the risks and rewards of remote deposit services
Skip this Video
Download Presentation
The Risks and Rewards of Remote Deposit Services

Loading in 2 Seconds...

play fullscreen
1 / 23

The Risks and Rewards of Remote Deposit Services - PowerPoint PPT Presentation

  • Uploaded on

The Risks and Rewards of Remote Deposit Services. 2009 Treasury Management Conference September 10, 2009 Omaha, Nebraska. Agenda. What are Remote Deposit Services? Remote Deposit Capture Branch Capture Background on Remote Deposit Benefits Risks Responsibilities Agreements.

I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
Download Presentation

PowerPoint Slideshow about ' The Risks and Rewards of Remote Deposit Services' - claudio-crowe

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.

- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
the risks and rewards of remote deposit services

The Risks and Rewards of Remote Deposit Services

2009 Treasury Management Conference

September 10, 2009

Omaha, Nebraska

  • What are Remote Deposit Services?
    • Remote Deposit Capture
    • Branch Capture
  • Background on Remote Deposit
    • Benefits
    • Risks
    • Responsibilities
    • Agreements
what is branch capture
What is Branch Capture?
  • Branch Capture is a process that allows tellers/branch personnel to scan checks accepted over the counter and transmit the scanned images to the FIs central operations area.
what is remote deposit capture
What is Remote Deposit Capture?
  • Remote deposit capture is a service which allows a user to scan checks and transmit the scanned images and/or ACH data to a financial institution for posting
remote deposit process
Remote Deposit Process

Remote Printing






Image Exchange


Image Exchange

Depository Bank


Paying Bank






Direct Send

how does rdc work
How does RDC Work?
  • Merchant customers present traditional paper checks to purchase items or make payments.
  • The merchant captures these checks using a remote deposit scanner and application which collects data and images, and creates a specially formatted file.
  • The merchant submits the file electronically to the financial institution (or its service provider) for deposit, clearing, and settlement.
  • Once the bank validates the electronic file integrity, the deposit is posted and the transaction is cleared and settled using the Check 21 model.
Any Bank

FRB Account


Credits & Debits

Check Advices / Adjustments / Item Fees







Transit Items


Returns (Paper / Electronic)

Paying Institution

Any Bank




Transit & On-Us Items


Any Bank


Remote Capture Vendor


Financial Institution

Image Archive

DDA Posting


Deposit Activity

Online Banking

clearing and settlement
Clearing and Settlement
  • Image – based
    • Electronic cash letter transmitted from BOFD to collect items
      • “Truncation”
  • ACH
    • eCheck - “Conversion”
      • ARC/BOC/POP
echeck vs image exchange
eCheck vs. Image Exchange
  • Conversion refers to the electronification of specific check data (MICR, amount, etc.) into a non-image file format for clearing and settlement using ACH
    • Business checks, travelers checks, credit card convenience checks, checks >$25,000, and others are not eligible.
        • ARC – Accounts Receivable Conversion
        • POP – Point of Purchase
        • BOC – Back Office Conversion
echeck vs image exchange1
eCheck vs. Image Exchange
  • Truncation refers to the conversion of traditional paper checks into electronic images for clearing and settlement using the Check 21 model
    • All checks including business checks, money orders, etc. are eligible for truncation and there is no statutory limit on the transaction amount
rewards of rdc fi
Rewards of RDC - FI
  • Reduced Transportation Costs
    • ATM/Branch/Incoming Customer Cash Letter
  • New Revenue Streams
    • New Clients
    • Existing customer consolidation of relationships
    • Additional products
    • ACH & Checks
    • Elimination of geographic boundaries
rewards of rdc fi1
Rewards of RDC - FI
  • Reduced Processing and Clearing Costs
    • Lower fees for image exchange
    • Transportation costs reduced
    • Staffing reduction
rewards of rdc customers
Rewards of RDC - Customers
  • Accelerated Clearings
    • More Processing Time
    • Later Deposit Deadlines
  • Improved Availability
    • Make deposits earlier in the day
  • Enhanced Cash Flow
    • Accelerated clearings and earlier availability
rewards of rdc customers1
Rewards of RDC - Customers
  • Reduced Transportation Costs
    • Up to 80% reduction
    • Convenience
      • No need for couriers or trips to FI
  • Reduced Processing Costs
    • Eliminate
      • Time and expense to go to bank
      • Time spent balancing deposit and associated keying
    • Consolidations of Banking Relationships
rewards of rdc customers2
Rewards of RDC - Customers
  • Consolidations of Banking Relationships
    • Geographic footprint no longer necessary
    • Increase volume
      • Lower pricing – per item fees
      • ‘preferred’ availability
      • Expanded credit relationships
      • More efficient corporate treasury
rdc issues customers
RDC Issues - Customers
  • No legal foundation for Remote Deposit Capture
    • Agreements assign responsibility to corporate
  • Image Quality
    • Corporate user responsible for adequate images
  • Duplicate Items
    • Corporate user warrants that item will only be presented once
rdc issues customers1
RDC Issues - Customers
  • Captured Checks
    • Retention and security
    • Destruction
  • Cash Deposits
    • Deposit at bank
    • Transmission Failure
  • Security
    • Access to scanner and transmission of deposits
rdc issues fi
RDC Issues - FI
  • RISK – FFIEC Guidance Issued
    • Pre-Implementation
    • Post Implementation
  • No legal foundation for RDC
    • Regulations/Law/Legal Precedent
    • Agreements
risk pre implementation
Risk – Pre-Implementation
  • Assessed by senior management
    • Legal risk
    • Compliance risk
    • Reputation risk
    • Operational risk
  • RDC program
    • compatible with FI business strategies
    • Management able to manage risks
rdc agreements
RDC Agreements
  • Definitions
  • Hardware/Software Issues
  • Deposit & File Limits/Returns
    • Deposit and File Limits
  • Transmission Issues
  • Image Quality
  • Items Eligible for Deposit
  • Deposit Deadlines
  • Funds Availability Schedule
  • Retention/Destruction Policy
  • Warranties and Indemnification
  • Liability
    • Errors and Discrepancies
    • Intrusion and Stolen Data
  • Updated Customer Information
  • Contingency Plan
  • Financial Risk (Risk Assessment)
  • Controlling Law
risk post implementation
Risk - Post Implementation
  • KYC Procedures and Policies
  • Risk Policy and Procedures
  • Periodic Review of Customers and RDC Usage
  • Training for Customers
  • Vendor Due Diligence/Suitability
  • Business Continuity
  • Risk Measuring and Monitoring Systems
summary risk reward
Summary – Risk & Reward
  • Great Technology
  • Many cost and time savings features
    • If approached and implemented correctly
  • Benefits for FIs and Customers
  • No Law or Case Law Yet
  • Risk must be managed to protect FI interests and satisfy Customers