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Transcript of © 2013 EastPay. All Rights Reserved What’s New with Remote Deposit Capture? Industry Update &...
© 2013 EastPay. All Rights Reserved
What’s New with Remote Deposit Capture?
Industry Update & Recap from the RDC Summit
Steven Vaglio, AAPSVP, EastPay Payments
Advisory Services & Marketing
Resp
ect
Team
work
Passio
nIn
teg
rity
Tru
st
EASTPAY Not-for-profit Regional Payments Association Educational Programs Member benefits
– Voice & Representation in National Rule Making and Regulatory Process
– Toll free operational assistance and – Discounts on seminars, publications, conferences
Online purchasing and registration 8 ACH Accredited Professionals (AAP) on staff
2© 2013 EastPay. All Rights
Reserved
Disclaimer
This presentation and applicable materials are intended for general education purposes and nothing in this presentation should be considered to be legal, accounting or tax advice.
You should contact your own attorney, accountant or tax professional with any specific questions you might have related to this presentation that are of a legal, accounting or tax nature.
Image source: Thinkstock
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Discussion Objectives
Level Set for RDC– RDC’s Evolving Capabilities– The Value of RDC– Business Model Options
Highlights from the RDC Summit– Mobile RDC– Corporate RDC (American Red Cross)– Risk Management– Small Business Opportunities– The Future of RDC
Q&A / Discussion
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RDC: A Spectrum of Opportunity
The total value a FI or corporation may realize depends upon: Company Demographics: Volumes, Values & Locations RDC System Characteristics: Functionality, Process & Price Data & Workflows: Reporting, Integration & Automation
Operational & Deposit AutomationConvenience / Transportation Reduction
Remote Deposit Capture Spectrum of Value Opportunity
Base Value
Maximized Value
FunctionalityBasic High
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RDC is a Payments PlatformRDC Applies to a family of related products & services most often differentiated by location of check capture.
Remote Deposit Capture
Lockb
ox
Bra
nch
Teller
Corp
ora
te
Merc
han
t
Corr
esp
on
de
nt
ATM
Con
su
mer
RDC is becoming an integrated technology platform increasingly used to process different types of payments and data with the
ability to feed that data to systems both internal and external to the organization.
Mob
ile
The term “Remote Deposit Capture” refers to the process of electronically capturing Payments and data, and transmitting that information for deposit and clearing. This definition is evolving to include additional all payment types, including card, ACH and Cash payments.
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RDC’s Evolving Capabilities
Check Processing Capture Check Data & Images Remittance Processing (Coupons, etc.) A/R Systems Data Upload Consolidate Distributed Processing Consolidate Depository Relationships Risk Management Evolving Capabilities:
– Various Payment Types– Risk Management
RDC is about the Payment – Not just the check
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The “Value” of RDC is better understood…
Base Value Cost Savings Time Savings Account
ConsolidationEnhanced Value Data Automation Data Integration Risk Management Payments Platform Cash Flow
Acceleration
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Business Model Options
Businesses have a growing number of RDC Options: FI – Provided Solutions
– The Great Deposit War Has Begun– Greatest Pricing Flexibility
Third-Party Service Providers– Merchant Acquirers / ISOs – In-House RDC
Value Added Resellers– Industry-Specific Accounting Packages
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The RDC Summit 2012
The RDC Summit 2012 is the industry’s premier conference on Payments and Remote Deposit Capture, featuring hundreds of attendees from leading Banks, Credit Unions, Corporations, RDC Solution Providers, Regulatory Agencies and more.
Highlights:• 95% of the RDC Industry in Attendance• 3 tracks: Corporate, Credit Unions & Community Banks, Retail & Commercial
Banks• Over 24 total Sessions• Expert Speakers (American Red Cross, JPMC, Sysco Foods, Mitek Mobile and
more• Over 30 Sponsors & Exhibitors
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Bob HedgesManaging DirectorAlixPartners LLP
David RathkeSVP, Treasury Product Management
Frost Bank
Darcy SamsonVP, Small Business Deposits
U.S. Bank
0
Go Large or Go Home:Mobile & Consumer
Capture Case Studies
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Mobile Is Playing an Increasingly Important Role
in Consumer Decisions to Switch Primary Banks
Question: How would you describe the role mobile banking services played in your decision to change primary banks?Note: Number may not add due to rounding. Q2 2010 through Q 2 2011, based on 6 months switching; Q4 2011 through Q2 2012 based on one year switching.Source: AlixPartners Mobile Financial Services Tracking Study, Q2 2010 (N=14), Q4 2010 (N=31), Q2 2011 (N=44), Q4 2011 (N=99), Q2 2012 (N=193)
Role of Mobile Banking in Primary Bank Switching Decision Among Smartphone/Tablet Owners Who Switched Primary Banks, Q2 2010 -
Q2 2012
Q2 2010 Q4 2010 Q2 2011 Q4 2011 Q2 20120%
10%
20%
30%
40%
50%
60%
7%13%
7%
15%18%
7%
23%
36%
41%
48%
10%
30%
26%
30%
ImportantExtremely important
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Mobile Remote Deposit Capture Adoption Is Now Taking Off
Mobile Remote Deposit Capture AdoptionQ4 2010 - Q2 2012
Question: Some banks now offer a secure way to deposit a paper check by taking a picture of the check using a camera-equipped mobile device and sending the picture to your bank using your mobile device. This technology is referred to as remote deposit capture. Are you aware of this service?; Have you ever used the remote deposit capture service at your bank to deposit a check with your cameSource: AlixPartners Mobile Financial Services Tracking Study Q4 2010 (N = 2,942 respondents, N = 711 smartphone/tablet owners),
Q2 2011 (N = 3,024, N = 811 smartphone/tablet owners), Q4 2011 (N = 5,594, N = 2,802 smartphone/tablet owners), Q2 2012 (N = 4,554, N = 1,876 smartphone/tablet owners)
Q4 2010 Q2 2011 Q4 2011 Q2 20120%
3%
6%
9%
12%
1%2%
2%
6%
2%
4%5%
12%Among All Respondents
Among Smartphone/Tablet Owners
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Mobile Remote Deposit Capture Is a CriticalFeature in Consumers’ Banking Decisions
Question: What are the most important features of mobile banking that would cause you to switch primary banks? Please choose your top three featuresSource: AlixPartners Mobile Financial Services Tracking Study, Q2 2012 (N = 815)
Mobile Banking Features That Would Cause People to Switch Primary Banks
Among Smartphone/Tablet Owners at Least Slightly Likely to Switch Primary Banks for Mobile Banking, Q2 2012
Changing PINs
Access to loan accounts
Peer to peer payments
Find location of nearest ATM along with maps and directions
Access to investment accounts
Monitoring of term deposits
Due date of payment
Access to card statements
Status of check, stop payment on check
Recent transactions
Transfer funds
Check balances on savings, checking or credit cards
Statements of account history
Alerts on account activity or passing of set thresholds
Pay bills wherever you are
Check account balance
Take pictures of bills to pay them
Take pictures of checks for deposit
Make a deposit
0% 5% 10% 15% 20% 25% 30% 35%
3%4%
4%
4%
5%
5%
5%
7%
8%
11%
13%
13%
14%
14%
15%
17%
17%
33%
33%
Mobile RDC for CorporatesReality & Revelations
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Brook BallardSenior Manager, Treasury Operations
Sysco(President, Houston TMA)
Kurt MatisPresident & CEO
FTNI
0
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It May Be Too Early for Corporate mRDC…
For Corporates, Mobile RDC will be the next frontier
Current limitations include application of funds Association of detail of payment to check imaged
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Evolution of Corporate RDCPhase I – Check to the Bank
Phase II – Coupon/Remittance Scanning & Posting
Phase III – MICR Matching/Intelligence Lookup
Phase IV – Single Platform/Real-time Updating
Ø CheckØ ACHØ CCØ CashØ Web
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Mobile RDC TodayPhase I – Check to the Bank
Phase II – Coupon/Remittance Scanning & Posting
Phase III – MICR Matching/Intelligence Lookup
Phase IV – Single Platform/Real-time Updating
Ø CheckØ ACHØ CCØ CashØ Web
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Evolution of Corporate Mobile RDC
Step 1: Integrated Mobile RDC with Batch or Real-Time Updating
Step 2: Integrated Mobile Receivables with Batch or Real-Time Updating
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Making Corporate RDC a Reality
Phase I benefited the banks & businesses– Eliminate Trip to Bank– Quicker access to funds
Phase II-IV benefited the businesses– Reduced data keying– Reduced data processing costs– Streamline A/R – Quicker reporting & follow-up
Conclusion: Mobile RDC needs to advance to the point that businesses benefit not increase A/R costs through manual matching & posting of receivables.
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RDC to the Rescue
Steve CaseyCorporate TreasurerAmerican Red Cross
0
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One Red Cross One Red Cross – an enterprise
vision for maximum effectiveness and efficiency in all systems, processes, and procedures.
One Red Cross Banking – We must be able to…. – Establish visibility and immediate access to Red
Cross funds.– Accept and deposit coins, currency, checks and
credit cards with standard processes.– Enable chapters to procure goods and services
within the community to deliver needed services.– Be prepared to provide financial support to
clients in response to emergencies. – Maintain and build community-based
relationships and partnerships with banks.
“One Red Cross Bank Account”
symbolizes the result of aligning a network
of banks providing modern cash management
services with centers of expertise
providing accounting and donor
management operations.
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Red Cross RDCIntegrated capture &
digitization of all donation types &
related documents
• Checks• Cash/Coin
• Credit/Debit• Gift Letters
• ID Cards
Payments Gateway to process all
transactions and documents
Common, easy-to-use application
for field office
collection of donations
Integration with back-
office systems
• Finance• Accounting• Donor DB
Flexible Payment
Processing• ACH• ICL
• Acquirer
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Red Cross RDC – Results!
An efficient and effective back office allows the Red Cross to continue to maximize the use of each donor’s contribution to help those in need.
We now have ONE:– System to capture, digitize, and transmit donations– Gateway to process all donations– Integration of donation transaction info to back-end
systems Business impact:
– RDC has allowed Red Cross Finance team to begin consolidation of COE's into a Shared Service Center
– Consolidation is occurring about a year earlier than originally planned
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RDC Impacts @ the American Red Cross
DDA Accounts:– Pre-RDC: 4,200+– Post-RDC: ~60
Banking Relationships:– Pre-RDC: 300+– Post-RDC: ~13
Time it takes to “apply” donations / funds:
– Pre-RDC: 3 – 5 Days– Post-RDC: 1 day, on average
Other Valuable Benefits– Elimination of trips to the bank, increased volunteer productivity,
data automation, single point of control, better cash management & investing visibility / capability, better application of funds, and more.
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RDC Risk Management
All Bark, No Bite– Actual losses uniquely attributable to RDC have been
minimal.
Compliance & Perceived “Fear” = #1 Issue for FIs
#1 Risk: Duplicate Presentment / Physical Items after deposit.
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Corporate RDC Risk Management “Top Ten”
1. Setup Automated Reports & Alerts
2. Separation of Duties
3. Have a Backup Plan
4. Restrictively Endorse All Items
5. Safekeep all items
6. Destroy all items
7. Implement Positive Pay
8. Choose the “Right” Solution
9. Understand the “Cons”
10.Utilize Duplicate Detection
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The Greenfield OpportunitySmall Business RDC
Christine BarryResearch Director
Aite Group
0
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RDC is a natural fit for small businesses, yet product adoption is below bank expectations
RDC helps small businesses save time, increase convenience, and operate more efficiently
More than 50% of U.S. banks have deployed RDC
Less than 5% of small businesses have adopted it
For most institutions, adoption is below expectations
Source: Aite Group survey of top 50 U.S. Banks, September-October 2011
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Low small-business adoption is not reflective of interest in the product
Source: Aite Group small-business survey, August 2011
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In fact, interest in RDC has grown over the last two years
Source: Aite Group small-business surveys July 2009 and August 2011
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…Small businesses may go elsewhere
Source: Aite Group Small-Business Survey, August 2011
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Small Business: The “Greenfield” Opportunity
There are over 29 Million Small Business Locations in the USA Today. Fewer than 1 Million use RDC Today Mobile RDC will play an increasing Role
– Low Volume, Convenience Play Desktop Integrated RDC will be increasingly
attractive.– Account Reconciliation / Data Application
The ability to accept multiple payment types is increasingly important– A Single Payments & Data processing platform.
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We’ve only just begun…
Fewer than 2 million locations in operation today on Traditional RDC
Checks remain a primary payment method. 2/3 of all $$$ received by businesses are by Check (AFP). Over $32 Trillion was paid by check in 2009 vs. less than $5
Trillion via Cards (Fed Study). There are over 29 Million Small Business locations (Less
than 1 million in operation today) Undeniable business case for both end-users as well as FIs. Over 1 Million Mobile & Consumer RDC Users Integration of Card, ACH, Cash. Document & Data Automation
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The Road Ahead
Remote Deposit Capture is increasingly being used by businesses and corporations as an integrated, value-added technology platform to process all payments and related data, resulting in cashflow acceleration and automated data application.
Mass Adoption Mobile Capture– FIs, Third-Parties & Consumers
Increasing Role of 3rd-Party Solutions– PayPal, Intuit, ISOs, ISVs, AFS (Alternative
Financial Services), etc. RDC as a Payments Platform
– Checks, Cards, ACH, Cash Data Automation, Integration & Risk Management
Contact The Presenter
Steven Vaglio, AAP SVP, EastPay Payments Advisory Services & Marketing
www.EastPay.org800-681-4224
General Information [email protected] Audit and Risk [email protected] Education [email protected]
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