At one time, fraud involving mobile Remote Deposit Captured checks (RDC) was an easy scam for those looking to take advantage of a system loophole within the new technology. In short, they used the system's initial design limitations and gaps in the framework to double-dip on the same check. After using RDC to add money electronically to their account, the scam-artist would then also walk into a branch - or any money cashing location - and get actual cash for the same check. They took advantage of the small window of time when the bank or credit union's system had yet to catch up electronically to record the transaction containing the check's initial deposit. As simple as it sounds to outsmart the system, ultimately many of these 'ingenious' scammers got caught, as they often used their own account to deposit the money. Brilliant!? Not so much.

Key Bank created a video in 1995 describing the Day in the Life of a Check. This video serves as a reminder of just how far we have come. While hair styles were higher, perms tighter, shoulder pads larger and mullets longer, one thing the 90's financial industry was short on was the technology we enjoy today. Take a few minutes (4 minutes and 38 seconds) to watch this video and recall a time in the not-so-distant past. My apologies to anyone who was not transferred to another department or was unable to find another job after The Check Clearing for the 21st Century Act (Check 21) was signed into law.

Along with members checking their account balances, Remote Deposit Capture is one of the primary reasons mobile banking users take advantage of the technology. According to the Federal Reserve, RDC is the fourth most common activity among mobile banking users behind checking balances, transferring money and accepting account alerts. Something you may not be aware of is that remote deposit capture has its roots in big business.

"The dog ate my homework."

"My roommate stole my report."

"The papers must have fallen out of my laptop bag."

"I lost the receipt... can I still return this?"

All of our life, we have been coming up with excuses for teachers, professors, and bosses as to why we have shown up empty-handed when an assignment was due. However, advances in modern technology have made these excuses meaningless, as more and more paperless options are present everywhere we look. Our 3rd graders are emailing teachers their homework assignments, a grad student's thesis is uploaded electronically to a university server, monthly reports are transferred within drop box folders, and a store credit card retains our shopping history. So isn't it about time your credit union loses the paper and embraces the efficiency of paperless? 

This time of year promotes reflection on what we should be grateful for in our lives, from family and friends, to work and social life balance. It is a time to count our blessings, share our wealth with those less fortunate, and consider changes we can make to improve relationships and our own quality of life. And while Thanksgiving is a time for family and faith, the holidays often afford us time to evaluate changes we can make for the coming year to improve efficiency at work. Credit unions finalize budgets and plans with board members, and often the idea of a core system review is part of those discussions. When evaluating your current core technology, it is essential to consider how your core makes your work-life easier.

Remote Deposits and the Check 21 Act have revolutionized banking. Johnny Depp has revolutionized the characterization of quirky movie roles. To have a little fun today, we dive "deep" into the commonalities of the famous actor and credit union mobile banking solutions:

We have talked a lot in the past several months about obtaining new members.  We even wrote an eBook entitled Mastering Millennials as a guide for credit unions to attract the 35 and under generation. But I want to take a step back and discuss how to retain existing members, and how to get older members to embrace new technology, and not be afraid of it.  I will talk specifically today about Check 21 and Remote Deposit Capture. 

We reported in the past the 2014 Federal Reserve findings that 51% of smartphone users use their phones for Mobile banking, of which 38% of them have used remote deposit capture in the past year.  We all have heard the findings, reports and analysis that these numbers are going to continue to grow.  And while this may present opportunities for your credit union to obtain new members, it can also present challenges to getting existing members to use the credit union core technology you invested in.

Why you must convince your members and yourself that remote deposit capture is safe

In 1991 Saloner and Shepard found evidence for the role of network effect in their study of ATM adoption.  What was discovered in the case of ATM machines, was that if ATM’s were largely available over geographically dispersed areas, the benefits from using an ATM would increase since customers could access their accounts from any geographic location they wanted.  This implied that the value of an ATM network increases with the number of available ATM locations, and the value of a financial institution’s network to a customer would be determined in part by the final network size of the financial institution. 

In Back to the Future Part II, Marty McFly visits his future self, where cars fly and kids ride hovercraft skateboards.  The year was 2015.

In October 2003, the Federal Reserve announced The Check Clearing for the 21st Century Act (or Check 21 Act).   As we know today, the Check 21 Act took effect one year later, and even then most credit unions were left wondering how this act would benefit them.   The year was 2004.

Most credit unions found themselves in the same situation after the announcement as they did before it: Sending their “paper checks” to a corporate credit union or bank for digital image processing and clearing.  All of the advantages of check processing were realized by institutions that were processing the checks, not those receiving them.