2/26/2008
01:30 PM

Taylor Vaughan, SVP of Treasury Management Services, First Tennessee Bank (Memphis)
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First Tennessee Bank Expands Deposits Footprint

First Tennessee Bank launched remote deposit capture in 2003 as a way to expand its deposits beyond its traditional footprint.

As remote deposit capture (RDC) matures, more and more banks are beginning to realize its offensive potential. How can banks use RDC as a competitive differentiator, and can it actually drive growth? And what are the technology requirements for a successful RDC strategy?

First Tennessee Bank launched remote deposit capture in December 2003 as an offensive measure. We believed this technology offered a great opportunity not only to protect our existing clients, but to expand our deposits beyond our traditional footprint, which is within the state of Tennessee. At that time, we were getting businesses all over the country through our mortgage company. We found we were able to expand our business significantly, especially with companies headquartered in Tennessee that collect money from branch offices all over the country. RDC has freed these companies from having to develop many local banking relationships in different areas. Today, we have scanners in 46 of the 50 states.

RDC especially appeals to smaller businesses, those that lack extra front-office staff to run to the bank for a few minutes. Businesses have two concerns in using RDC: What do I do with the original checks and what risks does this pose, and how can I justify the cost? The cost of the scanner is the big issue. Most banks give away the software, but companies must buy the scanner, which is still expensive.

The cost of the scanners has decreased, however, so more businesses are adopting RDC now. The next wave of folks are coming in and saying, "We haven't heard about a lot of fraud; we're not so worried. But we know we have to manage the internal controls to deal with those original checks, and the cost of implementation isn't as high as it was a few years ago, so maybe I can justify doing this." Initially, we saw good, strong sales in early adopters; now we're getting good, strong sales because RDC now makes sense for small and large businesses.

	Remote Deposit Capture Poised for Explosive Growth Remote deposit capture (RDC) has the potential to do for business customers what ATMs and debit cards have done for retail customers through self-service and convenient 24/7 access.
	More Banks Adopting Remote Deposit Capture Solutions A growing number of financial institutions have embraced remote deposit capture as a viable small and midsize business solution.
	Banks Will Face Competition in the RDC Space Third parties that can decouple remote deposit capture from the deposit relationship may pose a threat to banks in the payments space.