Based on Celent research, more than half of U.S. banks have adopted RDC solutions, and nearly 90 percent plan on adopting solutions in the future. Particularly among midsize to large banks, RDC began as a product within treasury management aimed at corporate clients. Since then, a growing number of financial institutions have embraced RDC as a viable small and midsize business solution and have launched separate initiatives addressing that market -- often with a lower cost and simpler solution. In a December survey of 167 financial institutions, 30 percent indicated plans to launch small business-focused RDC solutions in the future. Competition is heating up!
Many first-generation RDC solutions were hastily launched -- in many cases, before banks' back offices were ready to process the images. The result led to higher processing costs, rather than anticipated efficiency gains. Since that time, however, RDC has become a preferred deposit channel in terms of processing efficiency among a growing number of financial institutions. One top-25 bank asserted at BAI TransPay that RDC deposits were significantly less expensive to process than deposits received in branches. But operations efficiency is not the driving impetus behind RDC.
As deployers gain confidence in deploying and supporting RDC clients, many are venturing out of traditional footprints for clients instead of offering RDC just to current clients. The result is exceedingly low-cost core deposit growth.
Last fall, Celent conducted research among "highly effective" deployers of RDC solutions, noting that as a group, they were deploying to more than 200 times as many clients than peer group institutions. Interestingly, the best products or the lowest pricing did not correlate to highly successful deployments. Going forward, as the market becomes more competitive, product differentiation will become relatively more important.
|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.
|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.
|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.