Consumer RDC Appeals to Small and Home Offices

SOHO business owners prove an ideal target market for consumer remote deposit, but as RDC proliferates so will opportunities for fraud and scrutiny into risk management.

There are thousands of small office/home office (SOHO) business owners who would benefit from a Web-based consumer check capture solution. Consumer capture is making it easier, safer, cheaper and more efficient to accept checks. In fact many small businesses prefer check payments as checks are less expensive to accept than credit/debit cards.

Consumer capture improves cash flow and deposit capabilities for every kind of business model. High-dollar checks get deposited more quickly and the large volume of low-dollar checks don't need to be constantly driven to the bank for deposit. This type of solution will also help drive image capture for some of the categories of payments that will be the last to be converted to an electronic payment form.

However, consumer capture will open the door to new check fraud scenarios over the Internet, as well as fraud in depositing the same check online and physically at a branch. As a result, consumer capture will add a new level of analysis and review from regulatory bodies that already are introducing new levels of scrutiny into risk management for RDC. (See the Federal Financial Institutions Examination Council's guidance for risk management of RDC, issued in January 2009.) In an industry where "Know your customer" is the mantra, moving into consumer capture may raise regulators' concerns even higher.

Consumer capture is best suited as an option integrated with the financial institution's online banking offering. This scenario makes it quick and easy for clients to get started. They are generally familiar with the intuitive, user-friendly online banking screens, and they can begin making image deposits right away.