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Capturing depositors for remote deposit capture


John Leekley likes to vacation at a remote cabin in Upstate New York’s Adirondack Mountains. But as CEO of RemoteDepositCapture.com, he always looks out for how different businesses handle their payments. This may not be as much fun as spotting a black-billed cuckoo in the local woods. But it still gives him cause for pause.

Like: When he spotted the owner of the 16-cabin resort accepting a lot of checks, he asked him how he handled those checks. The owner replied that he bundles them for deposit when he visits the nearest branch of his bank—80 miles away.

Leekley asked why he didn’t use RDC and instantly send the checks electronically rather than make the hefty trek. The man’s answer was simple: Nobody had ever told him that he could.

Black billed or otherwise, it’s enough to drive a banking entrepreneur cuckoo. Yet Leekley says he’s more or less used to it.  A lot of banks don’t promote RDC to the small businesses that often need it most.

“To push the needle on RDC volume, banks need to step up their game,” Leekley contends. “Today, any business that accepts checks is a candidate for RDC.”

And therein lies the problem: Small businesses need RDC, but banks acknowledge there’s room for improvement in getting the word out.

“While we’re seeing significant interest and growth in small businesses moving toward the use of digital channels, only about 15 percent of checks are deposited using RDC, so there is along way to go,” says Amir Madjlessi, executive vice president and managing director of business banking for Santander Bank N.A.

And when they don’t promote RDC, banks miss the chance to form value partnerships by selling a service with small businesses benefits.

Why is this? “A lot of financial institutions feel a disintermediation with small businesses,” Leekley says. “But this could be a way for banks to show that they care about them by offering solutions that matter.”

Donna Stundon, senior product manager of check clearing receipts in global transaction services for Bank of America, Merrill Lynch, agrees that RDC offers partnership opportunities.

“With small businesses, it’s important to really listen to them and find out what their needs are,” Stundon says. More efficient use of time, for example, is often an issue. “So instead of shutting down their business to make a trip to a bank branch, they can remain at their workplace and use RDC to make their deposits.”

Strengthening relationships with small businesses is particularly important since many now turn to FinTechs—not banks—to meet their payment needs.

“Businesses have the ability to get help in the open market today from companies such as Square or Amazon,” says David Peterson, CEO of i7strategies. When that happens, banks not only lose fee income but also the role of business finance expert.

So how can banks leverage RDC in their marketing? For starters, it’s about speed: as in faster check deposits. How fast? Some banks allow customers to scan and deposit a check via smartphone in less than 60 seconds. By comparison, that makes even the shortest teller line look like a slog.

That kind of velocity also means quick funds availability. “We have found that 99 percent of checks sent through RDC clear the same day or next day,” Leekley says. “That’s even better than automated clearing house, which can take up to two to three days.”

Adds Madjlessi: “Small businesses are cash-flow sensitive and funds availability is an important feature to them. Banks offering faster funds availability with RDC, versus branch and ATM deposits, may see a greater appetite for this service.”

As for the cost, RDC is a far cry from the pre-iPhone days when businesses needed a significant stream of checks to justify buying a desktop scanner.

“Mobile is great for customers who have just one to two checks a month,” Stundon says. “It’s more cost effective and very convenient since it feeds directly into their online banking programs. Using mobile deposits, business owners can see the deposit immediately go into their account. The transparency is great for managing cash flow.”

What’s more, businesses with technicians or sales representatives in the field can have them accept and send checks directly to the bank. And an unlimited number of employees can utilize it, “so long as their bank’s mobile app has the necessary entitlements to manage who uses RDC and offers controls, such as limits and audits,” Madjlessi says.

That said, promoting RDC will take some creativity on the part of banks. Bank of America is running demonstrations of RDC in select branches in New York and Massachusetts. “Customers can see the whole process and how it works,” Stundon says. “It’s very helpful for taking away the fear people may have of depositing their funds in a different way.”

Helpful for customers in BofA’s case has meant helpful for the bottom line. In 2015, the bank had a promotion that offered free scanners to businesses who signed up for RDC. That year, account use shot up 350 percent.

Santander launched a small-business friendly app for mobile deposits last July. “Business customers often have more checks to deposit and may need higher deposit limits than consumers,” Madjlessi says. Santandar is also tailoring business limits to meet specific, individual needs, And more changes may be on the way. 

“Right now, we’re still in a listening mode,” he says. “We’re seeing that some clients are looking for cutting-edge features such as the ability to batch deposits and link more advanced fraud solutions.”

Ultimately, if banks are to succeed in selling RDC, they may need to rethink how they price it: “Banks often nickel and dime their customers in pricing this,” says Peterson.

Instead of charging separate fees for every individual service, Peterson suggests banks analyze each customer account and assign higher costs for expensive services and give credits for “good behaviors” that lower bank costs or increase revenue. That would add up to a bundled fee that more accurately reflects the value of the relationship—and make the overall RDC proposition more attractive to businesses.

At the very least, it would mean far fewer 80 mile drives for the Adirondack Mountain resort owners of the world. Time after all is money, too—and gas isn’t exactly cheap, either.


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Lauri Giesen has spent more than 25 years writing about banking technology and payments for numerous business and financial publications. In the 1990s, she founded and edited Financial Service Online, a magazine covering Internet-based forays into banking and investment services.