[center]Remote Deposit Capture
Deployment, Fulfillment, Service & Support
What you need to know about RDC Implementations.[/center]

Author: Lui King

Despite the popularity of Remote Deposit Capture, the race to bring new and existing customers on-line has seen challenges for deployment, fulfillment, service and support.  As a result, banks, hardware providers, solution providers and 3rd party vendors have introduced a host of support programs to help ensure smooth implementations.

Banks and Corporations invest substantial resources and time evaluating Remote Deposit Capture hardware and software vendors.  However, once the vendors are selected, new questions arise.  What happens next?  How will the equipment be installed?  Who does one call if there is a problem? What are the ongoing support and maintenance concerns?  What are the available options?  These questions need to be addressed early in the process in order to ensure a smooth implementation and ongoing operation. 

A Remote Deposit Capture Implementation can be segmented into several stages:

1. Pre-installation and program management
2. Solution Installation
3. Preventative maintenance
4. Service and support
5. Upgrading software and hardware

Pre-installation and program management

The first step of the implementation process begins long before the equipment arrives at the client site.  Greg Schratwieser, President and CEO of ICI Consulting, a consulting firm focused on Banks and Credit Unions, says that there are “a myriad of problems that can come up during an implementation, but they can be avoided if the proper steps are taken beforehand.”  He advises that one should “assign a Vendor Project Manager” to manage the implementation process.

Betsy Didan, Document Processing Manager at COCC, a company that develops and supports the technology needed to implement banking strategies, shares the view of preparing before the implementation.  She says that it is important to sit down with the client to fully “understand the end-to-end solution or work-flow” and that one “must clearly define the needs.”  Ms. Didan further advises that it is critical to obtain the “buy-in from all stakeholders including the retail bank, operations and accounting” so that all parties and systems are properly aligned at “go-live.” 

It is critical not to under-estimate the firm-wide impacts Remote Deposit Capture can have upon a bank or corporation. RDC changes the very way in which corporations interact with banks and the way in which deposits and remittances can be processed. These changes impact everything from technology, operational procedures and personnel labor responsibilities and efficiencies to cash flow, risk and legal agreements.

Other firms also follow the approach of preparing the Client prior to going live by training users and trainers and by proving training documents, either written or digital.  Kathy Quimby, Director of Software Division with Symco Group, a 3rd party hardware maintenance and software solutions company for the check and remittance industry, says that Symco provides clients with a web-demo in order to familiarize them with the system.   

Solution Installation

The next stage of the process is the arrival of the equipment on site.  When RDC was first introduced, problems arose in which scanners did not work out of the box or were not compatible with the software. 

Today, hardware manufacturers have resolved most installation problems by providing USB connected scanners that are plug-and-play and also certify software vendors to ensure compatibility.   Masahiko Machida, a Director at Canon USA, says that Canon scanners can be up and running “in as little as ten minutes.” 

According to Steve Campbell, Vice President of Correspondent Banking at Zions Bank, which has brought 3,500 corporate clients online in the last 1½ years, Zions used to send a team to site to troubleshoot scanner problems.  Zions Bank has now overcome those initial problems and now provides mostly telephone support to customers.

To further improve out-of-the box quality, many banks and 3rd party providers conduct “hot tests” or a “hot stage” on equipment prior to shipping the scanners.  During a hot test, the mechanical parts of the scanner are checked, the firmware version is checked that it is current, and the software interface is tested. Should any issues arise during the hot test, they are addressed / remedied prior to deployment to the client. If your organization is not performing these types of quality assurance prior to scanner and software deployment, there are an emerging group of solution providers who perform these services.

In some cases, the technology solution provider performs these services on behalf of their banking or corporate client. In other cases, a third-party solution provider, such as the several companies who have traditionally focused upon banking technology support, have now developed solutions to meet the demands of the growing RDC marketplace.

With the introduction of hot tests and pre-installation training, difficulties during client installation are at a minimum, but can still occur.  According to Danne Buchanan, CEO of NetDeposit, an innovator of Check 21 software, one of the most common software problems is that the corporate firewall blocks the software, but this can easily fixed on site by IT support. 

Based upon conversations RemoteDepositCapture.com has had with industry practitioners, the famous “80-20 Rule” seems to apply to the firewall issue – there are about 5 or 6 common firewall configurations at banks and corporations which account for 80% of firewall conflict issues. Many of the leading RDC Solution providers now have enough experience where they can quickly recognize and resolve these types of issues.

From a bank’s perspective, be sure to consult with your solution provider any time you run into firewall or communication issues. Your solution provider has most likely encountered this specific problem before, and has already figured out a way to resolve it. The vast majority of the time, firewall and communication problems are simply an issue of configuring the firewall software to recognize the RDC communications and allow them to go through.

Regarding potential hardware issues James Langmead, Major Account Executive with Canon U.S.A. says that adjustments might need to be made to the feeder wheel tension.  However, this is necessary only when processing “non-standard checks, such as rebate checks, which are thicker than standard checks.” 

Despite the simple installation procedure, many companies do not believe that scanners are 100% plug-and-play and still provide installation support.  COCC, for example provides onsite support while Symco Group provides phone support at the time of installation.

Preventative Maintenance

Following the successful implementation of the RDC solution, preventative maintenance is absolutely required to ensure ongoing reliable operation.  In addition to training end users, both manufacturers and 3rd party providers supply preventative maintenance instruction and services. 

Scanner design has enabled the end user the ability to clean the scanners and make minor repairs and adjustments.  Preventative maintenance tasks include: replacing the feeder rollers, replacing ink, and cleaning the scanner lens with cleaner cards.  The frequency of maintenance tasks is a function of the volume of documents being processed. 

Some manufactures, such as Canon U.S.A., recommend cleaning the scanner every day with a damp, lint free cloth.  Other scanner manufacturers, such as Panini, recommend replacing the ink every 500,000 characters, replacing the feeder rings every 300,000 documents and sending the scanner in for service after 1 million documents. 

According to the scanner manufacturers, general maintenance does not require a technical specialist and can be performed by the end user.  Many vendors also offer maintenance kits, which include scanner cleaning pads and spare feeder rollers.  Since kits are relatively low cost, they can be a worthwhile purchase.  COCC, for example, offers a standard maintenance kit for about $100.

A final consideration of preventative maintenance is how clean the environment in which the scanner is being operated. Ensuring the scanner is in a clean, cool location will help lengthen longevity.  Ron Meinhardt, President of BLM Technologies, a single source provider of information technology products and services, says, “The environment in non-banks is not as clean as banks, which can result in higher failures.”  He elaborated further that while equipment manufacturers are already addressing this issue, it must be taken into consideration.

Service & Support

What happens when equipment breaks down during the normal course of use?  Vendors, Banks and 3rd party providers offer a multitude of different solutions, which fall into two categories: “depot” plans and “on-site” plans.

With depot plans, the customer mails the scanner back to either the bank or to the vendor, depending on whom the contract is written with.  An onsite service plan allows for a vendor representative to go to the end user.  On-site service plans are not as popular and are also more expensive than a depot plan.  Mr. Meinhardt of BLM Technologies, says that approximately “90% of their contracts are depot service and 10% on-site.” 

The level and cost of the plans vary from vendor to vendor, but most offer some form of 24-hour phone support and a guaranteed turnaround time on equipment sent in for repair.  The party that provides support depends on the solution and might be either a vendor, a bank or a third party provider.  The support center walks the user through a script of diagnostic tests to determine whether the problem is with the hardware or with the software.  The typical annual cost of a plan can range from 6% to 11% of the product cost.

The most common problems include clearing a paper jam, replacing the ink cartridge, replacing the feeder rings, cleaning the lens, or adjusting the image quality.  Mr. Campbell of Zions Bank says that, “the technology has developed such that over 80% of scanner malfunctions can be resolved by the user, either by following the manufacturer trouble shooting guide or by calling the support hot line.” 

The number of failures requiring that the scanner be sent in for repair has declined in recent years.  Michael Pratt, Vice President of Marketing for Panini, says that a “failure rate of less than 2% is often written into contracts with the banks.”  Steve Traut, Director of Sales and Marketing of Superior Press, a 3rd party provider, has experienced a similar failure rate and goes on to say that of the scanners returned for repair, only half actually have any problems.

Panini USA provides training to the bank implementing the RDC solution.  In this case, “the bank is the first line of defense.”  Alternatively, according to Mr. Machida, of Canon USA, Canon certifies their authorized dealer network in the repair and maintenance of Canon products. 

Eric Goering, CEO of LendingTools.com, which specializes in the design and delivery of web based applications for the financial services industry, takes the service a level further and has a Quality Assurance process in which they replace a scanner if it has been sent in more than two times.

Ultimately, it is important to understand that there are many options available to the customer depending on how critical the scanner is to doing business.  Mr. Schratweiser of ICI Consulting recommends having a robust Service Level Agreement (SLA) and locking in hourly support during the contract negotiations. 

The turnaround time on a scanner repair varies from 24 hours to several days, depending on the service contract.  Banks, vendors and 3rd party providers will provide a replacement scanner within 24 hours or guarantee a definite turn-around time.  Canon U.S.A., for example, offers an Advanced Exchange program, in which Canon sends a replacement unit to the customer.  Panini offers a solution that promises a 24-hour turn around time.

If a scanner needs to be sent off site for repair, it is important to have a contingency plan in place.  The level of back up procedures should be a function of the business.  Larger banks will often have spare scanners on site so that they can make a “hot swap”.  A smaller bank, with limited recourses, might have a procedure for using a scanner at another teller. Corporate end-users can follow a similar approach. With some scanners costing as little as $500, it may make sense to have a spare on hand.

The type of service plan available or used depends on the application; corporations will have different needs than banks.  As Mr. Goering of LendingTools.com explains, “in a corporate environment, backups are not always necessary, but in the cash letter process, a spare scanner pays for itself.”

A final consideration is an extended warranty.  Steve Traut of Superior Press advises purchasing the extended warranty of the equipment to avoid that uncomfortable situation when your customer's scanner breaks down a month after the OEM warranty just expired.  Not only is the end user upset that their hardware isn't working properly, it's a double whammy to hear that the repair costs are not covered because the hardware is out of the warranty period."

There are a multitude of different options as to who end-users deal with when they require service or support. Some banks handle all customer calls directly. Some corporations prefer to deal directly with the technology solution provider. Still others turn to third-party service providers. Currently, there is no clear leading operational method as to which party provides front-line support.

RemoteDepositCapture.com has seen a substantial increase in the number of third-party solution providers who provide service and support to end-users at a growing number of banks and corporations. Many other industries have seen third-party solution providers emerge as a critical factor which helps that industry become more efficient. Take internet advertising, for example- Google does not own the content, nor are they a direct advertiser, but as a third party, Google has helped propel the internet advertising industry. We believe third-party service providers will play much the same role in the RDC Industry, helping more locations get up and running, and stay up and running faster and at less cost than would otherwise be the case.

Upgrading Software and Hardware

Upgrades have become much easier to perform in recent years.  There are two types of upgrades that can occur: (1) software and (2) hardware.

For RDC software upgrades, there are two or three types of applications that are currently in use: “thick” client, “thin” client.  The thin client is an application, which is run over the Internet; the program is not installed on the end user’s PC.  For this reason, upgrades are automatically performed at the vendor site and are the most seamless form of upgrades. 

A thick client resides on the end user’s PC, similar to most Windows based programs.  Thick client programs can be set to automatically check for updates over the Web.  When an update is available, the user is usually prompted to update their system.

The decision to use a thick or a thin client application is dependent on the user.  According to Mr. Buchanan of NetDeposit, “there is a high demand for thin, but it has limited functionality…and it is better suited for smaller organizations.” 

Hardware firmware can be updated and upgraded similar to a thick client, directly over the Internet.  In most cases, the update happens automatically, with little input from the end user.  Upgrades occur the same way as updates.  Panini, for example, can upgrade the capacity of their scanners directly over the Internet.  There is no need to purchase new scanners if the check volume increases.  When selecting a vendor, inquire how you update or upgrade your hardware.

A final consideration is to forecast how your business will grow.  Mr. Buchanan, of Net Deposit, explains that “people don’t know what scales and what doesn’t” and customers need to think about the scalability of their solutions for long-term viability.

Conclusion

As the technology continues to develop the issues of this article will be addressed and the implementation and ongoing service and support will become even more streamlined.  Further, industry forces will also affect these processes.  Mr. Buchanan, of NetDeposit believes that there will be a “shakeout of vendors” and there will be a movement to standardize platforms.

Based on the advice and experiences of the vendors interviewed, the following Best Practices for an RDC implementation emerge:

1. Plan ahead and get the buy-in from all stakeholders.
2. Select a solution provider that will provide training prior to installation.
3. Perform a “hot stage” on the solution.
4. Learn how to perform preventative maintenance.
5. Have a solid service agreement and decide an on site or a depot maintenance plan.
6. Buy the extended warranty.
7. Develop a contingency plan.
8. Understand how upgrades will be made.
9. Plan for the future.  Is a scalable solution needed?

It is important to ask all the relevant questions prior to implementation, to ensure you have all parts covered.  This includes the initial training, equipment preparation, installation support, service, maintenance support and upgrades.  While addressing all of these topics is no guarantee of a hitch-free implementation, with adequate preparation, the Remote Deposit Capture experience will run much more smoothly.