WACHA Electronic Payments Conference Considerations for Your Mobile Program Mobile Remote Deposit Capture

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1 WACHA Electronic Payments Conference Considerations for Your Mobile Program Mobile Remote Deposit Capture Tim Wilcox Product Manager, RDC Solutions March 26, 2012

2 Mobile Remote Deposit Capture (RDC) Market Update Early adopters USAA launched in August 2009 JP Morgan Chase Quick Deposit July 2010 State Farm Bank MyTime Deposit July 2010 Rockland Trust mdeposit February 2011 US Bank DepositPoint Mobile March 2011 PNC Bank Mobile Deposit April 2011 M&I Bank M&I Mobile Deposit Dec 2011 Large FI s have created the demand with aggressive marketing and advertising Home scanning still exceeds the mobile deposit volume but mobile deposit is closing gap Risk controls/compliance are the primary questions from FI s reviewing product Top 5 risk controls and compliance items to consider: T&C s (restrictive endorsement, destruction, fees, availability, etc.) Deposit amount and velocity limits to control risk Eligibility requirements to use product Destruction of original check Application duplication detection & enterprise duplicate detection 2

3 Current Mobile Deposit Models Three mobile deposit models are currently offered Stand alone mobile deposit app Supports first to market initiatives Not dependent on current mobile banking strategy or deployment Improved implementation timeline iphone Android BlackBerry Mobile Banking app with mobile deposit Integrated user experience Access to multiple banking features Long term strategy will use this approach iphone Android Mobile API Integration platform for LFI s building their own Mobile Banking app Integration platform for Mobile Banking platform vendors iphone Android BlackBerry We wanted to be one of the first, if not the first, in our footprint to offer mobile capture, said Alex Jimenez, a senior vice president and the director of deposit operations and alternative delivery at Rockland Trust Co. in Massachusetts. American Banker Feb. 8,

4 Mobile Deposit Image Correction Raw Image Processed Image Note: MICR line and Account Holder Info purposely blurred

5 Mobile Deposit Security, Risk and Technology Controls Security and risk controls Duplicate detection (24 month database) Enterprise duplicate detection Single day and multi day deposit amount limits Single day and multi day velocity limits Presence of endorsement validation Deposit review and approval for exceptions Routing number and MICR format validation Deposit status alerts Delay customer funds availability based on business rules Technology controls Single sign on or multi factor authentication SSL 128 bit data encryption for secure Internet communications Check images and data should not be stored on the smartphone Advanced Encryption Standard (AES) utilized for all sensitive customer data, images, X9.37 files, etc. Privilege based user roles and responsibilities 5

6 Mobile Deposit Best Practices Customer eligibility requirements: Length of time as deposit customer Number of NSF s for X period Average ledger/collected balances Qualfile score/credit score Product mix Require customers to use restrictive endorsement For Deposit Only Financial Institution Name # Signature 6

7 Mobile Deposit Best Practices Use available deposit amount and velocity limits Current Defaults Single Amount Daily Amount Daily Count Multi day Amount Multi day Count Low $500 $500 3 $1,000 7 Average $8,000 $10,000 8 $12, High $25,000 $25, $30, Securely store and destroy original for end user protection T&C s include customer and bank responsibilities Use deposit float or holds to limit funds availability Up to $250 available next business day & funds over $250 available two business days. Up to $500 available immediately & funds over $500 available in two business days. 7

8 Thank You Tim Wilcox