I just got back from an excellent Remote Deposit Capture
Summit organized by RDC.com. It is fast shaping up to be the place to gain knowledge and network with key players in the
check processing industry. Not so long ago, there were several events a year
devoted to, or with a major emphasis on check processing. Most have fallen by
the wayside- perhaps driven by the assumption that check processing is mature
and uninteresting. That this was from true was attested to by many at the
Summit who presented business and consumer adoption figures showing a vast, yet
untapped market.
Whether adoption has been glacial or spectacular depends on
perspective. Celent’s Bob Meara had done a study a while back showing that
check imaging has had a faster uptake than most other technology introductions
in the banking space. Yet, the impatience to drive distributed capture into
every office, shop and home is understandable. There was continued debate at
the Summit between risk perception and the need to drive customer convenience.
It is my take that while the risk folks ruled the roost in the early years, the
convenience advocates are beginning to scale the ramparts.
Yes, mobile RDC is cool and growing, check scanners are
growing smaller and more accurate, but what caught my eye at the Summit is a
possible shift in industry tectonics. Remember the early days of distributed
capture? The focus was on branch back counter and teller capture back then. The
technology players in the marketplace were those that had a pedigree in
traditional check processing- the people who could make documents fly down the
track on a 3890 high speed sorter. You had to earn spurs in centralized, sorter-based processing
to get a seat at the distributed capture table.
The push to capture checks from outside a financial
institution’s infrastructure through merchant capture, and the slow evolution
of the X9 and image quality standards began the tear away from the
“sorter-on-a-rope” paradigm, as an industry wag uncharitably put it. New players entered
the field, and some leading names disappeared from the industry. Fast forward (yes,
an obsolete term in the MP3 era) to 2012, and we have technology suppliers
specializing in particular channels of capture. Clearing and settlement? Oh
well, that’s something that someone does with the X9 file we give them. Now,
toss in the down-loadable app, and we are perhaps set for more deconstruction
of the check processing chain.
I am tempted to draw a parallel with the evolution of card
processing. During the paper draft days, there were “paper factories”
processing card transactions. Electronic Draft Capture (EDC), and the
introduction of specialized terminals by Verifone , Hypercom and others changed
the nature of the industry. Today, there are those that specialize in the acquiring
front end and others who drive scale through the switch. Substitute the words
“capture” for “acquire” and “clear” for “switch” and you may have a template
for where check processing may go.
I know past is not always prologue, and checks are very
different from cards. Draw the picture out nevertheless and contemplate the
shape of the check processing industry in five years. Fascinating, right?
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