ORLANDO, Fla. – The steady decline in the number of checks used as a form of retail non-cash payment and the continuing increase in the number of non-check payment transactions in credit and debit cards and ACH, have become a fact of life for the financial services industry. But checks will not go away completely and are contributing to the movement toward remote deposit capture. Can remote deposit capture work for the retail bank? Yes, concluded Royce Brown, president, NetDeposit Inc., and Elizabeth Lee, Team Lead, SVP, Bank of America Global Treasury Services for Bank of America who spoke on the issue at the BAI Retail Delivery Conference. But they emphasized that for that to happen, the remote deposit capture marketplace needs to be looked at differently than the cash management market, and there are unique issues that need to be addressed including marketing, packaging, pricing and support. According to Brown, NetDeposit expects to see an over 500% annual growth in remote deposit through 2008. Already projecting through 2006, the company projects it will handle 214 million remote deposit items. That's up from 532,000 it handled in 2004. The bulk of that growth, said Brown, is from small businesses. In fact, said Brown, "business depository accounts will continue to drive more revenue than loans for medium and small business customers." He added though, that while there are many small business opportunities, "you must target the segments that are most likely to benefit from remote deposit capture." To select a target market, Brown suggests financials consider the size of the market, whether checks are a regular form of payment, and if the check amounts are meaningful. Some small businesses to consider are property management, rental services, accountants/tax preparation, automobile services, doctors/dentists, and automobile dealers. What about focusing on opportunities with the retail customer? Brown said this market will be more challenging because of the high cost of the imaging hardware and software. Lee agreed that the projected declining check volume and the availability of ARC and other check conversion options are major drivers in the distributed capture strategy. "So are consumer demand for products that help them in deposit preparation and delivery, the collection of payment, the reduction of returns and the overall improvement of cash management," she added. While recognizing the opportunities, Lee emphasized banks need to also prepare to deal with technology, implementation and software costs and support issues – can your customer support center handle the increase in calls? Are you prepared to handle hardware issues? Will the technical skills of the customer create issues? Can issues be resolved quickly to prevent frustration? "You still have checks to deal with, but the question is what is the most effective and cost efficient way to deal with them," she said. -

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