Seizing the Small Business RDC Opportunity: New Products Are Changing Everything

by Bob Meara, April 23, 2015
Industry Trends
North America

Abstract

Note: This report was updated in November 2015.

Banks seeking to migrate high-cost branch transactions to digital channels finally have what they need for the important small business segment.

As more banks seek to improve branch channel efficiency and effectiveness, migrating routine transactions to digital channels becomes key. Banks are well on their way to doing so among consumers, but have farther to go with SMBs. Closing the gap is important because SMBs visit bank branches much more frequently than consumers do. Celent SMB surveys suggest most small businesses are still visiting their local branch frequently to make check deposits. Banks could migrate these transactions to low-cost channels if more SMBs used RDC.

Remote deposit capture has become a staple treasury management product. Desktop solutions employing specialized check scanners are offered by most every US bank with a commercial client base. Similarly, mobile RDC usage has exploded among consumers. However, things aren’t so rosy among small businesses. Product cost and complexity alongside eligibility restrictions have hampered sales efforts at many banks. Traditional desktop products are too expensive for most SMBs, while mobile RDC offerings designed for consumers also miss the mark. Newly available vendor solutions now give banks what they need to seize the SMB RDC opportunity.

“New branch designs are incompatible with heavy transaction-oriented foot traffic. Thus banks need to offer customers convenient ways to transact using digital channels,” says Bob Meara, a senior analyst with Celent’s Banking practice and author of the report. “With roughly 70% of SMB branch visits tied to counter deposits, a low-cost and easy-to-sell mRDC solution appropriate for SMBs is the missing ingredient.”

The report begins with an argument for why small business RDC matters, both for its ability to meet customer needs and for its ability to migrate branch transactions to digital channels. The report then looks at historic SMB RDC adoption barriers and how new solutions can dramatically change the market opportunity. A solution landscape section follows, offering a brief comparison of recently launched commercial mRDC solutions.

This report contains 14 figures and 3 tables.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Why Small Business RDC Matters

3

Opportunity Knocks

8

 

A Product for Today

12

Solution Landscape

15

 

Vendor Listing

17

Conclusion

22

Leveraging Celent’s Expertise

23

 

Support for Financial Institutions

23

 

Support for Vendors

23

Related Celent Research

24

Sign in to download reports and access personalized information