The State of Consumer RDC 2011: Mobile Takes Center Stage

by Bob Meara, November 21, 2011
Industry Trends
North America

Abstract

Growth in self-service channel preferences, competitive pressures, and relentless cost reduction demands are vaulting RDC into the consumer mainstream. Mobile RDC is taking center stage, with 80% of surveyed financial institutions planning or considering a solution.

Until recently, remote deposit capture (RDC) has been limited to business clients. The past few years have seen several hundred financial institutions, mostly credit unions, offer consumer capture using devices consumers already own, thus eliminating the cost of providing and supporting scanners. RDC thus becomes a viable self-service deposit channel; that is, for consumers with a scanner, a demographic that excludes most US households. More popular still is mobile RDC. Mobile RDC invites the use of smartphones, running a stand-alone application or as part of a broader mobile banking solution. Both mechanisms will soon be broadly offered by financial institutions and widely used by consumers.

According to a new report featuring results of a Celent survey, The State of Consumer RDC 2011: Mobile Takes Center Stage, the number of US financial institutions planning to offer mobile RDC has doubled over the past year. Celent expects interest in mobile RDC to continue to grow because banks face a challenging revenue outlook and mounting cost pressures in the retail channel, a situation worsened by the Durbin Amendment to the Dodd-Frank Financial Reform and Consumer Protection Act, which took effect in October 2011.

“The real challenge with self-service deposits may be the transformation required as transactions move out of the branch,” says Bob Meara, Senior Analyst with Celent’s Banking group and author of the report.

“Self-service deposits are at odds with the pervasive cross-selling culture at most banks. Reduced branch traffic presents a sales challenge, but deposit-related foot traffic comes at a significant cost—one that US banks may no longer be able to afford,” he adds. “Mobile RDC may be the best idea yet to hasten the branch transformation we all know to be inevitable.”

Leveraging self-service channels is an established strategy, but not in the realm of check deposits. With consumer RDC, financial institutions have a means to dramatically reduce transactional activity in their branch networks. In addition to looking at adoption motives and barriers, this report reviews RDC risk and compliance options, the consumer RDC solution provider landscape, and surveys market opportunity for mobile RDC in the mass market, wealth management, and small business market segments. This report draws from a July survey of 12 solution providers and a September online survey that drew responses from 218 financial institutions.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Erica Ferguson
eferguson@celent.com
Tel.: +1 617 262 8225

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

A Short History of Distributed Capture

7

RDC Risk and Compliance

11

 

Risk Management Tools

14

 

Customer Suitability

19

Small Business RDC

22

Small Business RDC Solutions

25

 

Adoption Outlook

29

Desktop TWAIN RDC

33

 

Solution Provider Landscape

33

 

State of Adoption

35

 

Outlook

38

Mobile RDC

41

 

Solution Provider Landscape

41

 

State of Adoption

42

 

Outlook

46

Conclusions

51

Research Methodology

53

Leveraging Celent’s Expertise

55

 

Analyst Access

55

 

Support for Financial Institutions

55

 

Support for Vendors

56

Related Celent Research

57

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