The Future of Consumer RDC: Going Mainstream

by Bob Meara, November 22, 2010
Industry Trends
North America

Abstract

RDC has been a treasury management product offered by financial institutions in exchange for fee revenue. But competitive pressures, growth in self-service channel preferences, and relentless cost reduction demands are vaulting RDC into the consumer mainstream.

Until recently, remote deposit capture (RDC) has been limited to business clients. The past year has seen several hundred financial institutions offer consumer capture using devices they already have, thus eliminating the cost of providing and supporting scanners. RDC thus becomes a viable self-service deposit channel—that is, for consumers with a scanner, a demographic that excludes most US households. What then?

Mobile RDC invites the use of smart phones, either for check image capture alone or as part of a broader mobile banking solution. Both mechanisms will soon be broadly offered by financial institutions and widely used by consumers.

According to a new report featuring results of a Celent survey, The Future of Consumer RDC: Going Mainstream, the number of US financial institutions planning to offer mobile RDC has doubled over the past year. Celent expects interest in mobile RDC to continue to grow because banks face a challenging revenue outlook and mounting cost pressures in the retail channel.

“The real challenge with self-service deposits may be the transformation required as transactions move out of the branch,” says Bob Meara, Senior Analyst with Celent’s Banking Group and author of the report.

“Self-service deposits are at odds with the pervasive cross-selling culture at most banks. Reduced branch traffic presents a sales challenge, but deposit-related foot traffic comes at a significant cost—one that US banks may no longer be able to afford,” he adds. “Mobile RDC may be the best idea yet to hasten the branch transformation we all know to be inevitable.”

Leveraging self-service channels is an established strategy, but not in the realm of check deposits. With consumer RDC, financial institutions have a means to dramatically reduce transactional activity in their branch networks. In addition to looking at adoption motives and barriers, this report analyzes financial institution responses to the FFIEC Guidance on RDC Risk, the consumer RDC solution provider landscape, and risk mitigation tools. The report draws from a survey of 12 solution providers and an online survey that drew responses from 246 financial institutions.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

The Stage Is Set: Enter Compliance RDC

6

RDC Risk and Compliance

9

Small Business RDC

16

 

Small Business RDC Solutions

18

 

Adoption Outlook

23

Desktop TWAIN RDC

27

 

Solution Provider Landscape

27

 

State of Adoption

28

 

Outlook

31

Mobile RDC

33

 

Solution Provider Landscape

33

 

State of Adoption

34

 

Outlook

38

Conclusions

41

Research Methodology

44

Leveraging Celent’s Expertise

46

 

Analyst Access

46

 

Support for Banks

46

 

Support for Vendors

47

Related Celent Research

48

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