remote deposit capture

An executive at a local bank asked me about what services they need to offer so that I might expand my banking relationship with them. My answer? Remote Deposits. The service needs are a bit different for businesses and personal banking, but the essence is the same.

What is Remote Deposit Capture?:
Remote Deposit Capture is a service which allows a user to scan checks and transmit the scanned images to a bank for posting and clearing.

What is needed for Remote Deposit Capture to work?:
– computer with internet connection
– a check scanner
– a bank or service provider that will accept the images

How does remote deposit capture work?

– scan checks to make a digital deposit
– transmit deposit via an encrypted internet connection
– deposit post to your account
– funds availability based upon your standard deposit schedule.

RDC benefits:
– Reduce travel time to and from the bank. That reduces labor, fuel and is good for the environment. The risk of an accident on the way to or from the bank is eliminated.
– Get deposits into the bank quicker- scans are quick and easy whereas making time to go to the bank may cause delays.
– Quick access to check status. No waiting weeks for returned insufficient funds notices. Also, it’s easy to retrieve deposit check scans for proof when needed.

Two things can happen to the deposit checks. They can be cleared converted to ACH or cleared as images. If it’s being converted to ACH, the check writer must be notified. This is why some web sites accept payments simply state “make an ACH payment”.

Check 21 legislation allows checks to be processed and cleared based upon images of the items for deposit. Check 21 applies to all US-Dollar checks drawn on a US-Bank.

For your business, if you have a small number of check deposits a month, use your banks RDC service if they offer it. If you have at least 1,000 checks per month, then an outside service provider may be a better option. You’ll need to weigh the costs and services provided by each entity to determine what’s best for you.

Features to look for:
– duplicate detection
– automatically re-orient the displayed image of any check that is scanned upside down or backward
– downloadable reports in excel format

iStream Financial Services Anticipation of Risk Management Pays off

iStream Financial Services’ Anticipation of Risk Management Related to Remote Deposit Pays Off

January 27, 2009 – Brookfield, Wisconsin – iStream Financial Services, Inc., a financial technology company in the business of managing payments, announced today the company’s systems, policies and practices are on target with the FFIEC’s newly-released guidelines for risk management for Remote Deposit Capture (RDC).

“These new risk management guidelines from the FFIEC are critical guidelines for examiners, business owners, banks and technology providers as many of the solutions out there aren’t as secure as they could be. Based upon our experience in payments, we anticipated and appreciate the need for these controls. That said, we’ve worked hard to ensure the reliability of our systems and procedures surrounding our solutions. The completion of our SAS 70 Type II specific to RDC processes is just one way we have proved our commitment to our customers” said Fred Joachim, President, iStream Financial Services.

“We believe we have the most secure solution on the market. Our RDC process is secure from start to end, beginning with encrypting the images at the point of capture and eliminating the need for the user to store or export sensitive data.”

iStream’s foresight goes back years, not just months. In October of 2006, iStream was asked to present at the FDIC Technology Summit in Washington D.C. regarding “Emerging Issues and Risk Mitigation in the Financial Institution Industry”. The presentation focused on helping auditors and regulators understand the risks related to RDC. iStream continues to be a leader regarding RDC processes and technology.

“You read and see the effect of data breaches almost daily. From credit card information to Social Security Numbers, no person or company ever wants it to happen” states Mike Nell, VP of IT. “Our IT team has over 75 years experience developing solutions which address the inherent risks in payments systems. We were able to leverage that experience to engineer security, integrity, and reliability into our solution from the start.”

iStream’s Remote Deposit Capture service has seen phenomenal growth within the past few years. iStream’s flexible solution enables businesses to leverage multiple banks and is a major differentiator in the marketplace. In today’s economy, iStream provides businesses the controls they need while being able to work with the banking partner of their choice.

The FFIEC guidance, entitled “Risk Management of Remote Deposit Capture,” addresses the essential elements of RDC risk management: identifying, assessing, and mitigating risk, as well as measuring and monitoring residual risk exposure. The guidance also discusses the responsibilities of senior managers in overseeing the development, implementation, and operation of RDC in financial institutions.

iStream developed the first integrated Application Service Provider (ASP) RDC solution that enabled the company to go direct to customers and offer Financial Institutions a superior solution. The essential ingredient for iStream’s success is simplicity: the iStream ASP model takes minutes to set-up; the deposit process is three easy steps; and the user-friendly system moves beyond the deposit to incorporate online reporting, returns management, and is easily integrated to back office applications such as accounts receivable systems.

About iStream Financial Services:
iStream Financial Services’ core mission is to provide businesses and banks solutions to consolidate and manage various payment types. The company leverages its technology platform, knowledge and people to introduce new products that will help business and banks across the country. iStream complies with FDIC security standards and is audited annually. The company has also completed a SAS 70 Type II to validate the end-to-end controls of our Remote Deposit Capture process ensuring the integrity, reliability, and security of our application and systems.


FFIEC Issues Guidance on Risk Management of Remote Deposit Capture

Financial Regulators Release Guidance on Risk Management
of Remote Deposit Capture

The Federal Financial Institutions Examination Council (FFIEC) issued guidance today for examiners, financial institutions, and technology service providers to identify risks, evaluate controls, and assess risk management practices related to remote deposit capture (RDC) systems.

RDC enables customers to make deposits from their homes or businesses instead of taking the deposits to their financial institutions. Digital information captured at the home or business is transmitted to the financial institution or its service provider for clearing and settlement. Financial institutions might also use RDC in their branches and automated teller machines (ATMs) to facilitate deposit processing.

When properly managed, RDC can reduce processing costs, support new and existing products by financial institutions, and accelerate the availability of customers’ funds. However, RDC also introduces new risks and increases existing risks in processing deposits originated by an institution’s commercial or retail customers, or by customers of other financial institutions domestically and abroad.

The guidance, Risk Management of Remote Deposit Capture, addresses the essential elements of RDC risk management: identifying, assessing, and mitigating risk, as well as measuring and monitoring residual risk exposure. The guidance also discusses the responsibilities of senior managers in overseeing the development, implementation, and operation of RDC in their financial institutions. Interagency RDC examination procedures will be published in an updated FFIEC Retail Payment Systems booklet scheduled for release in early 2009.

FFIEC RDC Guidance (PDF)