For Here or To Go?

The evolution of remote deposit finds credit unions on the mobile forefront.


Two factors are driving many financial institutions toward self-service deposit channels. One is increased convenience for the member. The distance to the closest branch and its hours of operation become a secondary consideration in choosing a primary financial institution when a host of financial services are just a mouse click or screen touch away. Los Angeles Firemen’s Credit Union ($881M, Los Angeles, CA) estimates members who go to the branch just once a week could save $50 per year in gas by using the credit union’s remote deposit technology.

The second facor is institutional benefits in the form of dynamic cost savings and reduced operating expense. Largely, consumer-based remote deposit technologies developed in tandem with the home banking revolution. When Digital Federal Credit Union ($3.6B, Marlborough, MA) first unveiled its “PC Deposit” product through its home banking program in 2008, deposit costs to the credit union were slashed to just pennies when compared to traditional methods such as shared branching ATM (approximately $3 per item) and regular ATM or mailed deposits (50 cents - $1 per item), says Craig Roy, vice president of support services. Systems that work with a typical PC scanner required little to no investment from the member, as the necessary hardware is present in an overwhelming majority of member homes, Roy says.

Now, the rise of smartphone technology has the industry turning its eye toward mobile solutions. With the launch of WV United Federal Credit Union's ($24M,Charleston, WV) remote deposit via iPhone in the summer of 2009, credit unions led financial institutions into the realm of expanded member convenience and increased cost savings from the millions of members who access the web on-the-go through a mobile device.

More than 20,000 of Digital’s roughly 180,000 online banking users have made deposits using their smart phone since the credit union’s “Mobile PC Deposit” service was launched in April 2010, and for the past four months, the credit union has processed more checks by RDC than are mailed in by members.  

Mobile users simply snap an image of their check (front and back) via their smartphone and deposit it into their online banking account. According to PC World, these mobile deposits are actually safer for members and institutions than traditional online deposits because the phones are less likely than computers to be affected by malware. Institutions that opt to charge for deposits beyond a certain amount per month are also generating fee income from the service.

These mobile remote deposits are just one facet of an increasingly virtual delivery system, with credit unions, banks, and even third party groups such as PayPal adapting to the changes. “Many of our core offerings did not exist a few years ago,” says Jesse Boyer, executive vice president of Realtors Federal Credit Union ($83M, Rockville, MD) a virtual institution serving the National Association of Realtors. The credit union manages deposits through its shared branching ATM network, online remote deposit, and, as a final resort, mailed checks. It is currently working to expand its mobile offerings. “Youth, especially, are no longer dependant on branch structure,” Boyer says. As technology continues to improve, an all-virtual industry is not unforeseeable in the future.