CUNA
  • Advocacy
    • Priorities we’re fighting for
    • Actions you can take
  • News
  • Learn
  • Compliance
  • Shop
  • CUNA News
    • Policy & Issues
    • CU System
  • Credit Union Magazine
    • Technology
    • Lending
    • Compliance
    • Marketing
    • Management
    • Operations
    • Human Resources
    • Volunteers
  • Advertise
  • Contact
  • Subscribe
  • Buyers' Guide
  • Awards
    • CU Rock Star
    • CU Hero
Learn More about Member Value

News

Member Benefits
Learn more
Learn more about the benefits of membership.
Home » Consumers Gravitate Toward Mobile RDC
Technology

Consumers Gravitate Toward Mobile RDC

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

July 29, 2013
One Comment
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.)

KEYWORDS deposit fraud mobile
  • Related Articles

    Mobile Extends Online Banking Evolution

    My P2P Solution Involves Pen and Paper

    Cross-Selling Solely in Cyberspace

Post a comment to this article

Report Abusive Comment

This Month Payments: Perils and Promise

Payments: Perils and Promise

The payments arena offers new opportunities to connect with members.
Cards Are (Still) King

Cards Are (Still) King

Credit and debit cards still drive the competitive payments market.
Open Banking on its Way

Open Banking on its Way

Prepare for the impact it will have on member relationships and competitive positioning.
App Digital Edition Subscribe

Trending

  • Compliance: CUNA offers webinar series on Regulation Z

  • Senate OKs CUNA-backed disapproval of CFPB lending bulletin

  • CUNA backs Senate use of CRA for CFPB lending bulletin

Tweets from @CUmagazine and @CUNA_News

Polls

How often do you talk to the board about compensation?

View Results
More

Champion of America’s Credit Unions

Credit Union National Association is the only national association that advocates on behalf of all of America’s credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.

More CUNA

  • About
  • Careers
  • Contact Us
  • Recommended Websites

Resources for

  • Credit Union Advocates
  • Leagues
  • Press
  • Vendors