With all of the excitement of Mobile RDC, the industry has yet to experience significant losses… at least those which have leaked to the public. OrboGraph commends RemoteDepositCapture.com for initiating a study in this area to help identify and quantify the risk in Mobile RDC; at least anecdotally.
Business-focused RDC solutions have been very beneficial for the banking industry. Not only has the value been there for businesses, but the losses have been minor across the industry. But there are “secrets” behind the minimal losses, including:
- Most RDC customers are existing clients, so risk is inherently lower.
- Hacking an RDC system, due to the nature of processing check images, essentially doesn’t make a lot of sense, as fraudsters are not going to upload images themselves, nor is it the path to transferring funds to other accounts.
- Deposit fraud through this channel is many times grouped into other areas, such as NSFs and non-channel specific fraud.
- Missing endorsements seldom comes back classified as fraudulent activity, but returns do happen.
- The concern over a check being represented at other FI’s or check cashers are happening, but the industry can’t really quantify it.
- Significant lawsuits have happened, but these are settled “out of court” and many times are not public record.
One might expect that banks want to protect the integrity of this channel by minimizing the losses around it. By minimizing the losses, one can use this as a deterrent to criminals and help the trend to electronic.
We anticipate Mobile RDC to follow a similar path. Mobile RDC is still very early in the adoption cycle. Although banks and consumers are gung-ho about rolling out, only a small percentage of people are currently using the service across the board. 2014 and 2015 will see very significant volume jumps no doubt! The risks learned in this study will most likely be classified as “perceived risk”, as it will be challenging to obtain real numbers which are meaningful for the future.
The research will provide value in other areas including funds availability, market penetration and corporate adoption. Visit remotedepositcapture.com for more details on this study.