With a membership that includes more than 250 U.S. embassies around the world, State Department Federal Credit Union is building on its remote reach while eliminating delays and expenses typically associated with international transactions.
The $1.1 billion CU in Alexandria, Va., is using VSoft Corp.'s remote-deposit capture solution to process organizational accounts at embassies in Tunisia, Uzbekistan, Burma and Denmark. The rollout began in late 2008, and its first RDC deployment embarked in the summer of 2009, said Charlie Roberts, chief information officer at SDFCU (CU Times, July 30, 2009). He acknowledged the CU is taking a careful approach to rolling out RDC in other countries.
"So far, it's been a relatively slow release. We're taking it nice and easy and adding one embassy at a time," Roberts said.
Through VSoft's Agile Merchant, SDFCU allows business members to capture check images at their offices and electronically transmit items to the CU. Roberts said the solution reduces float and funds become available sooner as personnel can scan the checks as they receive them. Business members can consolidate their deposits into a single preferred financial institution, averting any geographic dependency, according to VSoft. The goal is to first roll out the solution to its organizational accounts throughout the country and then implement it at state department facilities worldwide. Roberts said using the RDC system has eliminated international courier expenses for SDFCU.
"I think it's a win-win. Overseas, they're able to get their checks deposited faster and don't have to wait for DHL, FedEx or the local postal service," Roberts said. "They get their deposits that day. For us, there's no float involved and we can process immediately."
Even with the convenience of RDC, Roberts said the CU is very careful with the embassies it selects to implement the solution. So far, only those with fairly high check volume are chosen. Founded in 1935, SDFCU has more than 67,000 members, 20% of whom live outside of its home base of Washington. Many of them live and work in other countries. The embassies in the CU's field of membership are staffed by employees, contractors and marine security guards.
Given the international exchanges, the biggest challenge has been communicating with embassies with the myriad of time zone changes, Roberts said. Typical IT issues such as settings adjustments and connection problems have been addressed.
"So far, so good," Roberts said. "We had a few connectivity problems, but we've been able to work through them."
With political, religious and other upheavals going on in certain parts of the world, SDFCU is assured that the U.S. embassies it serves are closed, secured environments on U.S. compounds. When asked about the potential for fraud through RDC, Roberts said that as with any financial institution, the CU takes a proactive approach to preventing it.
"We still do have concerns [about fraud]," Roberts said. "While we have not been able to completely eliminate the risk, we can mitigate the risk."
In order for the organizational accounts to use the RDC, the CU ships the scanner and training CD to the embassies. It takes roughly 20 minutes for the scanner to get up and running, Roberts said. The end user must have a computer that is fully configured, and depending on the availability of IT staff at a particular embassy, "it might take a couple of hours to less than 30 minutes." Plans are in the works to offer RDC to individual members.
This is VSoft's 10th year working with credit unions and corporates, said Jon Reneslacis, director of solutions engineering at the Atlanta-based provider of financial technology solutions. The adoption rate of RDC has been slower (but not at a higher percentage) among CUs compared to banks, he pointed out. He attributed this to business services being a newer offering for the cooperatives. Still, the remote solution may present opportunities for them to be the primary financial institution for small businesses. Rather than offer products piecemeal, he can see how RDC can add to a package of services for its members.
"With all of the pending legislation and opportunities for small business lending, there are a lot of things bubbling on the surface," Reneslacis said. "Credit unions are in a fantastic position to take advantage."