The Other Side of Remote Deposit Capture

By Clint Shank

While remote deposit capture is providing benefits to banks and their corporate depositors alike, the new technology also poses significant operations challenges that, left unchecked, may undermine many of the cost and efficiency gains that bank IP managers are counting on.

First, the ability of tabletop check scanners to accurately read the MICR data on checks is relatively poor. Imagine what an IP operations manager would say to a transport vendor who bragged that his hardware had a less than 5 percent error rate. Can you say, “No thanks?”

Because the MICR read rate is so poor on these tabletop devices, there is a lot of back-end clean up to be done. But guess what? Most banks don’t want their remote capture sites keying data (some don’t even provide the capability to do so). This means that banks unwittingly are creating another, redundant proof-of-deposit operation for themselves.

That will take a big bite out of any business case.

What’s more, with a thick-client implementation of remote deposit capture – where some software resides at the point of capture – there are issues of data security, software upgrades across sites, and the communications infrastructure for transferring captured images and data. Similarly, the code-line and image validation at the point of capture for almost all thick-client implementations (and thin, for that matter), are certainly not up to the standards of existing, centralized item processing centers. This certainly increases the bank’s exposure to fraud.

Additionally, at most banks, importing data captured remotely involves a backdoor to the DDA system, which short circuits the banks’ tried and true controls. And using a backdoor for importing data means a bank could get something into their DDA system that doesn’t belong to them; more exposure. Now, if all of this data went through the same code-line validation at the point of capture that checks go through in a centralized environment, and if the data was imported on the same rails that checks currently go through (no backdoors!), remote deposit capture would be a lot simpler, and pose a lot less exposure to banks.

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