Adoption of commercial remote-deposit capture, which refers to business customer-specific RDC solutions, grew by just 10% in 2011 while mobile RDC has become a priority for U.S. financial institutions and vendors, said a new Celent report, “State of Remote Deposit Capture 2011: Signs of a Maturing Market.”
According to Celent, financial institutions added a mediocre 65,000 commercial RDC clients this year. By the end of 2011, nearly 7,100 financial institutions will offer at least one commercial RDC solution and have an estimated aggregate 755,000 commercial RDC users or scanners, the firm said.
“With the low hanging fruit already picked, new client RDC sales have been more difficult,” said Bob Meara, the report’s author and a senior analyst for Celent’s banking group. “The business case for RDC among commercial clients has been hammered by the low interest rates that simultaneously produced a de facto price increase through sharply lower earnings credit.”
Celent identifies three key commercial RDC trends from 2011: mobile RDC is at the forefront of financial institutions’ and vendors’ minds, which will lead to a surge in new mobile RDC product launches; financial institutions have mastered RDC compliance, which allows more room to focus on product launches and sales; and commercial RDC adoption has slowed to a crawl.
Large and small institutions have taken increasingly different paths in their approaches to RDC, Celent said. Many credit unions with $1 billion or less in assets have no plans to offer commercial RDC, while large banks are more likely than smaller institutions to offer multiple RDC solutions from multiple vendors and launch mobile RDC.
Compared to smaller institutions, large banks are also more satisfied with their compliance and risk procedures than with their vendors’ capabilities. They’re also focusing more on product launches than compliance, are more likely to charge for RDC scanners and are less capable of detecting duplicate deposits across channels, Celent said.
“There have always been significant differences between how smaller financial institutions and large banks approached RDC,” Meara said. “But, Celent observes a widening gap in both attitudes and action as it relates to RDC.”
Celent found most RDC client growth has taken place at institutions with average scanner deployment numbers that grew from 97 to 106. Additionally, vendors are integrating RDC solutions into existing applications, bringing more benefits to users and growing interest from institutions.
The firm also saw a movement into the small business market this year, driven by RDC solutions that allow small business owners to use existing scanning equipment and specialized check scanners, and foresees increased activity in this realm over the next two years.
About half of financial institutions are considering utilizing TWAIN-compliant RDC scanners, Celent said, which will “allow a step change downward in solution cost (and in turn, pricing) that will, finally, make RDC broadly viable for small/microbusiness and consumer segments.”
But mobile RDC’s popularity will be the true driving factor in small business customer adoption.