Many small-business owners have undoubtedly heard about remote deposit capture (RDC), and they’ve seen people make deposits by taking pictures of checks with their smartphones. But incorporating those time-saving technologies into their small-business operations will have to wait—because these business owners are just too busy.
Jeff Mack, CEO of Cachet Financial Solutions Inc., compares the present situation with RDC and mobile banking services to the early days of the ATM. When ATMs first came on the scene, Mack says most financial institutions doubted consumers wanted 24/7 access to their cash. After all, consumers didn’t know that lack of access to cash was a problem needing a solution.
But the convenience soon caught on. Today, nearly 300,000 stand-alone ATMs nationwide routinely dispense cash and perform other financial tasks. Mobile banking seems to be following a similar adoption trajectory with consumers. But small-business owners have been slower to embrace these new technologies.
Educating small businesses
Mack says small-business owners have yet to learn just how much they can benefit from RDC and mobile banking.
Credit unions that educate businesses about the value of easy-to-use RDC and mobile solutions are positioned to retain valued lending relationships and win over new members.
“You have to help businesses envision the possibilities,” Mack says. That requires on-site demon-strations to show business members how RDC can change their workflow and provide same-day ac-cess to deposited funds.
You can deliver RDC services in two ways:
Both solutions rely on vendor software to use an Internet connection to make deposits, verify that users comply with deposit limits and other rules, and integrate RDC with other services.
Pick your target
Leading RDC vendors say a thorough understanding of small-business owners’ needs can help credit unions craft the right strategy.
Microbusinesses are apt to have straightforward deposit needs that can be easily handled by a mo-bile RDC solution, says Larry Middleman, CEO of CU Business Group. The company offers RDC services to credit unions through a partnership with BankServ.
Middleman says larger businesses will want more options and more sophistication for both online business banking and desktop RDC. These enhanced options include the ability to share account ac-cess with a variety of employees or others who serve their business. Businesses are typically willing to pay a monthly fee for these services.
“You need to decide what your target market is,” Middleman says. “We’re seeing a lot of credit un-ions trying to ramp up their package of services to attract a larger, more sophisticated, more profitable business relationship to supplement the commercial loans they may already have on the books.”
Integration with online banking and other services makes RDC user-friendly for businesses, but Middleman notes that integration increases implementation costs and complexity, making it difficult to recoup costs with monthly fees.
“A simple, Web-based system that allows you to outsource a lot of the processing to a larger vendor can be a cost-effective option for many credit unions,” Middleman says.
The mobile approach
If a credit union decides to offer both desktop and mobile RDC, it’s advisable to implement them one at a time within a long-term strategy that guides business services, according to Gary Brand, director of Source Capture Solutions® for Fiserv.
Financial institutions typically introduce desktop RDC first, but credit unions should bear in mind that demand for mobile RDC is likely to grow.
“Most consumers and most business owners are looking for a single place to go for services from a financial institution, whether it’s from a laptop or from a mobile device,” Brand says.
Owners of small businesses are willing to switch financial institutions to obtain those services. Brand offers the example of a Texas irrigation company that changed financial institutions so it could equip the drivers of its three service trucks with smartphones that allow them to use mobile RDC to deposit clients’ checks at the point of service.
Due to their small number of employees and relatively simple needs, microbusinesses are likely to take advantage of mobile RDC solutions designed for consumers, according to Calvin Grimes, Fiserv’s product manager of mobile services. Grimes predicts consumers and microbusinesses will show a “staggering” demand for mobile RDC in the months and years ahead.
Both types of RDC should be part of a package of services aimed at meeting the long-term needs of business members.
“The challenge will be how you bundle services in a package that makes it a compelling offer the business will be willing to pay for,” Brand says.
Next: More than deposits