The next big leap for banking is in the works, and it is remote bank deposits.Making your daily deposit from the comfort of your office chair.
The big banks already offer the service.
Regional banks are right behind them, and some community banks are taking small steps forward as well.
It's the beginning of the end of the daily trek down to the merchant deposit window, says William E.Martin, president of Nevada State Bank, which recently introduced its version.
Business customers can now scan checks and make deposits from their office desktops.
The new service is the result of the delay in air transport that followed the Sept.
11, 2001 terrorist attacks.When air transportation came to a halt, so did movement of funds from banks to federal reserves.
The feds' response: the Check Clearing for the 21st Century Act.
Quickly dubbed Check 21, it took full effect in October 2004.
In brief, it means most checks can be scanned and sent electronically.
Sending paper checks back and forth across the country is no longer necessary.
That changes the industry, which until now has been a complex, daily web of paper trails from banks to federal reserves, back to banks, as paper checks were trekked from the point of writing to the point of payment and often back again.
What it means for everyone, says Robert Zeller, vice president and treasury management consultant, U.S.
Bank, is that money moves faster."It reduces the float." The float has garnered lots of attention.
Some folks count on that float write a check for those new snakeskin boots on a Friday, bet that it won't hit your checking account until Tuesday; deposit your paycheck on Monday.
Used to be a safe bet.
The float's gone.
"Once scanned," says Zeller,"the check's virtually in the bank."
The new systems vary a bit from bank to bank.Wells Fargo was first to market with its Desktop Deposits, an Internet-based application.
It was followed by other banks, some choosing software over Internet applications.
U.S.
Bank, for instance, offers a software package, as does Nevada State Bank.
Typically, all of the systems provide (or sell) scanners to the customers, who then scan in the checks, create a deposit slip onscreen, and tap the submit button to zap the image over to the bank.
Deposit done.
Money on its way.
For bankers, the sweet spot is the business with $5 to $250 million in annual revenue, says Zeller.
Eliminating the float is a big selling factor for the new system, adds Martin, especially to businesses moving large amounts of money major,multi-branch retailers, grocers, and others that process numerous checks.
But even more, Nevada State Bank is selling its Remote Deposit system as a convenience.
Nevada State Bank sells scanners to its customers for about $800 As of now, only one manufacturer in Italy is making the scanners, says Martin, so he's expecting prices to come down as competition enters the new arena.
That's when the attraction will kick in for smaller customers, says Zeller, those that mail in their deposits, use the drop box, or walk-up teller.
The fact that money's moving faster through the system increases cash flow return, too, adds Chad Osorno,Wells Fargo Nevada Business Banking senior vice president and manager."It's not just the time it takes to go to the branch, it's extending the deposit window" right up to the close of the business day.
And, he says, in addition to optimizing its funds, the business is alerted to fraud sooner, another attraction of speedier, remote-based deposits.
So, are customers leaping into the new technology? Wells Fargo has over 1,000 clients using its Commercial Electronic Office online business service, which is the portal to its Desktop Deposit, says Osorno, but figures on how many Nevada customers are using the new Desktop Deposit are not yet in.
Nevada State Bank is finding that it takes a couple of weeks to get a customer up and running says Martin.
The scanner and software have to be set up, a custom operation that requires some upfront education.
But behind that, the customer needs to revise in-house procedures.At the very simplest level, the new deposit record has to be integrated with existing accounting systems.
Once scanned, the checks need to be stored in a safe place, then destroyed after a set period of time.
It shifts some of the responsibility for storage of used checks onto the shoulders of the customer, says Jim DeVolld, president and chief credit officer of First Independent Bank of Nevada.He is planning to initiate a remoteaccess deposit system sometime before the end of the year, he adds.
The lure for the high-volume customer, he says, is the ability to create batches of checks throughout the day and send them in, keeping deposits at a level with the check flow.
"It's the new hot topic in banking," he says.
Adds Zeller,"Banking has not changed for centuries.
It took a tragedy like 9/11 to change the way we do business."
