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Copyright © 2005 Carreker Corporation. All Rights Reserved. Remote Deposit Capture Webinar February 1, 2007 Laura Fahey & Gary Brand Remote Deposit Capture Webinar February 1, 2007 Laura Fahey & Gary Brand 2 Agenda Commonly asked questions about Remote Capture
Some things to consider when choosing your solution
A peak at Carreker’s Web Capture Thanks for joining us! 3 Laura Fahey Source Capture Program Director 704-602-5283 lfahey@carreker.com Gary Brand Partner Program Director 972-672-9872 gbrand@carreker.com Your hosts today are: Email us to request
copies of this
presentation 4 Why Remote Deposit Capture? Benefits of Remote Deposit Capture 5 Banks traditionally think about: Accelerated cash flow
Lowering the cost to process checks • Transportation • Sorters, proof machines, and their operators More deposits, more fees Benefits of Remote Deposit Capture 6 But mainly, It’s all about client demand Benefits of Remote Deposit Capture 7 Remote Deposit Services – Who are the Typical Clients? Property Managers
Brokerage Firms
Charities
Government offices
Utilities
Construction Management
Medical Offices
Merchants Businesses with multiple locations
Often outside your traditional geography
Used multiple banks for deposit services, desire consolidation 8 BAI Research Survey • Survey of 1000 small/midsize ($5M-$10M)
businesses • Majority feel underserved by their banks,
particularly in the payments area • Half of these businesses said they were likely or
very likely to switch banks to get better payment
services • 10-25% are using or plan to use check imaging at
the point-of-sale or in the back office Customer Retention – smaller clients 9 Back Office Conversion legislation goes into effect March 16
BOC allows merchants to convert eligible checks to ACH
transactions • Meta Software did case study of retail department store • They found that BOC: − Could reduce retailer’s bank fees by 97% − Could improve access to funds by 54% − Could reduce losses from returned items by 20% -> Projected annual benefit $4.4 million enterprise wide BOC Impact? Big time for Merchants 10 ACH conversions have been around for a while under Point of Presentment (POP) rules
But with POP • Needed a scanner at every cash register • Because the cashier had to give the checks back to the consumer With BOC • Don’t give the check back to the consumer as with POP − Less confusing for the consumer -> faster checkouts − Less training for cashiers • Don’t have to scan checks at cash registers − Install one scanner in back room − Much less hardware cost than with POP offerings Thus, BOC is expected to greatly accelerate RDC, especially with large merchants BOC will accelerate RDC adoption 11 We’re at the “knee of the curve” 2005 2006 2007 2009 2010 2011 2012 2004 # Remote Capture Seats (all types) 2008 Image Exchange surpasses IRDs (projected) 30,000+ ACH BOC Rules become effective Rapid acceleration with ASPs prevailing, BOC acceptance, branch & ATM rollouts and placement in indirect channels 12 Benefits What type of benefits should Merchant and Corporate clients expect? 13 For the Corporate Client, it’s about: Saving Time Saving Travel or Courier Costs Improving Funds Availability Lowering Fees Better Deposit Management Benefits of Corporate/Merchant Capture 14 What are the costs associated with Remote Deposit Capture? Costs 15 Bank • IT implementation (if hosting themselves) − Server and network upgrades − Vendor and prereq software − Interface to legacy payment infrastructure − Interface to bank web portal • Establishing marketing/sales/support
infrastructures • Qualifying clients and establishing sound RDC
contracts Costs -> Corporate/Merchant Capture 16 Merchant or Corporate Customer • Scanner, PC − Some banks give this away • Scanner maintenance • Bank fees, upfront and ongoing Costs -> Corporate/Merchant Capture 17 Are there any hidden costs that Financial Institutions need to be mindful of? Hidden Costs 18 Bank • Application “glue” • Back-end consolidation harder than anticipated • Duplicate control • “Thick” application installation support and
maintenance RDC End Users • Controlling/disposing deposited paper checks Hidden Costs 19 Should I be concerned about scanner fulfillment and maintenance? Scanner Considerations 20 More than just “Fulfillment” • Ordering and inventories • Tracking Final Certification • Integration testing • Integrated packaging End User Installation support and training
Maintenance and support • Level 1 support • Standard depot repair vs. immediate swap-outs • Back-up devices • Tracking maintenance renewals Scanner Considerations 21 Is it better to host a Remote Deposit Capture solutions yourself, or get the service via an ASP offering? Hosted vs. ASP? 22 Hosting considerations • What is your bank’s IT capability and availability? • How much customization and flexibility does your bank require? − Less customization quick implementation • Is your infrastructure Check 21 ready? Typically hosting takes a little more upfront time and cost • But your ongoing costs will be lower and you will have higher
flexibility Hosted vs. ASP? 23 ASP considerations • Quicker to market and lower entry investment but.. • Higher ongoing cost • Look for option to convert from ASP to Hosted over time • Accountability, Security Hosted vs. ASP? 24 Correspondent Bank Support • An ASP offering should be
able to support
correspondent bank
clients • Each Bank should be
uniquely branded on the
RDC screens • Deposit and customer data
should be segregated by
financial institution Your Bank Co- Respondent A Co- Respondent B 25 More considerations: Bandwidth requirements? Bandwidth 26 Average check image is 25kb • Includes front/back of check, 200 dpi binary and 100 dpi gray scale images For most RDC end users, a normal high speed internet connection is required. • Typical high speed internet: 11,000 kb/sec • A 100 check deposit will take a fraction of a second to transfer if no other activity on the network • A 1000 check deposit will take a little more than 2 seconds to transfer Most banks upgrade their branch->central site networks to at least 256Mb/sec when implementing branch image capture Bandwidth 27 A lot of vendors have offerings. What are the key differentiators I should look for? Solution Differentiators 28 Thick Client Applications • Application software is installed, run, and
maintained on the client’s pc Thin Client Applications • Application software is installed at the bank’s
hosting site and clients access it over the
internet • No client installation or maintenance Thick vs. Thin 29 RDC is shifting to a web base, to address the
inherent limitations of traditional thick
client end-user applications • Consequently, many banks are issuing RFP’s for a
second wave of RDC investments Thick vs. Thin 30 Scalability This business is going to grow
The architecture should scale up indefinitely − Many applications have an absolute upper limit, due
to their design − A good RDC application should continue to scale up by
adding additional low cost servers 31 Instantaneous response time
Scanners from multiple manufacturers
Highly accurate CAR/LAR and IQA Real time, accurate IQA is imperative! Intuitive keying and balancing support
Duplicate item detection across all deposits General Client Demands 32 Remote Deposit Capture – Client Requirements Vary Low End User • Ease of Use – the application must be intuitive, with a minimum of screens • Capture low number of checks, 1-2 deposits per day • Little or no need for sophisticated tools High-End Users • Large numbers of capture sites • Significant numbers of depositing accounts, User IDs • More hierarchical in their business – capture operations, regional managers,
HQ management • Need tools to deal with greater volumes of checks • Greater need for deposit management tools • May have remittance processing needs 33 Examples? Advanced Functionality 34 Multi-User Remote Deposit Support Operations Center Allied Utilities Site 2 High Volume Site Limited Staff
Capture only for deposits
Keying and Balancing performed by Site 3 staff Allied Utilities Site 3 High Volume Site Staff available
One operator captures deposits
Other staff performs Keying and Balancing Allied Utilities Site 4 High Volume Site Limited Staff
Capture only for deposits
Keying and Balancing performed by Site 3 staff Allied Utilities HQ Site HQ Site Staff reviews deposits, keys corrections and balances deposits
Deposits released to the credit union RDC Central
•Image Capture
•CAR/LAR, IQA
•Key, Balance
•Client Profiles
•Export 35 Multiple workflows per client Basic Deposit work flows • Scan and Correct - Items captured, rejects/exceptions handled at end of
the capture. • Scan and Edit - Items captured on single feed scanners, rejects corrected
when they occur. • Scan and Go - Items captured on Auto speed scanners. Corrections,
balancing done centrally. Coupon Remittance • Support for processing coupon based remittance, with transaction level
balancing, AR extract support, and the ability to define multiple coupon
types per bank client. Remittance – No Coupons • Check only capture with key entry of remittance information, with AR
extract support Key Verify Workflow • Items captured, and key verified, utilizing CAR results 36 Remittance processing support Many clients have in-house remittance needs or a need to handle
stranded remittance payments Considerations • Transactions with single coupon, multiple checks • Transactions with multiple coupons, multiple checks • Remittances without coupons • Multiple coupon definitions per bank client • Accounts Receivable extracts as a download to the client’s local PC 37 A Multi-use Capture Platform • Remote Deposit • Branch Capture • Regional Capture • Cash Vaults • Deploying a single
architecture for multiple
bank uses reduces the
total cost of item
processing, maintaining
your competitive edge Branch Capture Cash Vaults or Regional Capture Sites Customer Remote Deposits 38 What type of management and reporting tools does a bank or a corporate client need? Tools are important 39 Deposit Management Tools Deposit search across
sites, and recent history
Ability to sort deposits
by site, date, capture
User Id, Status
Deposit summary reports
reflect sorting and
filtering of deposit view
Ability to drill down to
view deposit details
Deposit summary data
can be saved as CSV file
on client PC 40 Deposit Summary Reports 41 Deposit Detail Reports 42 Finding a specific check image Item Search support
Search based on MICR
fields, amount
Date range
Hit list of search
results
View individual images 43 Other vendor considerations? Other vendor considerations 44 Marketing Tools Your vendor should be your partner in gaining new clients through RDC • Direct Mail Campaigns • Email campaigns • Webinar hosting • Tele-marketing campaigns 45 Sales Tools Merchant business case tools
Bank business case tools
Demo support
Pre and post sales technical support
Joint sales call resources
Videos 46 Source Capture - Benefits Measurement Benefit Description Benefit Metrics Inputs / Results Annual Financial Impact Reduced labor expense to Number of Daily Hours Spent Before Source Capture = 2 Deposit preparation savings: gather, prepare, balance, and deliver Percentage of Time Saved After Source Capture = 75% checks for deposit Number of Daily Hours Saved = 1.5 Number of Annual Hours Saved = 375 Labor Rate Per Hour $15.00 $5,625 Reduced supply expense to Number of Daily Deposit Tickets Used for Checks= 15 Deposit supply savings: gather, prepare, balance, and deliver Annual Pre-Printed Deposit Tickets Used for Checks= 3,750 checks for deposit Cost Per Deposit Ticket= $0.25 Number of Adding Machine Rolls Used Per Year= 120 Cost Per Roll= $1.00 $1,058 Accelerated availability for deposited Average Daily Collected Funds Before Source Capture = $3,294,167 Investment and use of increased funds via (1). earlier and more frequent Average Daily Collected Funds After Source Capture = $3,411,833 available collected balances: deposit dispatch and submission to the Total Value of Accelerated Funds = $117,667 bank (2). Faster clearing of items that Funding Rate = 8% are processed electronically $9,413 Reduced account analysis and monthly Average Monthly Service Fees Before Source Capture = $1,093 Reduced account analysis and service charges due to generating lower Average Monthly Service Fees After Source Capture = $0 monthly account service charges: per item fees and higher offsetting Estimated Monthly Value of Reduced Service Fees = $1,093 balances that receive earnings credit $13,117 Reduced labor expense to reconcile Number of Monthly Hours Spent Before Source Capture = 16 Account reconciliation savings: monthly statements due to fewer Percentage of Time Saved After Source Capture = 50% deposit corrections and adjustments Number of Monthly Hours Saved = 8.0 Number of Annual Hours Saved = 96 Labor Rate Per Hour $15.00 $1,440 Reduced deposited check losses and Average Number of Daily Checks Deposited = 1,000 Reduced write-offs and losses from and lower write-offs due to accelerated Percentage of Returned Deposit Items = 0.50% returned deposited checks: clearing and higher posting priority of an Annual Number of Returned Deposit Items = 1,250 electronically processed item Percentage of Uncollectable Returned Deposit Items = 30.00% Annual Number of Uncollectable Returned Deposit Items = 375 Percentage of Returned Deposit Item Losses Avoided = 20.00% Number of Returned Deposit Item Losses Avoided = 75 Average Daily Deposited Check Amount = $200 $15,000 Total Annual Savings $45,653 ANY MERCHANT 47 Marketing Videos Carreker Video Example Go to: http://www.carreker.com/land/webcapture-landing-page-06.htm 48 ???? Your Questions 49 Laura Fahey Source Capture Program Director 704-602-5283 lfahey@carreker.com Gary Brand Director of Channel Development 972-672-9872 gbrand@carreker.com More info Copyright © 2005 Carreker Corporation. All Rights Reserved. Remote Deposit Capture Webinar Thanks for your time! Remote Deposit Capture Webinar Thanks for your time!