Large banks provide remote deposit capture services to corporate clients. They also use RDC for teller, branch and ATM capture. A growing number of credit unions are introducing mobile RDC (or mRDC) services. Most community banks are still on the sidelines, however. Or, as a speaker at the recent RDC Summit put it, “community banks are missing in action.”
“As RDC technologies evolve, enabling more functionality at lower costs, RDC has become attainable for any financial institution, no matter the size,” said John Leekley, founder and CEO of RemoteDepositCapture.com. “RDC solutions now range in capabilities from the simple ability to truncate a check and process it for deposit, to the sophisticated capabilities in an integrated payments/receivables hub capable of accepting checks, cards, ACH and even cash, while also capturing and intelligently processing remittance data and information.”
The most potential for community banks may be in mRDC. AlixPartners, a business-advisory firm, reports that approximately 40 percent of adult Americans will use mRDC by 2016, compared to just 2 percent this year, with more than 2 billion checks projected to migrate to mRDC from other channels during the same time frame.
“Mobile RDC is the hottest trend in retail banking today,” said Leekley. “One of the greatest benefits of mRDC is its simplicity and ease of use. With a camera-equipped smartphone, you have an RDC scanner right in your pocket. From a financial institution’s perspective, it is easy to implement and costs next to nothing to support and process. In fact, recent industry studies have pegged the cost of accepting a deposit via mRDC at approximately 25 cents, compared to well over a $1 to accept a deposit at a branch.”
Not only are RDC solutions now within the reach (and budget) of any financial institution; mRDC users also are more loyal and carry higher account balances. The same survey by AlixPartners found that mRDC adopters deposit 25 percent more checks than non-mRDC bank customers; and, perhaps more significant, 81 percent of mRDC users are extremely or very satisfied with their banks, compared to 72 percent of non-mRDC users.
Yet another development that has made RDC more accessible for community banks is in scanner technology — and what Leekley calls RDC terminals, devices capable of processing checks and other payment types, as well as such data as payment stubs and invoices, driver’s licenses and full-page documents. Today, a small business can purchase a scanner for $100 to $2,500, depending on speed and capabilities, thus helping to reduce operational costs while improving all-important cash flow.
Community banks should not let credit unions take the lead with mRDC. They should also seize the opportunity to strengthen their relationships with existing small business customers with more traditional scanner-based RDC. “Now is truly the time for community banks to offer RDC,” said Leekley. “RDC is becoming a standard service offering — even to consumers — and will be such within the next few years.”
The operative phrase is “next few years.” Community banks are still in a position to become early adopters of mRDC. Moreover, as Leekley points out, fewer than 10 percent of small businesses employ RDC. This translates into growth opportunity.
Michael Scheibach is executive editor of BankNews.
Copyright (c) December 2011 by BankNews Media.