Technology

Consumers Gravitate Toward Mobile RDC

Depositing checks via mobile devices is becoming more popular, but security concerns remain.

July 29, 2013
KEYWORDS deposit , fraud , mobile
/ PRINT / ShareShare / Text Size +
iStockphoto/Thinkstock®

Check deposits using mobile devices is becoming more popular among credit unions and their members, according to “State of Consumer RDC: The Death of Desktop” from Celent.

Fifteen percent of credit unions with more than $50 million in assets offer mobile/image deposit capture—and nearly 50% plan to introduce it in the next year, according to the 2013-2014 CUNA Fees Report.

Remote deposit capture (RDC) is becoming a viable self-service deposit channel for anyone with a scanner—a demographic that includes virtually all small businesses.

More popular still is mobile RDC, which invites the use of smartphones, through either a stand-alone application or as part of a broader mobile banking solution.

The customer segment using mobile remote deposit capture remains small, and fraud concerns continue to hinder rapid expansion.

Eighty percent of U.S. financial institutions plan to offer, or will consider offering, mobile RDC, says Celent. The firm estimates that the number of credit unions and banks providing the service this year will double to about 1,000 institutions.

Desktop RDC using scanners or multifunction devices still will be offered to small businesses, while financial institutions view mobile as the platform of choice for consumers.

“Widespread adoption of mobile RDC is a given, but it won't necessarily be easy," says Bob Meara, Celent senior analyst.

“Balancing regulatory compliance, risk management, and growing consumer demand will challenge many institutions," he adds.

Mobile RDC might result in reduced branch traffic, presenting a sales challenge to institutions with a strong cross-selling culture.

But deposit-related foot traffic comes at a significant cost. Weighing those costs with members' growing demand for these services could hasten a branch transformation for some credit unions.

While some financial institutions have tried pitching mobile RDC to small-business clients, most have found the service is efficient only for small independent companies.

Companies that deposit more than 100 checks each month will do better with traditional RDC services, while individuals or small businesses that deposit only a few checks a month might consider mobile.

Fraud concerns

The possibility exists that a customer could use the mobile service to electronically deposit a check at one financial institution and then physically deposit the same check at another.

While the automated clearinghouse should catch the matchup in identification numbers, it could take several days for that to happen and most institutions want to offer same-day or next-day funds availability.

As a result, most institutions begin by limiting the size of checks—maximum amounts range from $1,000 to $5,000—and offering the service only to longtime, trustworthy customers.

Still, fraud remains a concern. Although mobile RDC has seen few instances of fraud, regulatory requirements and the threat of fraudsters make this a continuing issue.

Phone camera images have proven to be of sufficient quality, mitigating industry concerns.

Institutions initially expected acceptance rates on mobile check images of less than 80%, but improved software that corrects for wrinkles or shadows has led to nearly 100% acceptance.

(Via E-Scan Newsletter.)

Exciting Times in the Credit Union world

Nate Wentzlaff
July 29, 2013 2:01 pm
These are sure exciting times for Credit Unions. As we continue to bring more competitive advantages to credit unions, we should see an even more integrated financial system among our communities. This, along with more Analytics and Business Intelligence supporting decisions, should start to give the edge to the Credit Unions!


Flag Comment as Offensive

Post a comment to this story

heroes

What's Popular

Popular Stories

Recent Discussion

Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory (www.appreciationatwork.com/assess) will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

Your Say: Who should be Credit Union Magazine's 2014 CU Hero of the Year?

View Results Poll Archive