mobile cheque deposit (RDC) interview with Bob Meara, Senior Analyst, Celent

Bob Meara, Senior Analyst Celent , is one of the best experts about RDC via mobile.


1) According to you why 2010 will be the year for RDC ?I wouldn't characterize the situation quite that way. 2010 is turning out to be the year for teller capture in the U.S. after a good many banks and credit unions started by truncating cheques in the back counter as deferred work.As far as commercial/merchant RDC is concerned, many banks remain mired in regulatory concerns. Regulators are fixated on a perceived risk associated with RDC even as 90% of financial institutions have suffered no loss uniquely attributed to RDC. The few that did reported in a September Celent survey that losses have been minimal and not recurring. After a very slow 2009, banks are beginning to return to launching sales and marketing initiatives. That said, a significant untapped market opportunity remains. Beyond that, a handful of banks will be launching RDC initiatives aimed at consumers in addition to business clients. These initiatives will be tightly integrated to existing internet and mobile banking platforms.
2) Is RDC only a USA phenomenon ?Largely so. There are a number of international banks using RDC for US check deposits remotely, but the numbers are small. In our view, RDC beyond the branch infrastructure makes sense when cheques are still in significant usage and where infrastructures are in place to perform electronic clearing and settlement.
3) What about standards ? ANSI ?Interestingly, RDC doesn't rely on broad use of standards. For example, manufacturers of specialized check scanners each utilize proprietary APIs which must be supported by multiple software vendors. The TWAIN standard embraced by document scanners hasn't been historically relevant to RDC, but is becoming so as financial institutions explore solutions for the mass market.
4) What are the technology partners (Mitek, mShift, etc) ?Mitek Systems has carved a nice position for itself in the realm of mobile RDC and had pre-integrated with several of the mobile banking platform vendors. This will make it rather easy for financial institutions to turn on mobile RDC when they are ready.Beyond mobile RDC, multiple vendors provide full turnkey solutions for RDC. Most use image analytics engines from Fiserv, A2iA, Mitek, Parascript, Orbograph or Unisys.
5) How limit the frauds like : physical presentation in another bank? change of amount ? image creation with no physical support ? etc.In the US, original items are no longer required for deposit or clearing. Thus, there is some risk that consumers or businesses may attempt to deposit the same item more than once - potentially at multiple financial institutions. There are a number of mechanisms used to mitigate risk. - Client entitlements. Most banks place restrictions on whom may be authorized to use RDC. Commonly, this involves some longevity with the bank and a clean deposit history with few if any returned items. Other banks apply minimum deposit requirements to minimize risk.- Deposit review. Most RDC implementations leverage image based deposit review workflow. Banks can see deposits in real time as they are scanned and apply balancing checks as well as subject deposited items to fraud detection systems much earlier than when deposits were made in-person at the branch. A growing number of banks apply various deposit limits based on the risk profile of any given customer or account. Deposits may be denied or flagged to back-office operators that exceed predetermined limits. Additionally, systems to flag items where stated and machine read amounts disagree are relatively common. These are used to identify items that may have been altered or deposits attempted that exceed actual check amounts. - Duplicate item detection. The majority of US banks have the capability to detect items that may have been presented more than once - inadvertently or otherwise. In many cases, banks submit deposits to this scrutiny as well as Inclearing items from other collecting banks. The end result is that items deposited more than once will most likely be detected prior to being posted.
6) You are enthusiastic about the strategic move from PayPal, what is your analyse ?PayPal's announcement of a forthcoming ability to deposit checks into PayPal accounts is interesting. It will represent a convenient way for consumers to deposit occasional convenience checks into PayPal. We don't expect that this will result in a wholesale migration of deposits from banks to PayPal however.