Remote Deposit Capture for Consumers
I wrote earlier about remote deposit capture (”RDC”) being a popular outcome of Check21. RDC is a process where commercial bank clients scan and transmit their cheques to be deposited into their bank. My point at the time was that, despite the spirit of Check21 being one of efficiency and cost reduction, RDC is a revenue play when you figure that it allows a bank to acquire new customers outside of its geographical footprint.
I was wondering how you might extend RDC to regular consumers. Turns out USAA has already done this. Customers scan the cheques they receive and send the images over the internet. They can then void and/or destroy the original cheques. There are the usual risks of RDC (for example, duplicate deposits) but with the military relationship, I suppose USAA has a pretty good “know your client” sense (besides technology which can be used to manage such risks). I assume that USAA will in turn either exchange the images with image exchange participating paying banks or generate IRD’s for clearing the items.
From a cost perspective, if there is a business case for branch image capture, one could assume that the business case would be even better for consumer RDC (let’s call it “CRDC” and see if the meme takes off). However, I think the bigger thing here is enlarging a bank’s market and reach for retail banking products and services. Internet or “virtual” banks can theoretically acquire and service customers anywhere. The slickness of this approach breaks down when it comes to things like depositing a cheque, which is still not an uncommon occurrence. Usually you are reduced to finding a supported ATM network (sometimes unlikely), or mailing the cheque into the bank. Consumer RDC solves this. Not only internet/virtual banks, but even traditional banks could acquire new clients outside their traditional geographic boundaries.
