Originally appeared in March 2010 issue of Bank News.

By: Dick Drew, Executive Vice President of Bluepoint Solutions

Consumer confidence in larger financial institutions remains low, providing opportunities for community banks to attract new, and increase loyalty with existing customers. Many consumers that have grown frustrated with larger banks are shopping for a new financial institution, and many, for the first time, are looking at community banks as a viable option. Consumers are seeking institutions that offer the type of one-on-one banking that community banks are renowned for, but also provide sophisticated technology tools.

Consumer or home capture is one of these tools that can attract new customers and creating a protection strategy for existing customers. Home capture eliminates trips to the branch or the ATM, giving customers the flexibility to make deposits any time, from any place. The only thing required by the customer is a working scanner and an Internet connection; there is no software to install, making this a very attractive offering to the end-user. This type of service is extremely valuable to those customers that are self-employed or run side businesses out of their homes, such as rental property owners or product distributors like Mary Kay. These “consumers” are valuable to an institution, but may be often overlooked as a merchant or small business. Home capture offers a solution that meets the needs of the bank and the customer. Additionally, those community banks that are serving a dispersed customer base, such as retirees or active military personnel, will be able to retain those customers and collect deposits, no matter how remote the location.

In addition to customer convenience, this creates an entirely new channel to receive deposits. This technology is gaining momentum among credit unions and is demonstrating significant results even at an early stage in the adoption cycle. However, among community banks this still remains a relatively untapped opportunity.
According to a report by Lydia Cole in the 2009 Technology Guide for Credit Unions, Digital Federal Credit Union launched a home capture solution in March 2008, and within one year had 15 percent of its membership signed up for the service. The credit union received approximately 9,000 deposits per month, totaling more than $13.5 million.
Another example from the credit union community is USAA. According to the article “Now Might be Time to Reexamine Consumer Remote Deposit Capture” in the Jan. 21, 2009, issue of Bank Systems & Technology, USAA has nearly doubled the rate of its deposit growth since deploying the technology in 2005.

Once implemented, consumer capture can be used to fulfill consumer demand, increase deposits, retain existing customers and attract new customers. Additionally, when implemented in a software, as-a-service format, community banks can quickly deploy consumer capture, with minimal upfront expenses. During a recent webinar, Celent Senior Analyst Bob Meara said that consumer capture might be worth another look. As banks struggle to grow deposits and gain consumer trust, consumer capture is becoming more and more attractive.

While many financial executives dismissed consumer capture in the past, it is proving to be a technology that should no longer be ignored or overlooked. Given the growing distrust among consumers for larger financial institutions, the demand for convenience and anytime banking, and the demonstrable results from the credit union community; the market conditions are favorable for community banks to be successful with a consumer capture tool. The only question that remains is will your bank seize the opportunity or watch from the sidelines?