introduces a new level of risk as operators viewing thousands of images that are actually okay are more likely to accidentally clear/approve images with genuine issues.
Perry Bailey-Kopp, SunTrust spoke next:
Banks are selling distributed capture products. Uncertain of quality of images and data-image integrity from remote deposit end points. Rely on Viewpointe to do the quality review for SunTrust. Leave images at Viewpointe and access the data only. Access images for Day 2 processing, as necessary.
Fed submitting images, too. Same challenges with remote capture sources. Quality not as good as Viewpointe, although Fed is working on it. They have a lot of end-points feeding into their system, too.
Your archive is as critical as your posting applications. If archive is corrupt (mis-matches) then your DDA data is corrupt, too. Must be very careful.
Is it necessary to subject all items to IQA/IIA (Image Quality assessment, Image Integrity assessment testing) each day? NO. 3890 reader sorter does a good job. When there is a jam, run IQA/IIA on items 30 items before, 30 items after. Run test against all rejects. Thus, only 2% of items at SunTrust subject to IQA/IIA. So far, only 7 mismatched items - all due to operator responsible for image quality review (same operator!).
Image Cash Letter (ICL) - customer scans checks and generates their own image deposit file. SunTrust runs all ICL files they receive through IQA/IIA because have no idea of imaging, process control within their customers’ operations.
Distributed Capture - SunTrust is moving toward a distributed model to replace their proof operation. [Note – this is the strategy that I worked on for Wells Fargo nearly ten years ago – way ahead of its time; alas it wasn’t implemented due to the merger with NorWest.] Distributed capture utilizes smaller scale equipment and CAR/LAR, replacing painful Image POD and its inherent problems ("I got my butt kicked by Image POD" - Perry). Power-encode turned out to be difficult: keying worked well, balancing worked well, but could not encode fast enough and get paper out of the bank. But this time around, not having to move the paper (due to Check 21), distributed capture is the way to go. Per SunTrust, if we need a paper copy we can print an IRD.
In 2 years, transportation will be the highest cost factor of check processing. You don't want to be the last guy processing paper!
Image Quality and Image Integrity metrics for SunTrust:
Administrative Returns (NCIs)
Return item - wrong RTN. When this happens, someone has to find the check. Then transport it. For a $12 check?
Do bad check images (due to puppies and flowers on the check) really matter? If you can read account number, RTN, and dollar amount go ahead and process even if image is a mess. Day 2 is always looking for reason to reject - there might be a problem if we pay this. Per Perry, just pay it and find out! The sooner you do so, the more likely you are to collect your funds.
Image Quality is Out
But if quality is out, Integrity is In
So many players along the way as items are passed from bank to correspondent bank and via vendors. Fed Receipt has so many end-points that there are more quality/integrity issues. Financial Institutions have confidence in their internal capture environment. But what about corporates using their own process/equipment and data from downstream banks, remote capture?
Mitigate risk: Capture bank has presentment risk, and paying bank has privacy issue. Lack of familiarity with trading/exchange partners.
Presentment compliance - ECHHO - presentment on the image (not the data). But systems are set to process on data.
Image integrity will impact future growth of image exchange; particularly as more and more end-points are added to the network.
How often does integrity issue occur? Hearing stats that range from 1 in 5000 to 1 in 50.000. Privacy breach remediation costs anywhere from $50 to $250,000 but that doesn't take into account the PR, operational impact due to damage control. No one wants to show up on the front page of the WSJ for violating customer privacy.
Banks and vendors need tool that is robust enough to catch integrity issues. Yet, impractical and expensive to evaluate every single item. How to target IQA/IIA tools to high risk items only. Systems need to have the flexibility to target a subset of items, in various locations (including at corporate customer sites).
Parameters for image integrity are much more straightforward than image quality. Difficulty is in determining how to interrogate the data and the image. But not possible to evaluate 100% of MICR data vs image. Need to optimize matching routine and logic. What subset of MICR line is enough (balance cost effectiveness vs. introducing add'l risk)? Matching and logic is not transferable from software platform to software platform. Optical character interrogation dependent on software. So it is difficult to develop a comprehensive solution.
[I am in Las Vegas for the TAWPI Payments in Transition conference – these are my notes from one of the sessions. An index of all of the sessions and links to the rest of my notes is here. - EMc]
Payments in Transition Town Hall Meeting
Joseph Sass, Senior Regional Manager, US Bank
Jay Matyas, VP & Sr. Product Manager, PNC Bank
Steve Nugent, Director, Product Mngt., First Data Corp.
Ronald Victor, VP, Receivables Product Mngt.,JPMorgan Chase
John Mintzer, VP, Citizens Bank
Moderator: Mark Brousseau, Brousseau & Associates
[blurb] This lively panel discussion will overview the current payments landscape, highlight major trends in instruments, volumes and marketplaces and then will discuss how these trends offer both opportunities and challenges for financial institutions and corporations
My notes/observations:
Q what is the big trend?
Steve, 1st Data/Remitco - Tipping point, in-house providers start looking to outsource as unit costs go up. As number of checks decrease. Most consumer checks processed in-house today. OS and lock in rate for 3 years. Hard to make business case internally – let go of something you’ve done for so long. Not easy, but right thing to do. Checks declining but consumer payments are increasing (10% increase over next 4 yrs). Prime market for Lockbox providers.
Ron, JPMC – certainly on consumer / retail side yet. Wholesale, gov’t – changes in receivables management. B2B single digit decline, but value is data from receivables. Receivables collaboration: single repository – lockbox, wires, ACH. Consolidated, not only by payment type but also across geographies. Invoice matching services are very important. [follow up Q – aren’t you competing against yourself? ACH vs. lockbox? A: Trying to find the right solution for each customer.
John, Citizens Bank – more expensive to run in house lockbox. One key area that billers should be looking to outsource – disaster recovery and contingency planning. Better to outsource than duplicate own facilities/resources. Go with provider that has multiple sites (one rational for citizens to os)
Joe, US Bank – retail volumes up a little bit YOY, at least at US Bank. Biggest challenge during transition (last12 months) is to keep very close eye on volume and match labor accordingly. Monitoring FTE on a weekly basis rather than monthly. Measuring items per hour. Very cautious on replacing open positions. Management of lockboxes is challenging – try to develop internal talent (promote supervisors) rather than taking months to hire managers from outside and paying a lot. Juggling match.
Steve, 1st Data/Remitco – Labor is 60% of retail lockbox cost. Now that image, MICR, CAR.LAR not much more innovation on the way. This is it; won’t get much more cost effective.
Q. Services mix is changing. Move away from LBOX as deposit solution and more to data capture/receivables solution.
Ron, JPMC – Customers want 8.5 x 11 paper scanned. And if you can match it, even better.
John, Citizens Bank – incorporate changes to retail lockbox. Consumers want to pay in a variety of ways. But billers aren’t embracing whole spectrum of payment methods. How to incorporate into the retail lockbox? Debit/CC trans thru web interface, or thru IVR, or thru eCheck. Hyperlink from customer website to processor website (and then tie to retail lockbox data transmission). Fair amount of interest – particularly among billers receiving payments from Checkfree, Online Resources (keep fully electronic, rather than drop to paper). Utility companies are very interested – often attempting on their own, thru service providers. Very receptive to bank service offering, with tie in to retail lockbox.
Joe, US Bank – Correpsondence. No one wants it back. Scanning information and posting to bank website for billers to view. Don’t want rejected payments (unbalanced multis, check only) – want wholesale services on retail lockbox to handle exceptions.
Q – What about interest in Inter-day exception management?
Adoption rate is sky – rocketing. It’s in every RFP. No one wants paper back (package maybe processed next day, or second day, or even later). If can resolve same day and get funds same day. Improve customer performance, improve working capital. Used to think it is too hard for lockbox processor. But now expecting lockbox to handle.
Ron, JPMC – Retail lockbox have had it for awhile. In Wholesale offering for real estate, property management (specific verticals). Another key factor is paper truncation. Eco-friendly pitch to wholesale customers. Up-sell image services as green.
Q – Archive non-payment related documents, too. New product announced recently.
Ron, JPMC – doc management is non-financial scanning. Health care documents that gov’t wanted digitized. Back log + ongoing transactional support. Leverage existing platform. Started offering service because Pittsburgh Steelers wanted online archive of photos, press clippings, etc. approached JPMC who partnered with Kodak.
Distributed capture – rush to scan checks. But what about the other info? Scannable coupon, remittance, etc. Starting to be closer to wholesale lockbox services. In fact, JPMC is developing a distributed capture product that looks like wholesale lockbox product targeted for November.
John, Citizens Bank – Remote capture and remote capture developed separately. As yet, haven’t tied in capture of info into lockbox. Silo challenges.
Joe, US Bank – still haven’t consolidated. Lockbox and remote capture is separate.
Steve, 1st Data/Remitco – Remitco is wholly integrated. Brokerage industry – lots of money, lots of branches. Big dollars sent overnight to lockbox processors. Can offer same day, fees are lower. Tied to lockbox. Checks and stubs. Can take full page docs and incorporate them but no one has taken them up on it yet.
Q – Where are we in automating healthcare payments?
Ron, JPMC – public sector (child care, parking tix,) created healthcare centers of excellence. Acquisition to bring to market faster; long sales cycles, customers have their one challenges (patient accounting software integration). EOB ICR templates to recognize information and creating image file to customer. Want to get ERA (835) elec remittance advice from customer. Varies by customer. Many hospitals with varying levels of adoption 0% - 80% direct to electronic. Huge market out there: $4 billion claims, 2 trillion dollars. But need to walk before you run, challenging environment. If you want to digitize paper and capture EOB – easy entry. But if you want to provide end to end solution, with claims management there are significant learnings. Two biggest players acquired by banks (JPMC and BofA).
John, Citizens Bank – retail lockbox, healthcare is pretty straightforward. Basic payments, strip data from OCR line and create 835 for hospital. Not as far down the path on wholesale side as JPMC. Working with vendor, trying to find better easy to capture info (image EOBs, claims matching on 837s)
Joe, US Bank – infancy. Two sites coming online with EOB processing.
Q - How well are lockboxes doing to create parallel processes?
Joe, US Bank – ops side. Complexity is being reduced. But challenge is for the product folks – how to position services, how to integrate. Create road map for product.
John, Citizens Bank – will get increasingly difficult on ops side. New responsibilities and lockbox becomes repository of data. Balancing, settlement, parsing of files. Checkfree files – parse to individual customer lockbox, ensure match to check deposits, and all balance to transmission to customer. Burden on operational area to ensure funds are good and information is good.
Ron, JPMC – increase in labor, for healthcare for sure. Decision management. How long store? When truncate paper? Notifications and compliance issues (broker dealers with SEC rules, HPPA for health care). Customers own compliance / audit
Steve, 1st Data/Remitco – least cost routing – more demand from customers on how to handle clearing of items We hand off to bank,
Q – what’s going on with pricing? Retail perceived as a loss leader.
Steve, 1st Data/Remitco - not at remitco. We do a pro forma on a deal by deal basis. Determine if you are making money. Larger deals with significant buying power, may purchase other services, leverage against potential loss for lockbox. Pricing is done with as much info as possible. % volume of each exception category to determine resource needs, swag at productivity rates, I’ve heard there is a loss leader, I believe there is a loss leader out there. Not at this table! Price is what makes the deal. We all offer relatively same services, in same locations, same equipment, same software. May trip and fall once and awhile. How quickly can you get back on your feet and make sure it doesn’t happen gain. It’s all about price.
Ron, JPMC – measure on variable basis, or fully loaded? 88% of respondents believe wholesale banking is profitable. Other electronic products with higher margin. Float, liquidity. Have to evaluate the total deal, total relationship. Stand alone, wholesale lockbox isn’t always profitable.
Q - Talk to me about float? How big a factor is it?
Ron, JPMC - Still pretty key. Measure on every deal we price. Included in our internal P&L measurement.
John, Citizens Bank – in our market, run against people who are giving away float, so we do too. Everything next day availability (retail). Difficult to be profitable in a retail lockbox (scan coupon check, single check only; wholesale customers wanting to be retail so they can pay less. Bringing huge volumes. Yet there is a big upfront effort to bring retail customer online (up front costs, testing, programming, scan lines, etc). Technology getting expensive for doing things outside what is typically retail lockbox. Hyperlink on customer location that allows cc trx processing (need too build interface to), eCheck gateway to ACH system, - always costs. Lot of things that work against profitability of retail lockbox.
Q – Business process outsourcers are coming into market - takeover bank or business lockbox servicing. Does this make sense, how do they make money?
Steve, 1st Data/Remitco – evidently you can make money, people are doing it. Mature, declining market (extremely mature on the verge of ancient). But there must be a business case somewhere.
Ron, JPMC – makes sense for larger institutions. Indirect expense. OS and get off balance sheet. JPMC wants to be last man standing, work with customers to get rid of paper.
John, Citizens Bank – if vendor already has investment, adding incremental volume makes sense. New BPO entering the
Q - SaaS – getting corporate to do the capture. Is that a model you’ve looked at?
John, Citizens Bank – difficult operationally.
Ron, JPMC – remote capture, get beyond traditional footprint, compete where you could not historically compete. So applicable in wholesale. Perhaps buy less hardware.
Q Steve, what is biggest threat to 1st Data/Remitco?
Steve, 1st Data/Remitco – we joked about this all night last night. The decline in checks. We’re the largest processor of mail in consumer payments in the country. Will be billions for time to come, but it is declining.
Q – Ron, biggest threat to lockbox processors, like JPMC?
Ron, JPMC – We have a lot of market share that everyone is trying to pick at. Merger took care of some of that. We need to compete against non-bank providers. They don’t have to have a clearing system. Can use remote capture. Smaller banks can compete in mid-small biz. Positive – mostly large volume. 16% market share (BofA has more) but customers are still doing a lot of their own processing. But they won’t be forever, and that’s good for us.
Q – non bank competitors, intermediaries
John, Citizens Bank – look at what they don’t do. Incorporate into bank-centric offering. Decline in checks, competition of intermediaries Break down silos between paper and electronic. One track with integrated solutions for all types of payments.
Q - Biggest threat to operations manager,
Joe, US Bank – where do I start. Volumes and capabilities. Customer wants capability – if you can’t provide you won’t get business.
Q – impact of BOC
Steve, 1st Data/Remitco – not that big a deal
Ron, JPMC, what is BOC? [laughter all around] Oh, back office conversion. No impact.
John, Citizens Bank – not much impact.
Joe, US Bank – none.
Q – 18 months from now what will be the big news in payments?
Steve, 1st Data/Remitco – Image Capture – remote payment capture (tie in payment that someone gets in branch to AR transmission. Invaluable for billers and lockbox).
Ron, JPMC – online user experience, next generation remote capture, impact of paperless on workflow (vendor models currently setup for batches)
John, Citizens Bank – image exchange, new products in property management, broken down silos
Joe – continued consolidation of industry. Worried about adequate resources. Labor. Where are the talented young people that want to enter changing industry.
[I am in Las Vegas for the TAWPI Payments in Transition conference – these are my notes from one of the sessions. An index of all of the sessions and links to the rest of my notes is here. - EMc]
Distributed Capture: Trends, Opportunities & Challenges
David Peterson, Executive VP, Goldleaf Financial Solutions
[program blurb] As the unit costs of processing paper items continues to rise, it is more important than ever for financial institutions to consider deposit automation as an essential component of their technology strategies. This session will offer a high level look at the evolution of distributed capture, its current state and projected growth both nationally and globally. It will explore various operational models, and discuss the importance of having a complete enterprise payments plan prior to selecting and implementing a solution. Participants will gain an understanding of revenue implications for branch deposit automation solutions, as well as the market and revenue potential for business and consumer deposit automation technologies.
[presentation]
My notes/observations:
This product is near and dear to my heart. I got my start in payments developing prototype for remote capture of large over the counter merchant deposits at remote branches for Wells Fargo (nearly ten years ago!)
Peterson is a dynamic speaker. And he’s funny too: he referred to Starbucks as “fourbucks” which I found amusing. Most of the audience didn’t catch it but there were a few chuckles.
Merchant Remote Deposit Capture is the most successful product introduction of all time. Fastest adoption ever – most banks are already offering (all large, most small). If your bank hasn’t offered it to you yet, you may want to reconsider your banking partner. Companies that don’t go online use it. Adoption of merchant image capture has surpassed online banking adoption. Banks will invest $10B over the next decade in Check 21 technology (3.5 million seats by 2010, per Celent, up from 260,000 in 2007).
Item Processing vs. Deposit Automation. Traditionally FIs concentrated on efficient item processing (centralized, large scale processing) vs. decentralized effort to capture, validate, ensure image quality, balance, and management of transactions in real time at all points of physical presentment (customer location, teller line, )
Teller line. 5 million seats by 2012. Retail branch capture is projected to growth 26% from 06 to 10. More time to interact with customer rather than processing transaction – improve cross selling.
Instead of gigantic large processors at central IP location, spread smaller scanners to various end points. Level load activity throughout the day. Process efficiency, mitigate risk, customer retention.
Battleground for customer desktop. If you get your scanner on the customer’s desk, you are more likely to maintain that customer location. Hard for your competitor to dislodge you and your scanner with another scanner. Especially if you deliver tight integration with customers AR (Mas90, QuickBooks, etc.).
Shift to web ASP approach. Easy to deploy. Rapid adoption. 25% of banks will have multiple solutions for different business, different distribution models (3rd party integrators); small/medium biz will be main stream – get in now.
Person who makes the deposit is often most resistant (take away my opportunity to get out of the office and take care of other errands too???)
Businesses of all sizes immediately grasp the benefits: Small biz value fewer trips to branch, safety for employees (no more nightdrop), time savings, less desk float. Larger biz value float gain, oppty to consolidate bank relationships and eliminate sweep accounts, and the cost reductions.
One size does not fit all – 1) big box (payments already consolidated at lockbox where they are converted to image and converted to ACH via ARC). Many of these companies have a small number of checks that arrive at the corporate office that are targets for small capture ASP model. 2) Big in House Capture business – automate opening/capture/posting of incoming check payments, but cannot create appropriate ACH / Check 21 image file or just need entry point to the clearing process. 3) Medium manual. Not big enough for lockbox. Need high speed capture (rather than small scanner). Concentration of items all in one place (vs. spread over a number of locations with relatively few checks each). 4) 98% of US businesses fall into the final category: small businesses with few to few dozen items per day. FIs aren’t targeting. Law firms, insurance companies, rancher, storage service. Average $3500 check – so value is in depositing in a timely manner.
Evolution of products: smart scan (lease const routing to determine ACH or Check 21), cash capture safe, in the future, ASP will dominate, consumer capture will develop as a niche product – TWAIN compliant scanner, cell phone picture, - certain financial institutions (high net worth individuals e.g. Legacy Bank in Phoenix, USAA with no branches)
Branches with fewer teller stations; remaining tellers will provide more full service (e.g account opening). Add more room for sales people: investments, loans, etc.
Comment from audience: High servicing cost for low-end market (why banks aren’t getting penetration at smaller end of the market). Cost of successful deployment is higher than taking deposit in traditional mode. Need idiot proof solution (plug and play). Whiners want to go to Starbucks when they leave the office to go to the bank,
Comment from audience: Converting checks into images; check volume is declining rapidly; won’t RDC decline too? There are still 30 billion checks out there. Becomes a question of the most efficient, convenient means of processing the minority of check transactions (very few physical deposit of checks in future, RDC will be come standard, mainstream – for both biz and consumers - solution as checks become minority payment method).
I am in Las Vegas for the fifth annual TAWPI Payments in Transition conference (with the largest attendance yet: approximately 140 billers, bankers and vendors). TAWPI - the Association for Work Process Improvement - is focused on payments automation, distributed capture, and imaging/forms processing. The Federal Reserve's latest research indicates that 50% of consumer-to-business (C2B) payments are still paper. And since most B2B transactions remain stubbornly paper-based, TAWPI provides a collaborative forum for banks, corporates, and vendors seeking best practices for managing paper checks and remittances.
Recurring themes:
Payment data alone is insufficient without remittance/customer information. There’s been significant attention paid toward electronifying the check, but what about the supporting documentation?
Much of the discussion is on how to manage dual processing streams paper decreases but linger on at increasingly at lower volumes for the foreseeable future.
Declining check volumes increase unit costs and drive consolidation among a handful of key providers. Most (vendor and bank) representatives expect that large billers will move toward outsourcing their lockbox/remittance processing as they lose economies of scale.
With the emphasis on migrating from paper to electronic, it’s no wonder Check 21 is a hot topic. Almost all speakers note the wild success of remote deposit.
No one size fits all – solutions must vary to meet specific needs of customer segments.
Click on the session title to view my notes/observations from each presentation:
TUESDAY
Keynote Address: Managing the Changing Mix of Payments
Brian Hurdis, President, Metavante Image Solutions
Back Office Conversion: Too Little Too Late?
Bob Meara, Senior Analyst, Celent
Distributed Capture: Trends, Opportunities & Challenges
David Peterson, Executive VP, Goldleaf Financial Solutions
The Convergence of Payments & Forms Processing
Mark Fairchild, Chief Technology Officer, BancTec
Payments in Transition Town Hall Meeting
Joseph Sass, Senior Regional Manager, US Bank;
Jay Matyas, VP & Sr. Product Manager, PNC Bank
Steve Nugent, Director, Product Mngt., First Data Corp
Ronald Victor, VP, Receivables Product Mngt.,JPMorgan Chase
John Mintzer, VP, Citizens Bank
Moderator: Mark Brousseau, Brousseau & Associates
Business Drivers for Payment Automation
Andrew Pery, Chief Marketing Officer, Kofax
Check 21 Road Map: One Bank's Journey Into the 21st Century
JR Thornton, AVP Indirect Client Services, Wilmington Trust
Check 21: Open Discussion Among Bankers, Billers, and Vendors
WEDNESDAY
Keynote Address: Unlocking the Value of Your Customer Data
Malcolm Netburn, Chairman and CEO
of CDS Global
Image Integrity—A Critical Component of Check Electronification
Kerry Atha, Director of Product Development, Viewpointe
Perry Bailey-Kopp, Group Vice President, Check Production Support, SunTrust
Banks, Inc.
Distributed Capture Panel
Discussion
Wally
Vogel, President, Creditron
Mary Hockridge, Executive VP, NetDeposit
Brandon Kunz, Director of Product Strategy, Enterprise
Payments Division, Goldleaf Financial Solutions
Charles W. Kelly Sr., formerly Senior VP, Huntington
National Bank
Jon Reneslacis, Director, Product Management, VSoft
Over at the TAWPI blog, Mark Brousseau asks Wally Vogel of Creditron What's the fuss over remote capture?
Wally responds as follows (emphasis is mine):
“The strategy of moving image capture to the point of presentment provides numerous advantages,” Wally Vogel 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.”
Cash processing is not only time consuming but fraught with security challenges (and associated high costs of dual custody, surveillance, etc.). The astounding success of remote deposit capture of checks has prompted interest in remote CASH deposit services.
Bankers are attracted to the ability to serve customers in areas where they do not have branches (much the same appeal as remote check deposit) and merchants receive faster availability and are able to tap into cash that is otherwise unavailable or "trapped in the system."
BofA and Fifth Third Bancorp are experimenting with specialized safes that allow customers to receive immediate credit for funds that have not left the customers' store locations.
Fifth Third Bank
BofA
Learn more:
Remote's Next Capture: Cash
Fifth Third, BofA eyeing business deposits
American Banker
Tuesday, October 23, 2007
By Will Wade
A recent survey by the Independent Community Bankers of America (ICBA) finds that community banks are leveraging technology and electronic payments to serve small business customers and extend their market reach. More than 1,100 community banks responded to the survey.
Learn more:
2007 ICBA Payments Survey
Independent Community Bankers of America
October 2007
Aite Group releases a report today predicting that check electronification will increase to 75% of checks issued by 2012. The report forecasts that the over all number of checks written will steadily decrease, but that an increasing percentage of checks written will clear electronically. These findings underscore the industry emphasis on turning paper checks into electronic transactions rather than eliminating check transactions in the first place.
Nancy Atkinson, senior analyst at Aite Group and author of the report, observes
The nature of check processing is changing rapidly, and though a number of electronic instruments will dramatically reduce the number of paper checks processed for clearing and settlement, billions of paper checks will still be written each year.
Financial institutions need to seriously consider their time of entry, as early adopters tend to pay additional costs for technological and operational challenges. However, there is no doubt that all financial institutions will eventually need to migrate to ACH conversion or check truncation, though most likely both.
The Magical Disappearing Check or the "Prestige"
Aite Group
Boston, MA, October 8, 2007
A recent survey by TAWPI indicates that Remote Deposit Capture is delivering returns to FIs and corporates:
A whopping 78 percent of respondents to a recent TAWPI Question of the Week say that their organization is receiving payback on its remote deposit capture deployment.
Only 6 percent of the 86 respondents said they weren't receiving payback, while 16 percent said they didn't know.
Celent's latest remote capture deposit report highlights the gulf between the very few financial institutions that have successfully deployed RDC solutions and the remaining 3000+ whose results are lackluster (see chart below, courtesy of Celent).
7 Habits for Successful RDC Deployment
1. A robust vision for the RDC opportunity
2. Senior management sponsorship and visibility
3. A realistic risk assessment
4. Significant investment in sales and marketing with clear objectives
5. Involvement of the retail bank at the branch level
6. Specific and incremental sales incentives
7. A sense of urgency
Successful introduction of a new product relies heavily on project management fundamentals. The most important element of leading effective change within an organization is to define and constantly communicate a compelling vision of where you are going. This responsibility falls heavily on project sponsors (executive leadership) as well as project leaders. It isn't necessarily hard to do, but requires constant attention. It's too easy to get bogged down in the technical challenges and small details of a vast deployment and forget to champion the cause.
For practical tips and suggestions for leading change and implementing technology within your organization see the ForteBlog Project Management Series.
Digital Transactions News highlights a new product from RemitPro that is being sold directly to merchants, regardless of their bank. eRemitPro enables small businesses to scan checks and prepare electronic deposits that are routed through Vanco to Wells Fargo for settlement as ACH or Check 21 items with the business' bank of choice.
Learn more:
How a Software House Sells Remote Capture Directly to Merchants
Digital Transaction News
August 30, 2007
In the September issue of Bank Technology News David Foss describes the unprecedented success of remote capture and anticipates even more growth to come, citing projections from Financial Insights and Aite. But most interesting to me was that he sees remote capture as an enabler of "merchant capture" - whereby merchants consolidate and manage their own payments gateway, presumably selecting the least cost processor or bank to handle the transactions on the back end:
Even with the large impact to date, the potential is significant for continued expansion of merchant capture. The service will become more sophisticated than capturing check images and converting them to ACH or Check 21 transactions. Merchant capture technology will soon provide the commercial customer with an opportunity to manage its own "payment gateway" to consolidate all types of payments in one spot, with one tool, giving the merchant even greater value from its banking relationship.
This future state where corporate customers call the shots, not bankers, has got to have many cash management bankers losing sleep. But it could be a tremendous opportunity for the right vendor.
Read more:
Remote Capture Is Big For Biz
By BY DAVID FOSS
Bank Technology News
September 2007
A new report from Forrester explores Remote Deposit for consumers. USAA is already doing it (see previous post).
Executive summary:
USAA has seen success in deposit growth since it began offering remote deposit capture (RDC) capabilities to consumer depositors. Although RDC adoption by businesses has been growing at a very fast rate, Forrester believes that the service for consumers needs time to enable more secure capabilities against fraud to be put in place, and to see if mass-market consumers actually realize any benefits beyond convenience. But with check writing quickly dwindling as a payments instrument, RDC for consumers might not have time to evolve into readiness for mass adoption, in which case it is likely to be a bridge technology relevant for a maximum of 10 years.
Coming Soon: Remote Deposit Capture For Consumers?
The Payments Landscape Will Drive RDC Adoption
by Mary Pilecki
July 27, 2007
Forrester Research
Over at NetBanker 2.0 Jim Bruene has a pair of posts of Remote Deposit Capture and the failure of banks to market the product effectively:
The limited marketing muscle behind the product is likely due to the fact that the banks have customers clamoring for the product before they've even developed the technology. Remote Deposit was definitely the hot service in 2006 and will continue to grow in 2007.
USAA is offering its consumer banking customers remote deposit. The new service is called Deposit@Home and enables consumers to make deposits from their home or office using a desktop scanner. A java applet recognizes the consumers scanner and imports the image directly to the USAA site where the consumer is directed to crop the image.
Deposit@Home has the potential to expand USAA's checking and savings customer base because until now USAA has relied on mail deposits. The company partnered with UPS on an expedited deposit program, but it is being replaced by Deposit@Home. USAA banking customers are reimbursed for fees when they use other banks ATMs.
It's easy and quick to use and deposits are posted immediately before 8:00 PM Central and the next day after 8:00 PM Central. The consumer receives a receipt with both front and back images of the check and is instructed to VOID and then destroy the item.
USAA offers banking, insurance, and brokerage services to military members and their families. I've had their insurance for years and recently moved my brokerage accounts over. With the new Deposit@Home service there is no reason not to move my checking account. I just wish they offered business banking servic
