Publications & Resources

September/October 2008
Focus: Technology

Remote Deposit Capture: What’s Your Target Market?

By Shawn Kruger

A recent report from Celent, “State of Remote Deposit Capture: Entering the Mainstream,” indicates that more than one third of the financial institutions in the United States have adopted remote deposit capture technology and up to 50 percent planned to have done so by the end of 2007.1 The technology adoption rate has exceeded any prior item processing advancement in the past several decades.

But who is using remote deposit capture to change the way deposits are made today? It appears that very few businesses have actually adopted the technology, with less than 2 percent signing up. According to Bob Meara, author of the report and senior analyst in the banking group at Celent, many banks are just getting started with remote deposit capture and have not yet seen the growing competition for clients that is heating up.2

What’s your plan for growing deposit volume, strengthening client relationships and expanding your commercial client base with remote deposit capture? Have you identified which businesses are the optimal targets for remote deposit capture? By segmenting your market and defining your priorities regarding client retention, capturing new clients and growing deposit volume, you can focus your resources to more effectively grow your remote deposit capture users.

Where to begin? Start with an assessment of your current commercial clients, dividing them into four segments: 

  • High dollar deposits with high volume
  • High dollar deposits with low volume
  • Low dollar deposits with high volume
  • Low dollar deposits with low volume

Each of these segments has a different risk model and value proposition for adopting remote deposit capture that will affect your ability to roll out the technology to those businesses. The fourth segment, low dollar deposits with low volume, will typically have minimal interest in remote deposit capture because there is very little payback or value to their day-to-day operations.

Conversely, businesses with high dollar deposits and/or high volume will benefit from improved cash flow, reduced time and resources to prepare deposits, more convenient deposit hours, enhanced deposit reporting and research capabilities and fewer deposit errors due to automated balancing. In addition, the high volume segments – both low and high dollar deposits – may benefit from a centralized view of deposits from multiple locations. 

By identifying these commercial accounts and prioritizing them in the sales effort, you are creating a “stickier” relationship with the clients. You’re helping to reduce the time branch personnel spend supporting their incoming deposits and enabling those resources to focus on growing consumer deposit and lending relationships. You’re also potentially growing the deposit volume from these clients because you’ve enabled them to consolidate their banking relationships by eliminating geographic constraints. This same market segmentation can be applied to identify and prioritize new client opportunities that remote deposit capture enables your financial institution to pursue.

   

1 State of Remote Deposit Capture: Entering the Mainstream, published June 4, 2007, by Celent.

2 Excerpted from the Celent report abstract “State of Remote Deposit Capture: Entering the Mainstream” on www.celent.com.

Shawn Kruger is director, business development, with the Imaged Payment Technologies Group of Open Solutions Inc. Based in Dallas, Kruger can be reached at 972-899-1654 or shawn.kruger@opensolutions.com.

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