Academic journal article ABA Banking Journal

Remote Deposit Capture: Making the Promise Pay Off

Academic journal article ABA Banking Journal

Remote Deposit Capture: Making the Promise Pay Off

Article excerpt

Back in late 2005, Gordon Coleman, awaiting regulatory approval of his Patriot Federal Bank's charter, found himself and another senior officer of the fledgling savings institution in a seminar about Check 21. Along the way, he recalls, the speaker touched on the then new concept of remote deposit capture.


"That's for us!" the veteran banker said to his colleague. And within a year after opening its doors, the $34 million-assets bank, in Canajoharie, N.Y., began offering remote deposit capture into its customers.

Once a bustling stop for the passenger boats on the Erie Canal and now right off Interstate 90, Canajoharie remains a competitive market. Offering customers a depository "on-ramp" onto the new thoroughfare, the information superhighway, is a plus. Coleman says offering remote capture helped the bank attract the business of several larger commercial companies, including a manufacturer, a trucking company, and a big lumberyard, as well as professional offices.

While remote capture helped this young institution get off the ground, the service has meant good business, as well, to the much larger Bank of Blue Valley, in Overland Park, Kan., part of the Kansas City, Mo., metropolitan area.

Being one of the RDC pioneers in the metro market helped, says Bob Regnier, president and CEO of the $715 million-assets bank. But he thinks one of Bank of Blue Valley's advantages, beyond the technology, is the people who sell the service. While RDC is "owned" by the deposit function at Patriot Federal, a smaller institution--at Bank of Blue Valley remote capture is part of the treasury and cash management product suite.

Regnier (pronounced "Ray-neer") says that his employees have helped make remote capture fly at his bank because they can help customers work their way through equipment and software issues and handhold them until they feel comfortable with the service. Already, the service has been a tremendous customer retention tool, on top of the new business accounts it has brought in.

Case in point is a very important client, a consulting firm, that centralized its operations in Denver, Colo., a few years ago, but, because of the bank's strong customer service, maintained its relationship with Bank of Blue Valley.

An awkward point was getting deposits into the consulting firm's account. In its business, it tends to receive very large checks. These were going to the bank via express services. And then Bank of Blue Valley introduced remote capture about 18 months ago. The bank flew out one of Regnier's young experts and the firm took to it quickly.

"That product really helped solidify that relationship," says Regnier.

The experiences of these two banks underscore a key finding of the remote capture section of this year's survey: community bank competitiveness through technology is as much about the results as it is about the technology.

That's why some of the key findings regarding results are set off in boxes. On page $11, for instance, there is the box, "RDC Results: A strategic look," that examines the overall payoffs that banks have seen from offering remote capture service. There, we present what they told us about overall profitability, new business generated, repeat business retained, and more.

On pages S14-15, by contrast, we drill down. In the box, "RDC Results: By the numbers, "the tables spanning the bottom of those pages get at some hard numbers, and present averages and medians for all institutions reporting, and by asset size, for four key measures. If you are offering remote capture, compare your fourth-quarter 2007 customer numbers to these exhibits.

Of course, results don't produce themselves, and for those just considering remote capture, or those tinkering with their present offerings, this section provides data regarding how banks are structuring their remote capture programs; how they charge for the service; and how they market the programs. …

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