Embed Size (px)
Citation preview
Imaging for Profitability and Efficiency
Sarah Canepa Bang, CEOFinancial Service Centers Cooperative, Inc.
Kim Hester, EVPCo-Op Financial Services
Jeff Swinford, Payment Systems Operations Manager
Wescorp
Introduction
• Front end image capture is here– Branch– Teller– Merchant– Home– ATM– Kiosk
The Need for Capture
•Cost Reduction
•Process Streamlining
•Convenience for Members
•Better/Consistent service For Members
Opportunities in Capture
• Merchant Capture - 67% of retail banks (89% of commercial banks) have implemented or have an (Remote Deposit Capture) RDC pilot program in place. Celent Mar 08
• Checks are the lifeblood of Small Micro Businesses (SMB) – checks represent 85-100% of receivables for 41% of SMBs and 70% of receivables for two thirds of SMBs. Celent Jun 07
Opportunities in Capture
• Merchant Capture – About Half of SMBs receive less than 3 checks a day and on average they are making one trip a week to the bank to make the deposits. “Desk Float”
• Larger SMBs see more checks per day –
• Consumer RDC may be the answer.
Opportunities in Capture
• Consumer RDC – 90% of teller transactions are check related Celent
Dec 2007
– 25% of all checks written in 2006 (7.2 bil) were received by consumers . Fed Reserve Payment Study 2007
• The case is especially relevant to CUs– Pennies per deposit– Makes deposits easier– Grow deposits
Early CU Adopters
• Digital FCUMA Mar 08 16,000• Sharon CU MA Nov 07 2,000• Hanscom CU MA Nov 07 1,200• Service CU NH Dec 07 4,500• Randolph B TX Spring 08 N/A• Star One CU CA Jun 08 N/A
Results• No evidence of fraud unique to channel• Favorable reduction in branch traffic• Lower processing costs than branch deposits• Exception rates similar to branch deposits
• Good user experience– Helps to have intuitive user interface, decent
image analytics, support staff with personal experience. Celent Sep 08
Results Digital FCU
• Goals – Increase percent of members relying on DCU for PFI relationship
• Reduce cost of remote deposits• Integrated with online banking platform, using
shared branch platform for back end integration to accounts
• Thorough automated deposit review
DCU Results
• 3,000 members signed up in the first two weeks –based solely on an Internet link• 16,000 users with first five months
(10% of their online user base)• Zero fraud; zero losses
Issues to consider
• Low cost• Easy to Support• Simple SIMPLE user interface• TWAIN scanner support
Opportunities for ATM/Kiosks
• B of A – In 2008 began replacing existing machines with
image capable ATMs – currently at 5,800, by 2010 plan to have 13,000 of their 18,000 ATMs image capable
• 7-Elevens Vcoms• Branch Automation
Applications and Vendors
Branch Capture• Tried and True• Most common application• Least expensive entry point
• Considerations– In house software versus ASP model?– Adjustments at point of capture or remote location?– Handling on us items
Teller Capture• Branch capture at the teller line• Items captured as part of deposit• End of day balancing is streamlined • Possible interface with a fraud solution
• Considerations– More expensive– Compare costs to increased efficiencies– Items indexed to core system– Images available through home banking– Future of checks?
Merchant Capture
• Capture process at the end user (the merchant location)• Costs are shifted to merchant• Benefit: no branch visits
• Considerations– CU maintains responsibility– Business rules– Exceptions– Posting transactions
Home Capture
• Scan item at home to deposit to account• Same contractual issues
• Considerations– Some products require additional infrastructure– Back office bundling versus cash letter directly to Fed.– Member send or keep/destroy original item– Settlement occurs once item is received (Image versus
original item)– On line solution
ATM/Kiosk Image Capture
• Convert deposited items to images at ATM’s• Eliminates daily service• Big savings for the credit union
• Considerations– All new technology– Some tangible success stories– ATM upgrades (software and hardware)– ROI
Now What? Confused yet?
Branch, Teller, Merchant, Home, ATM/Kiosk (and yes, even phone)
Can all of these capture points reside on one platform with one settlement point?
How do you choose which option to go to?
What should I be looking for?
How do I know that I am choosing the right solution?
Choosing the Right Solution
• Things to consider:– Settlement– Archiving– Day Two Processing (returns, adjustments, etc.)
These are all back office type processes that must be considered
– Pricing – Hidden Costs?
Things to Consider
• Settlement– Availability of Funds – 100% immediate or other– Compensating Balance – what is required and is it
interest bearing– Account type – how are the funds settled? • Do you have to manually move funds to gain earnings?
Things to Consider
• Archiving– How long are your items available online– How long are they archived– Can your members access deposited images via
online banking– Moving to a different solution – does everything
move with you– Multiple capture points – are they all settled and
archived together or different platforms
Things to Consider
• Day Two Processing– How do you receive your return items– How are they processed – do you have dedicated
staff– Who is working the adjustments – staff or your
provider– Adjustments on the books – you give your
member immediate credit, right?
Things to Consider• Pricing
– Investment• Cost of software or license• Hardware (scanners, servers)• Annual Maintenance
– Daily Processing• Processing or per click fees at the front-end (is there a per file or batch
fee?)• Archiving Costs• Clearing costs
– Day Two• Costs to handle adjustments and other day two items
– Vendor Support• Call Center support when issues arrive
Questions you should ask…• How long have they been doing capture?• Do they have item processing experience, or is this just a
secondary add-on product?• How many installations? References?• Focus – Credit Union’s or Banks?• Interfaces with your core system, image solutions, points of
settlement, etc. that you already invested in.• Will they listen to your needs or force sell on you what they
have now?• Are they open to helping you understand the full end-to-end
cost in deploying these types of solutions?
