Revolutionizing the Deposit Process
DCU (Digital Federal Credit Union) is a fan of "BIG ideas". These ideas often constitute a wave of innovation that changes member experiences. Remote Deposit Capture has been one of their BIG ideas they've actively pursued and investigated since 2004.
Identifying the need for a convenient deposit product was easy: many of their members are not in close proximity to branch locations. Furthermore, over half of their members are active home banking users. DCU's executive team has tried to find more convenient access points for their members for several years. Significant transaction volumes occur at foreign ATMs, shared branching locations and through the mail. Shared branching deposits each represent a cost to the credit union. In addition to the high processing expense, there is no guarantee of satisfactory member service at these locations.
With the help of Eastern Corporate Federal Credit Union (EasCorp), a home-based remote deposit capture (RDC) prototype was developed and evolved into PC Deposit. Deposits can be made within the online banking system, a service that members view as reliable and safe, without the need for additional hardware beyond a standard flat-bed scanner. Commercial businesses are also eligible to join and their usage of PC Deposit may develop a new source of fee income for the credit union.
Additional benefits to remote imaging include quicker float time, faster availability and decreased time in returning checks. While these are benefits, they were not significant in DCU's decision to move forward. All of their "BIG ideas" fall back to their mission of serving members.
A Two Phase Testing Process
DCU started testing the system with a group of staff members who would be integral to the overall support system and also closely matched the perceived typical user. Based on the internal testing, the staff created a list of Frequently Asked Questions and invested in training for the various support options that DCU provides (email, live chat and dedicated phone support).
After internal testing, the product was released to 2,000 members who were chosen based on approval criteria and high online banking usage. This control group did not receive any notification they were chosen - the PC Deposit link showed up on the interface and they could choose to use it. This program ran for four weeks to allow staff time to integrate themselves. In mid-March, the product was released to all online banking users. The only marketing was a news item in the January newsletter. The credit union plans to immediately market the product only to users of ATMs, shared branching locations and those who mail-in deposits.
To use the service, the member logs into the home banking application and clicks on a link. With the exception of commercial or DBA members, there is no registration process. Members only need to agree to disclosure statements. DCU approves each member to use the service based on following criteria:
- product and service relationship
- current loan and deposit balances
- credit bureau and Chex Systems information
Members receive approval notice within 24 hours by email. While some members may be declined, DCU decided they would be lenient and take some risk on members who may not fully meet the criteria, as the member may not come back to try again later if declined the first time. As the program allows credit union staff to set individual deposit maximums and holds, the risk can be mitigated.
The one struggle was appropriate staffing. Introducing a new, advanced delivery channel requires immediate member support. While credit unions may implement a remote deposit capture product as a way to ease shared branching or other remote deposits, the staff cannot be immediately reallocated, potentially leading to shortages and increased pressure on employees.
With six full weeks of usage 300 members of the control group used the product. They deposited 800 checks for a total of around $600,000. In comparison, with just over a week of availability for all home banking users, an additional 1,700 online banking users had signed up for the service and deposited $1M in checks.
DCU, with their innovation and collaboration, offer the industry a look at the future of banking. Whether online, in-person, or at an ATM, their members will be able to deposit funds at any time, deepening their relationship and at the same time enabling the credit union to stay on top of today's ever changing online technology.