What’s New with Remote Deposit Capture?
Industry Update & Recap from the RDC Summit
Steven Vaglio, AAP
SVP, EastPay Payments Advisory
Services & Marketing
© 2013 EastPay. All Rights Reserved
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Disclaimer
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This presentation and applicable materials are
intended for general education purposes and
nothing in this presentation should be considered
to be legal, accounting or tax advice.
You should contact your own attorney, accountant
or tax professional with any specific questions you
might have related to this presentation that are of
a legal, accounting or tax nature.
Image source: Thinkstock
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Discussion Objectives
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Level Set for RDC
– RDC’s Evolving Capabilities
– The Value of RDC
– Business Model Options
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Highlights from the RDC Summit
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Mobile RDC
Corporate RDC (American Red Cross)
Risk Management
Small Business Opportunities
The Future of RDC
Q&A / Discussion
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RDC: A Spectrum of Opportunity
Remote Deposit Capture Spectrum of Value Opportunity
Maximized Value
Base Value
Operational & Deposit Automation
Convenience / Transportation Reduction
Basic
Functionality
High
The total value a FI or corporation may realize depends upon:
 Company Demographics: Volumes, Values & Locations
 RDC System Characteristics: Functionality, Process & Price
 Data & Workflows: Reporting, Integration & Automation
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RDC is a Payments Platform
RDC Applies to a family of related products & services most
often differentiated by location of check capture.
Correspondent
ATM
Lockbox
Branch
Teller
Mobile
Consumer
Merchant
Corporate
Remote Deposit Capture
The term “Remote Deposit Capture” refers to the process of electronically
capturing Payments and data, and transmitting that information for deposit
and clearing. This definition is evolving to include additional all payment
types, including card, ACH and Cash payments.
RDC is becoming an integrated technology platform increasingly used to
process different types of payments and data with the ability to feed that
data to systems both internal and external to the organization.
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RDC’s Evolving Capabilities
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Check Processing
Capture Check Data & Images
Remittance Processing (Coupons, etc.)
A/R Systems Data Upload
Consolidate Distributed Processing
Consolidate Depository Relationships
Risk Management
Evolving Capabilities:
– Various Payment Types
– Risk Management
RDC is about the Payment – Not just the check
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The “Value” of RDC is better
understood…
Base Value
 Cost Savings
 Time Savings
 Account Consolidation
Enhanced Value
 Data Automation
 Data Integration
 Risk Management
 Payments Platform
 Cash Flow Acceleration
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Business Model Options
Businesses have a growing number of RDC Options:
 FI – Provided Solutions
– The Great Deposit War Has Begun
– Greatest Pricing Flexibility
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Third-Party Service Providers
– Merchant Acquirers / ISOs
– In-House RDC
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Value Added Resellers
– Industry-Specific Accounting Packages
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The RDC Summit 2012
The RDC Summit 2012 is the industry’s premier conference on
Payments and Remote Deposit Capture, featuring hundreds of
attendees from leading Banks, Credit Unions, Corporations, RDC
Solution Providers, Regulatory Agencies and more.
Highlights:
•
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95% of the RDC Industry in Attendance
3 tracks: Corporate, Credit Unions & Community Banks, Retail & Commercial Banks
Over 24 total Sessions
Expert Speakers (American Red Cross, JPMC, Sysco Foods, Mitek Mobile and more
Over 30 Sponsors & Exhibitors
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Go Large or Go Home:
Mobile & Consumer
Capture Case Studies
Bob Hedges
Managing Director
AlixPartners LLP
Darcy Samson
VP, Small Business Deposits
U.S. Bank
David Rathke
SVP, Treasury Product Management
Frost Bank
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Mobile Is Playing an Increasingly Important Role
in Consumer Decisions to Switch Primary Banks
Role of Mobile Banking in Primary Bank Switching Decision
Among Smartphone/Tablet Owners Who Switched Primary Banks, Q2 2010 - Q2 2012
60%
48%
50%
41%
40%
36%
30%
30%
23%
Extremely important
30%
20%
10%
Important
26%
10%
7%
15%
13%
7%
18%
7%
0%
Q2 2010
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Question: How would you describe the role mobile banking services played in your decision to change primary banks?
Note: Number may not add due to rounding. Q2 2010 through Q 2 2011, based on 6 months switching; Q4 2011 through Q2 2012 based on one year switching.
Source: AlixPartners Mobile Financial Services Tracking Study, Q2 2010 (N=14), Q4 2010 (N=31), Q2 2011 (N=44), Q4 2011 (N=99), Q2 2012 (N=193)
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Mobile Remote Deposit Capture Adoption
Is Now Taking Off
Mobile Remote Deposit Capture Adoption
Q4 2010 - Q2 2012
12%
12%
Among All Respondents
Among Smartphone/Tablet Owners
9%
6%
6%
5%
4%
3%
2%
2%
2%
1%
0%
Q4 2010
Q2 2011
Q4 2011
Q2 2012
Question: Some banks now offer a secure way to deposit a paper check by taking a picture of the check using a camera-equipped mobile device and sending the picture to your bank using
your mobile device. This technology is referred to as remote deposit capture. Are you aware of this service?; Have you ever used the remote deposit capture service at your bank to deposit
a check with your came
Source: AlixPartners Mobile Financial Services Tracking Study Q4 2010 (N = 2,942 respondents, N = 711 smartphone/tablet owners),
Q2 2011 (N = 3,024, N = 811 smartphone/tablet owners), Q4 2011 (N = 5,594, N = 2,802 smartphone/tablet owners),
Q2 2012 (N = 4,554, N = 1,876 smartphone/tablet owners)
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Mobile Remote Deposit Capture Is a Critical
Feature in Consumers’ Banking Decisions
Mobile Banking Features That Would Cause People to Switch Primary Banks
Among Smartphone/Tablet Owners at Least Slightly Likely to Switch Primary Banks for Mobile
Banking, Q2 2012
Make a deposit
33%
Take pictures of checks for deposit
33%
Take pictures of bills to pay them
17%
Check account balance
17%
Pay bills wherever you are
15%
Alerts on account activity or passing of set thresholds
14%
Statements of account history
14%
Check balances on savings, checking or credit cards
13%
Transfer funds
13%
Recent transactions
11%
Status of check, stop payment on check
8%
Access to card statements
7%
Due date of payment
5%
Monitoring of term deposits
5%
Access to investment accounts
5%
Find location of nearest ATM along with maps and directions
4%
Peer to peer payments
4%
Access to loan accounts
Changing PINs
0%
4%
3%
5%
10%
15%
20%
25%
Question: What are the most important features of mobile banking that would cause you to switch primary banks?
Please choose your top three features
Source: AlixPartners Mobile Financial Services Tracking Study, Q2 2012 (N = 815)
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30%
35%
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Mobile RDC for Corporates
Reality & Revelations
Brook Ballard
Senior Manager, Treasury Operations
Sysco
(President, Houston TMA)
Kurt Matis
President & CEO
FTNI
0
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It May Be Too Early for Corporate
mRDC…
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For Corporates, Mobile RDC will be the next frontier
Current limitations include application of funds
Association of detail of payment to check imaged
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Evolution of Corporate RDC
Phase I – Check to the Bank
Phase II – Coupon/Remittance Scanning & Posting
Phase III – MICR Matching/Intelligence Lookup
Phase IV – Single Platform/Real-time Updating
Ø
Ø
Ø
Ø
Ø
Check
ACH
CC
Cash
Web
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Mobile RDC Today
Phase I – Check to the Bank
Phase II – Coupon/Remittance Scanning & Posting
Phase III – MICR Matching/Intelligence Lookup
Phase IV – Single Platform/Real-time Updating
Ø
Ø
Ø
Ø
Ø
Check
ACH
CC
Cash
Web
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Evolution of Corporate Mobile RDC
Step 1: Integrated Mobile RDC with Batch or Real-Time Updating
Step 2: Integrated Mobile Receivables with Batch or Real-Time Updating
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Making Corporate RDC a Reality
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Phase I benefited the banks & businesses
– Eliminate Trip to Bank
– Quicker access to funds
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Phase II-IV benefited the businesses
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Reduced data keying
Reduced data processing costs
Streamline A/R
Quicker reporting & follow-up
Conclusion: Mobile RDC needs to advance to the
point that businesses benefit not increase A/R
costs through manual matching & posting of
receivables.
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RDC to the Rescue
Steve Casey
Corporate Treasurer
American Red Cross
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One Red Cross
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One Red Cross – an enterprise vision for
maximum effectiveness and efficiency in
all systems, processes, and procedures.
One Red Cross Banking – We must be
able to….
– Establish visibility and immediate access to Red
Cross funds.
– Accept and deposit coins, currency, checks and
credit cards with standard processes.
– Enable chapters to procure goods and services
within the community to deliver needed services.
– Be prepared to provide financial support to
clients in response to emergencies.
– Maintain and build community-based
relationships and partnerships with banks.
“One Red Cross Bank
Account” symbolizes the
result of aligning a
network of banks
providing modern cash
management services
with centers of expertise
providing accounting and
donor management
operations.
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Red Cross RDC
Integrated capture &
digitization of all
donation types &
related documents
Common, easyto-use
application for
field office
collection of
donations
• Checks
• Cash/Coin
• Credit/Debit
• Gift Letters
• ID Cards
Payments Gateway
to process all
transactions and
documents
Integration with
back-office
systems
• Finance
• Accounting
• Donor DB
Flexible Payment
Processing
• ACH
• ICL
• Acquirer
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Red Cross RDC – Results!
An efficient and effective back office allows the
Red Cross to continue to maximize the use of
each donor’s contribution to help those in need.
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We now have ONE:
– System to capture, digitize, and transmit donations
– Gateway to process all donations
– Integration of donation transaction info to back-end systems
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Business impact:
– RDC has allowed Red Cross Finance team to begin consolidation
of COE's into a Shared Service Center
– Consolidation is occurring about a year earlier than originally
planned
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RDC Impacts @ the American Red Cross
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DDA Accounts:
– Pre-RDC: 4,200+
– Post-RDC: ~60
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Banking Relationships:
– Pre-RDC: 300+
– Post-RDC: ~13
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Time it takes to “apply” donations / funds:
– Pre-RDC: 3 – 5 Days
– Post-RDC: 1 day, on average
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Other Valuable Benefits
– Elimination of trips to the bank, increased volunteer productivity, data
automation, single point of control, better cash management & investing
visibility / capability, better application of funds, and more.
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RDC Risk Management
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All Bark, No Bite
– Actual losses uniquely attributable to RDC have been minimal.
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Compliance & Perceived “Fear” = #1 Issue for FIs
#1 Risk: Duplicate Presentment / Physical Items after
deposit.
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Corporate RDC Risk Management “Top
Ten”
1. Setup Automated Reports & Alerts
2. Separation of Duties
3. Have a Backup Plan
4. Restrictively Endorse All Items
5. Safekeep all items
6. Destroy all items
7. Implement Positive Pay
8. Choose the “Right” Solution
9. Understand the “Cons”
10. Utilize Duplicate Detection
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The Greenfield Opportunity
Small Business RDC
Christine Barry
Research Director
Aite Group
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RDC is a natural fit for small businesses, yet
product adoption is below bank expectations
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RDC helps small
businesses save time,
increase convenience,
and operate more
efficiently
More than 50% of U.S.
banks have deployed
RDC
Less than 5% of small
businesses have adopted
it
For most institutions,
adoption is below
expectations
Source: Aite Group survey of top 50 U.S. Banks, September-October 2011
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Low small-business adoption is not reflective
of interest in the product
Source: Aite Group small-business survey, August 2011
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In fact, interest in RDC has grown over
the last two years
Source: Aite Group small-business surveys July 2009 and August 2011
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…Small businesses may go elsewhere
Source: Aite Group Small-Business Survey, August 2011
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Small Business: The “Greenfield” Opportunity
There are over 29 Million Small Business Locations
in the USA Today.
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Fewer than 1 Million use RDC Today
Mobile RDC will play an increasing Role
– Low Volume, Convenience Play
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Desktop Integrated RDC will be increasingly attractive.
– Account Reconciliation / Data Application
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The ability to accept multiple payment types is increasingly
important
– A Single Payments & Data processing platform.
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We’ve only just begun…
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Fewer than 2 million locations in operation today on Traditional RDC
Checks remain a primary payment method.
2/3 of all $$$ received by businesses are by Check (AFP).
Over $32 Trillion was paid by check in 2009 vs. less than $5 Trillion via
Cards (Fed Study).
There are over 29 Million Small Business locations (Less than 1 million
in operation today)
Undeniable business case for both end-users as well as FIs.
Over 1 Million Mobile & Consumer RDC Users
Integration of Card, ACH, Cash.
Document & Data Automation
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The Road Ahead
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Mass Adoption Mobile Capture
– FIs, Third-Parties & Consumers
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Increasing Role of 3rd-Party Solutions
– PayPal, Intuit, ISOs, ISVs, AFS (Alternative
Financial Services), etc.
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RDC as a Payments Platform
– Checks, Cards, ACH, Cash
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Data Automation, Integration & Risk Management
Remote Deposit Capture is increasingly being used by businesses and
corporations as an integrated, value-added technology platform to
process all payments and related data, resulting in cashflow
acceleration and automated data application.
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Questions?
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Contact The Presenter

Steven Vaglio, AAP
SVP, EastPay Payments Advisory Services &
Marketing
svaglio@EastPay.org
www.EastPay.org
800-681-4224
General Information info@EastPay.org
Audit and Risk audit@EastPay.org
Education education@EastPay.org
Follow Us on Twitter
@EastPay
https://twitter.com/EastPay
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Learn More - Online
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