Remote deposit capture, long tied to the PC and desktop scanner,has arrived at its ultimate destination – anywhere, anytime checkdeposits through popular mobile banking capabilities andsmartphones.

Mobile deposit is attractive to consumers and millions of smallbusinesses, a longtime staple of credit union membership. Bycombining powerful technology trends and strong consumer demandwith a traditional banking process, mobile deposit empowers creditunions with another way to retain members, prevent thefragmentation of members' banking relationships and, ultimately,forever change the credit union's relationship with itsmembers.

Mobile Deposit Combines Traditional and MobileBanking

For generations, the paper check was by far the most commonlyused non-cash payment method for businesses and consumers alike. Inrecent years, most of the conversation around checks has been abouttheir impending demise as consumers embraced cards, online bankingand, more recently, smartphones and tablet apps for their bankingneeds.

Despite the rush to mobile banking, checks are not going away.Fiserv research shows that four out of five financial institutionsoffer RDC services and more than 40% of banking customers wouldchange their financial institution to get mobile RDC. This mobileimaging technology is tied directly to a venerable symbol oftraditional financial transactions, the paper check.

Even though credit, debit and prepaid cards receive most of theattention, checks are still an essential part of our paymentsystem, representing about one-fifth of all non-cash payments andnearly half the total value of non-cash payments. This amounted tomore than $30 trillion in payments in 2010, according to theFederal Reserve. This high level of check-writing activity can beattributed mostly to business-to-business transactions.

Powerful Technology Trends to ImproveService

In every area of their business, credit unions must find ways toprovide more and better service while reducing operating costs. Newtechnologies have always been the answer to that challenge, andduring the last few years, mobile RDC has been in thespotlight.

A 2012 Javelin report found that mobile check deposits can costthe credit union as little as four cents per check, whiletraditional branch-based deposits cost between 75 cents and threedollars per deposit. Credit unions will soon be able to monetizemobile RDC capabilities, especially for small business customers,and may even be equipped to provide value-added reporting todetermine mobile deposit's true return on investment.

For credit unions looking to provide valuable customer servicethat simultaneously improves operational efficiencies, mobiledeposit is a game changer.

For many years, RDC has enabled merchants, corporations andconsumers to capture check images and make deposits using scannersand PCs, but advances in smartphone development and the advent oftablet banking have introduced millions of new banking devices tothe marketplace. These devices are smaller and more portable,enabling credit union members to maintain their bankingrelationships anytime, anywhere –with just a pocket-sizeddevice.

Representing the intersection of two very powerful bankingtrends – mobile banking and remote deposit capture – mobile depositoffers a cutting-edge way to manage a very traditional bankingprocess.

Credit Unions Are Poised to Lead in Mobile DepositAdoption

Small businesses still write and receive millions of checks eachyear, making this market a significant and lucrative opportunity inwhich to expand mobile deposit services. Many businesses do not yetuse RDC services of any kind but the near-universal presence ofsmartphones, and their proficiency as a deposit device, suggeststhat credit unions should move quickly to take advantage of thisopening to pursue more widespread mobile deposit adoption.

Credit unions leading the way in mobile deposit typicallydeliver their services to on-the-go service businesses, such ashome repair providers, babysitters, landscapers and cateringcompanies. Many receptive members also have needs tied tomicrobusinesses or small nonprofit venture, such as a sports team,church group or garage sale.

Optimizing Mobile Deposit Security

It's only natural for credit unions to be concerned about fraudpotential when considering new technology. Credit unions mustcarefully consider any possible risks and strategically implementall necessary precautions.

The good news is that fraud losses related to remote deposit areremarkably low, with more than 90% of institutions suffering nolosses attributable to merchant, consumer and mobile remotedeposit. Careful risk mitigation will include several keycommon-sense practices, including:

• Eligibility restrictions: Many credit unionsrestrict mobile deposit eligibility to established customers withan existing six- to 12-month relationship with the creditunion.
• Impose deposit limits: Restrict access bylimiting daily mobile deposits, many credit unions limit depositsto $5,000.
• Monitor members' behavior: Carefully trackchanges in deposit behavior, flag atypical amounts and monitordiscrepancies in trends.
• Detect duplicate deposits: Robust systems canidentify a duplicate across capture channels, including mobile andbranch.

Any comprehensive mobile banking portfolio must include mobiledeposit capabilities because mobile deposit offers a high degree of“stickiness” – the capabilities help build member loyalty and boostretention. To serve its members and small businesses alike, creditunions must offer mobile RDC now, because other unregulated,non-financial firms already do.

Although large banks have generated much of the buzz around thisnew technology, there are no barriers to adoption by credit unions.A credit union that takes advantage of its unique market positionto increase mobile deposit integration will reap the rewards ofincreased member retention, continued deposit growth andtransformed relationships with its members.

No longer content to use mobile banking to simply getinformation, consumers and small businesses are now looking tocomplete the same tasks and transactions they once performed onlyat a branch or online. Credit unions that deliver thesecapabilities, including mobile deposit integration, will gain aclear advantage.

Gary Brand isdirector, Source Capture Solutions, for Fiserv Inc.in Brookfield, Wis.