Credit unions are playing catch-up to banks when it comes to business deposit products and services. Every national bank and most community banks offer remote-deposit capture services for businesses both large and small. According to CU Business Group's 2010 "Business Deposits Benchmarking Survey," only 8% of credit unions offering business services have remote-deposit capture as part of their package of services. The bar keeps getting raised, and my view is that RDC is now a must for credit unions to effectively compete.
Time is money. Businesses have less time and more demands than ever before, and convenience services like RDC are integral for credit unions to win over new business members. Allowing businesses to scan and deposit checks directly from their location makes working with your credit union easy and cost-effective. RDC also contributes to the green world we live in by saving trips to the credit union. And your frontline tellers won't get bogged down scanning checks while other members wait. The benefits of RDC go on and on for all parties involved.
Expanding your reach. Credit unions can rarely compete with a branch on every corner that most national banks have in place. RDC eliminates this geographic obstacle.
A business looking for the best banking partner will no longer count out your CU based on geography.
Retention is critical today. In addition to becoming more attractive to potential businesses, RDC will soon be demanded by existing business members. In a recent survey, community banks were asked if RDC had helped them retain business clients, and seven out of 10 bankers said yes. Don't let your business members go to a bank for the convenience and benefits of remote-deposit capture.
Fee income. It amazes me the number of ways a bank can charge for one scanned RDC item. I recently helped a credit union review their business member's RDC pricing at a national bank. We found that the bank charged six different fees on account analysis for remote-deposit capture. The credit union should also charge a fee for RDC, but the simplicity and overall low cost credit unions bring to businesses is a major selling point. RDC means fee income to the credit union, which is a valuable commodity nowadays.
Getting the products right. Credit union business programs serve a range of members from those with 1 employee and a few checks a week to those with 100 employees and several hundred checks per week. The best RDC packages cover them all. You need to offer high-speed batch scanners for large volume businesses. A smaller business might be content with a single-feed scanner. The mom and pop business shouldn't have to buy a scanner, they can just use their home printer-scanner. And the professional on the go wants to deposit an occasional check via mobile phone. You don't have to offer all these options on day one, just make sure you have them available from your RDC provider.
The RDC system. There are a wide variety of RDC systems today, from host-integrated software to complete Web-based options. While integrated systems bring obvious benefits, they are often costly and difficult to implement. Web-based applications can offer easier setup and processing for both the business member and the credit union. Be sure to consider the level of technology resources required when choosing the right RDC package for your credit union.
Risk management. Allowing the business to process their own deposits is both a blessing and a curse. You must build in controls to manage risks such as fraud, duplicate items, collected funds and rejects. Who performs reviews of these items and makes the pay or reject judgment calls? Your RDC system should have built-in controls to manage many of the risk areas. Then either the credit union or your vendor must perform risk reviews on a daily basis as items are scanned and deposited. As you set up your program, be sure to consider the staffing and expertise needed to effectively manage RDC risks.
Rolling it out. Staff training and in-branch marketing are very important considerations as the RDC package is implemented. Credit union branch and business development staff are key in effectively presenting RDC to current and prospective business members. So, who trains the credit union staff? Which area of the credit union is responsible for RDC? How does RDC fit in the credit union's marketing plan? Ideally your credit union will get excellent guidance and support from the RDC vendor-so beware of companies that just sell RDC software, as your workload can be immense in rolling out the new program.
Keeping it all working. Having technical support readily available is imperative for a successful RDC program. Your business members will have questions and problems. Who will provide the tech support to them? That is a big learning curve for credit union staff, so look for lots of vendor support here.
Some of us remember when online banking and debit cards were nice-to-have products. Can you imagine not offering them in this day and age? My prediction is that within five years we will look at remote-deposit capture and wonder how we ever got by not offering it.
Larry Middleman is president/CEO of CU Business Group. He can be reached at 866-484-2876 or