SW Corporate paper addresses remote deposit

PLANO, Texas (11/5/09)--Remote deposit has benefited credit unions because of operational efficiencies and cost reductions, according to a new white paper from Southwest Corporate in Plano, Texas.

The paper, "Five Years Later: A Perspective on Check 21 and the Remote Deposit Industry," explores the changes that have taken place in the remote deposit industry and their effect on credit unions.

Remote deposit was made possible after the Check Clearing for the 21st Century Act, Check 21, became effective in 2004. Check 21 authorized financial institutions to create a legal equivalent, or substitute check, printed from electronic images of the original check. As a result, financial institutions can exchange images of checks with other financial institutions without physically transporting the checks.

The paper notes efforts by early credit union adopters of remote deposit. For instance, Digital FCU, Marlborough, Md., enrolled 3,000 users in the first week and saw figures surge to 16,000 users in the first five months of using remote deposit, the paper said.

Southwest Corporate offers credit unions Branch Capture and Teller Capture. Brad Ganey, Southwest Corporate senior vice president of payment services, encouraged credit unions to do their homework when choosing remote deposit products.

"It's important that 11th-hour decisions are not made in a vacuum," he said. "We've seen decisions made too quickly because the Fed was closing the site nearest to the credit union, or a service provider told the credit union it was not going to service paper anymore.

"Credit unions need to talk strategically about how a product fits into their long-term plan. Is this a product that offers the ability to attach other applications to it in the future or will it have to be thrown away later? Can the credit union use the same channel to deploy multiple applications?" Ganey said.

The paper concluded that the future will further push remote deposit toward credit unions and members.

"Many benefits are available to credit unions that perform their due diligence and launch them with proper planning and appropriate safeguards," the paper said. "The industry has come a long way in five years, and evidence suggests the next five will evolve just as quickly."

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