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The State of Remote Deposit Capture (RDC) in 2021

How to pivot your RDC program for the new decade.

June 25, 2020

Remote Deposit Capture (RDC) is a service that allows a user to scan checks and transmit the scanned images and ACH data to a bank for posting and clearing. The basic requirements for an RDC service currently include a PC, an internet connection, a check scanner, and a service provider such as your current bank.

When it comes to banking experiences, consumer expectations have fundamentally changed due to Remote Deposit Capture (RDC). The adoption of this user-friendly fintech platform, though slow between its initial legalization in 2004, has become increasingly widespread since 2009.

As the world economy changes before us due to COVID-19, financial institutions must adapt to customers' diminished office use or work from home conditions. The good news is that remote deposit capture (RDC) is the perfect technology for this endeavor. With a mobile device or equipped check scanner, small businesses and facilities can deposit funds and maintain cash flow from the comfort and safety of their buildings or homes. 

So how can you, as a financial institution, best support your treasury management customers? 

Make RDC accessible 

First and foremost, expand your RDC program, and make it accessible and easy for small businesses to adopt. If we're learning anything from this pandemic, it's the value of empathy in our daily business activities. Many banks are already reducing fees and rates, suspending payments, and offering payroll support. Extend this same courtesy to remote deposit capture. Can you provide leasing options or payment plans for devices if your customers are low on cash flow? Can you ship scanners directly to customers? How about installation and support once the scanner is up and running? 

While some of these services may already be commonplace for your institution, offer your usual and more. People—and customers—remember what you did for them when they were down more than anything else. 

Partner for quality service

Now, you may be saying, "Yes, I'd love to help my customers during this time, but we don't have the bandwidth to do all of this." Financial institutions are incredibly busy with the activities associated with our new normal, and often these RDC tasks aren't something you would manage usually. 

The solution? Ask for help. Find an experienced third-party logistics (3PL) partner that can help you with all these tasks. The right partner will be able to consult with you on the right devices for your customers, procure them, and pack them. They'll also have residential shipping options to accommodate the current remote work situation. Lastly, a partner with check scanning expertise will be able to help walk your customers through installation and any other support questions that come up. Doesn't that sound nice? 

How Remote Deposit Capture (RDC) Can Save Time & Resources

Communicate best practices

Whether you're collaborating with a 3PL partner or flying solo, it's important to prepare your users for onboarding and the process ahead. 

Be helpful and available to your customers. Determine an appropriate cadence for your communications, and then send out announcements and resources that will make RDC onboarding a pain-free experience. Brief your customers in installation best practices, including how to prepare your environment for installation, and common troubleshooting questions and solutions. 

You may also consider putting together webinars for your customers. Once before they receive their devices could be helpful, as well as a live installation webinar or post-installation check-in. 

Align with protocol 

Most importantly, as you're planning and executing this unique RDC transition, regularly consult your audit guidelines and risk management protocol. Are you taking the proper precautions when onboarding customers? Are you keeping track of the data that comes through about usage? 

As much as you want to make this experience easy, quick, and seamless for your customers, individuals with malicious intent see this pandemic as an opportunity for fraud. Continue with your usual safety protocol: Communicate to your customers why this must occur, how they can expedite the process, and when they can realistically expect to have access to remote deposit functions. 

As the worldwide economy adapts to the new normal of COVID-19, it's hard not to consider the ease with which technology allowed us to shift to remote work. Yes, there were some growing pains, but once onboarded, we're virtually in-person. Now is the time to do your part and extend empathy to your greatest asset: Your customers. 

Future Opportunity for Remote Deposit Capture 

Celent senior analyst Bob Meara's analysis in State of Remote Deposit Capture 2017: The Final Stretch claims that banks have been moving too slow in their adoption of RDC technology, and relying too heavily on desktop versions of remote capture. He noted: 

“The ability of remote deposit capture (RDC) to extract, validate, and manage payments information (payment stubs, invoices, etc.) remains unappreciated." 

This under-appreciation, Meara thinks, leaves plenty of room for growth in RDC in small businesses. He does not believe banks will realize the full potential of remote capture until they begin increasing their investment in mobile RDC technology and user experience.

RDC Trends, Issues & Insights, a 2017 study done by RemoteDepositCapture.com, reports that in 2016, small businesses adopted RDC at a rate of 36.4 percent.

The same study surveyed financial institutions, asking whether they made mRDC available to retail consumers, small businesses, and corporations. 100 percent of financial institutions responded that they offer some form of mobile remote deposit capture to retail consumers. Only 29 percent offered mRDC to corporations. Approximately 65 percent of banks are offering small businesses mRDC.

When asked about their plans to expand mRDC offerings, 43 percent of banks said they were focusing their expansion plans on small businesses.

The rapid maturation of RDC technology — combined with the ubiquity of automated clearinghouse system (ACH) deposits, credit and debit cards — has left many in the financial industry wondering about the relevance of paper checks.

The Federal Reserve, in response to this growing concern, has been studying the use of non-cash payments. The report, The Federal Reserve Payments Study: 2017 Annual Supplement, reveals that 17.8 billion commercial checks totaling $28.8 trillion dollars were processed in 2017. At this rate, it’s clear we have a long way to go before checks are obsolete, but certainly with the changes to payment methods worldwide, the industry must keep a watch on this trend.

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