ABA Banking Journal - April 2007 - (Page 24)
Community Banking Exhibit 1 Since the original survey, how has competition changed? We remain the only RDC entrant More large institutions joined us, no community banks 11.5% 7.7% 3.8% Both community and large banks joined us 65.4% More community banks joined us, no large players Other Exhibit 2 Has your bank successfully reached out of its usual markets for RDC customers? Exhibit 3 If yes, are these signups located 11.5% Both in-state and out-of-state 28.6% Yes 53.8% No 46.2% 7.1% Out-of -state only In-state only 64.3% finding various solutions for the need to get cash taken care of. The bank has 22 customers currently on board for remote capture and hopes to double that in 2007. The only dark spot on the horizon with remote capture is that other institutions have definitely caught on, notably larger banks. Remote capture is booming These banks represent only two entries in a growing crowd. Among bankers, vendors, and observers of the banking scene, labels describing the growth of this technology each reach higher than the other. “It’s wildfire,” says the state bankers association president of a southern state, where many institutions are offering, or planning to offer, the service. “It’s crazy! The noise we’re hearing is pretty huge,” says Chuck Doherty, vicepresident and business manager for remote capture products at Fiserv. “RDC is exploding,” says Dave Reim, product manager for the image payment technology group at Open Solutions. “It wouldn’t surprise me if sometime next year, remote capture will be a commodity. “This is the beginning of the end for checks,” says Reim, a veteran in item processing, In time, especially as the advent of back-office conversion of checks at the retail point of sale into ACH items begins to engage, the check’s eclipse will hasten even further. The 2007 edition of the Community 24 APRIL 2007/ABA BANKING JOURNAL Bank Competitiveness Survey, produced by ABA’s Community Bankers Council and ABA Banking Journal, featured extensive research concerning remote capture adoption among community banks. The survey, based on research conducted last fall, found that remote capture had shot to the top of community bank spending priorities. The survey further found that 16.3% of the 590 responding banks offer remote capture, while 33.3% plan to in 2007, and 8.7% more plan to further on. Indications are that even those measures may be conservative. (A similar study among a somewhat different group of community institutions, by Grant Thornton, found that 26% currently offer remote capture.) The ABA survey found that remote capture attracts new clients—64.5% of the sample said they had, and helps retain clients—59.6% said they had. “Virtually every core system RFP we see nowadays includes questions about our ability to support merchant capture,” says Tom Berdan, vice-president, product management, in the core systems group at Harland Financial Solutions. Yet the surveys indicated that there are banks that aren’t getting into remote capture. Speculating on their lack of interest, Charles E. Potts, senior vice-president, business development, at Goldleaf Financial Solutions, Inc., says some don’t see demand in their markets—this was cited by 43.6% of the banks not offering remote capture, in the Competitiveness Survey. However, Potts suspects that some bankers simply haven’t recognized the risks of not moving into this service: “Some banks don’t believe their commercial customers are going to get poached.” Such institutions, Potts suggests, will find themselves in major-league recovery mode when larger competitors weigh into their customer bases with an attractive remote capture package. Trends in remote capture The Competitiveness Survey can be reviewed in full online at www.ababj.com. The charts accompanying this article come from a recent follow-up survey conducted among those banks that reported offering remote capture. The original and follow-up surveys, interviews with bankers, and interviews with vendors, indicate the following trends: ® The time of the pioneers is already at the beginning of its end—maybe even the middle. This is truly one of those “don’t blink or you’ll miss it” trends. As Exhibit 1, p. 24 shows, the competitive space is filling fast, and frequently with both large and small players. The costs of being a player in remote capture have been steadily falling, according to Joseph D. Lockwood, senior vice-president and chief technology officer at COCC, a northeastern and central states bank data processing provider. Decreasing costs have been making it much more practical for community banks with fewer players to step onto www.ababj.com/subscribe.html
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