About one-third of the U.S. population will use mobile remotedeposit capture by 2016, according to a new study by technologyresearch and consulting firm Celent, which found that four trendsare shaping the future of the technology.

|

Celent surveyed 10 RDC vendors and 78 U.S. financialinstitutions – 13% of which were credit unions – in April for its“State of Remote Deposit Capture 2015: Mobile Is the New Scanner”report. More than 70% said they have either implemented or haveplans to implement RDC in the next year.

|

Celent reported four trends in the RDC market space:

|

1. Product launches are exploding. Carefullycontrolled pilots have given way to now-available products andspecial focus on new sectors, Celent found. Today it is largely aconsumer and small business product, but many vendors launchedcommercial mobile RDC solutions in the past six months, itsaid.

|

“Microbusinesses, those with revenues of US$1 million and less,remain underserved,” the report added. “Lacking a well-designedproduct to meet their needs, many microbusinesses are usingconsumer desktop and (mobile) RDC products. As a result, the smallbusiness segment remains the least developed.”

|

Just 11% to 15% of were using RDC over the past three years, butthat's expected that to rise to about 25% within a few years,according to Celent, as marketing efforts rise, prices fall,eligibility expands and deposit limits rise.

|

2. Risk and compliance fears are settling. Theyonce dominated the agenda, but because RDC-related losses are at orbelow established thresholds, “a significant and growing number ofbanks are actually behaving as if they want customers to depositdigitally,” the report said.

|

Until 2013, nearly 90% of surveyed institutions reportedsuffering no losses from RDC; that number is now just 67%.Institutions with more than $50 billion in assets had the highestincident of loss, the report said. Still, two-thirds of financialinstitutions surveyed said their losses were less than establishedthresholds, according to the report. Fewer losses are due toduplicate presentments; fraudulent or altered items are now on therise, the study said.

|

Deposit limits are a common way to mitigate the risk, Celentsaid, but the technology is quickly moving toward better detectionof duplicates and deposit analysis.

|

|

3. Multiple-image capture is the new black. RDCofferings are moving from separate solutions to common platformsthat support scanning multiple checks.

|

“This development will spawn a renaissance in small business RDCpreviously hampered by complexity, high product cost and resultingpricing,” Celent said. “Mobile is the new scanner. Reflecting boththe explosion in preference for all things mobile as well as theextraordinary convenience of mobile RDC, mobile check image captureusers now outnumber those using specialized desktop devices by morethan 40 to one, despite the roughly 10-year head start enjoyed bydesktop applications.”

|

4. RDC will become a way to reload debit cards.This will require third-party check guarantee services and couldinvolve use of real-time funds as a source of incrementalrevenue.

|

There will be casualties as mobile RDC rises, Celent warned.Financial institutions will likely begin shunning investments inimage ATMs as a result of the growth in mobile RDC, for example.And the fragmented vendor landscape is ripe for consolidation asmore financial institutions consolidate their applications, makingone-stop-shop vendors the ones most likely to survive, Celentsaid.

|

The percentage of surveyed financial institutions consideringchanging vendors increased from 9% in 2012 to 21% in 2015, Celentfound, and the number of institutions with specific plans to do soin the next one to three years rose sharply from 8% in 2012 to 9%in 2015.

|

But branches could be big beneficiaries, according toCelent.

|

“In the consumer mass market, mobile RDC's potential is far fromrealized,” Celent said. “Beyond a mobile banking feature, mobileRDC, if done well, can become a mass market deposit-gatheringchannel. This is exactly what most retail banks need, because in sodoing, they can migrate branch-based transactions to digitalchannels, freeing the branch channel to transform into the salesand service platform it must become.”

|

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

  • Critical CUTimes.com information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including Law.com and GlobeSt.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.