Even though the volume of checks written gradually declines each year, credit unions should continue to invest in check-capture technologies that automate item processing and lower costs, says Andrew Tilbury, director of marketing and communications at Bluepoint Solutions Inc.
The two main variants of Check 21 technology are in-branch capture in both the back office and at the teller line, and remote capture at ATMs, merchant locations, at home, or via members’ smartphones.
Tilbury says Chase promoted the launch of its mobile capture product with a massive ad campaign—the newlyweds in bed depositing wedding gift checks on a smartphone—that stressed 24/7 convenience, available anytime, anywhere. “This made consumers immediately aware of the technology. All of a sudden, the paper check—on the verge of becoming obsolete—had once again become a useful payment instrument.”
The capture technology Bluepoint Solutions offers uses an image quality assurance engine to process check images, taking into account irregular angles and adverse lighting conditions.
“More than one-third of consumers own smartphones, but only a handful of financial institutions offer mobile deposit applications,” says Tilbury. “The mobile deposit movement is at its nascent stage. No one knows exactly how mobile deposit will affect the payments industry. It has the ability to revolutionize how consumers conduct financial transactions.”
Best of all, Tilbury sees mobile capture as a way for credit unions to retain members who move away. “Mobile deposit makes it easier for members to maintain their relationship with you no matter where they move.”
Matthew Bowen, senior vice president of check and document image solutions at FIS, says smartphone deposit capture is essentially self-service. “You’re seeing a gradual shift from full- to self-service, including loan payments and deposits. Consumers are looking for convenience, and remote deposit capture [RDC] appeals to younger people who like self-service channels.”
However, Bowen sees a small challenge with older members: “They might have smartphones, but many aren’t used to using the added capabilities they provide, such as cameras. So there’s a learning curve. But after they’ve done it one or two times, they have no problems.
“The smartphone is very appealing compared with a scanner/personal computer [PC] combination,” he continues. “There’s no Web-based log-in, no scanner warm-up, and it’s not tied to one location.”
The other form of remote capture technology Bowen refers to, a PC-connected scanner, is now familiar to consumers. More than one-third of U.S. households now have scanners, which have become an inexpensive technology.
“The three components that make RDC function are now readily available,” says Michael Pratt, chief marketing officer at Panini, a CUNA Strategic Services alliance provider. “They are Internet-based software that enables capture and encryption, an Internet connection, and conversion technology—a device that can read MICR. We offer a device that fits in the hand, is easily located next to the desktop, and is currently priced at less than $300.”
Catering to merchants
Pratt says rapidly developing RDC technology offers credit unions entrée into the small-business market.
“We’ve found that small businesses typically are underserved or overserved,” he says. “They either get a standard retail offering, which might be free but is consumer-oriented, or they get a corporate offering that’s feature-rich but prohibitively expensive.”
But the technology has come a long way. “In 2004, when Check 21 was introduced, check-scanning machines were big and expensive, often located at major centralized installations,” Pratt explains. “Now, with right-sized devices, RDC technology presents some great opportunities for credit unions. They’re convenient, particularly for small businesses where owners don’t have the time to visit the credit union to make deposits. So there’s a big savings on time and transportation. Also, RDC improves cash flow because of same-day processing. Money is more quickly available at crucial times.”
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