Best Practices in Remote Deposit Capture

1
Best Practices in Remote Deposit Capture

• Bob Meara
• Sr. Analyst, Banking Group
• Celent LLC
• bmeara_at_celent.com
• Fiserv Item Processing
• June 9, 2006

2
Agenda

• RDC in context
• Current deployment snapshot
• Best practices sampler

3
Banks are hungry for depositsGap between loan
and deposit growth widening
4
Businesses are a growing source of checkable
deposits
44 49 60 44 45 49 54 58
Source Celent analysis based on Flow of Funds.
5
Remote capture opportunity shows promise12
billion checks are processed at commercial sites
Check Volume by Counterparty and Purpose 2003
Potentially stopped at commercial sites (12 bil.
checks)
Remit. non-lbx
Potentially stopped at the branch/ATM/mail (11.3
bil. checks)
POS
Income
Casual
Remit./ lockbox
Source Federal Reserve and Celent estimates
6
Banks of all sizes are launching remote deposit
capture services

• Of the top 20 banks, all are either in production
  or pilot
• Less than third are offering both check
  truncation and check conversion (MICR data off
  check used to initiate an ACH debit)
• But absolute deployments are almost trivial but
  growing
• Few banks are aggressively selling, or have just
  recently begun to do so
• Part of the challenge is coordination between
  sales and operations
• Small banks are entering the fray with big bank
  ambitions
• e.g., Independence Bank is a small community
  bank that is developing a national footprint
  through the deployment of better technology. 
  Independence Bank is leading the way in remote
  deposit solutions for the end user.  Join the
  revolution.
• Their relative size and organizational structure
  gives them a time-to-market advantage
• Banks are beginning to experiment market
  segmentation and non-traditional sales to small
  business customers
• A few are deploying scanners and software in the
  branch

7
Adoption Snapshot
Does not include any correspondent processing
8
A variety of customers are showing interestin
remote capture
Legend many locations one location
Value High Low
E.g., retail brokerage ofcs.
E.g., auto dealers
E.g., livestock auction houses
E.g., life insur. co.
E.g., cable co. payment ofcs.
E.g., real estate mgt. co.
Low High Volume
9
Celent expects implementations to taxi during
2006 and take-off in 2007 and beyond
10
General Best Practices

• Ready your product
• Know risk levers
• Become efficient at deployment, training and
  support
• Know what it is and isnt
• Aim at the market sweet spot
• Prioritize market segments based on your
  objectives and your solution capabilities
• Arm your sales officers
• Easily demonstrable solution
• Uncomplicated pricing policies
• Aggressive promotion

11
Solution Best Practices

• Simplify provisioning and deployment
• Third-party staging and deployment capacity
• Simple documentation
• FEW user-level configuration options
• Web based or other automated new user training
• Follow up or scheduled telephone consultation
  EARLY

12
Sales Marketing Innovations

• Generating Awareness
• Statement stuffing
• Branch selling
• Web demonstrations use your cash management
  system
• Sales Programs
• Segment targeting sales blitzes
• Out-of-footprint lending clients
• Specific verticals healthcare, insurance,
  property management
• Meaningful incentives
• Track progress existing vs. new deposit growth

13
Thank You!

• Bob Meara
• Sr. Analyst, Banking Group
• Celent LLC
• bmeara_at_celent.com
• Fiserv Item Processing
• June 9, 2006