Citizens National Bank Hits a Homerun with Remote Deposit Capture
If you believe everything you read from the research that has been done, a question about where community banks are with remote deposit capture would conjure up visions of bankers with their heads in the sand, paralyzed by fears of possible fraud, only offering this product defensively before their best customers are stolen. But, these researchers have not met Milton McGee and his team at Citizens National Bank (CNB) in Henderson, Texas.
According to Kenneth Black, Senior Vice President, the bank embraced Check21 as soon as the legislation passed and they looked for opportunities to cut costs and to create new products. The bank is totally image enabled and has also implemented branch capture. They rolled out Metavante's AFS Direct Merchant remote deposit capture product in late October 2006. They delayed implementation until the bank's core operations team had completed another conversion to enable them to focus on this product. They thoroughly tested the product internally with their own insurance agency for sixty days before the official launch. One of their top customers is quite tech savvy and asked for the product right after launch. The bank was a little reluctant to have a highly visible client be their first "outside" installation, but it proved to be beneficial. This customer helped them "tweak" the product and enabled the bank to learn from the process.
As of mid October 2007, the bank had over 50 customers live on remote deposit capture, representing 75 to 80 accounts—all within one year of launch. One reason for the growth has been the focus on preparation and testing which has resulted in a quality product and a good customer experience. Another reason is the team they have assigned to selling the product. In addition to their group of 20+ lenders, they have the remote depost capture "triumvirate" which consists of an outside sales person, who understands business banking and the small business market, a second more technical person who understands the equipment, the processes and possible issues, and a third, a "geek with a personality", who can deal with people and ensures their installations and training sessions go well. The lenders help identify prospects, but call in the "triumvirate" to close and train their customers.
Abound believes the primary reason this bank has been successful has been the support of Senior Management and the Board of Directors. They understood this product was needed to survive, and they also understood that this will be an essential product in this digital age. When they first offered the product it was offered defensively. They wanted to secure what they deemed to be their "at risk" customers before the large regionals came after them. Now they find remote depost capture to be a powerful tool they have added to their strong suite of commercial products, and they are using it in their newer markets to enhance their reputation as a progressive bank and to improve their opportunities in those markets. And as further evidence of management support, CNB employees are eligible to participate in the remote depost capture referral program, which rewards them for identifying prospects and referring them to the triumvirate for follow up.
The bank decided not to offer ACH conversion and to only offer Check 21 truncation to simplify their product offering for the bank and also for their customers. This decision has only resulted in one piece of lost business. A utility company, which was already in discussions with another bank, considered CNB's product but opted for the other bank's solution since it included ACH conversion as an option.
When asked if the bank had experienced any fraud, Mr. Black responded that they have not had any issues with fraud and remote depost capture. They have a team of three senior managers in operations that review all new remote depost capture customers. If they have questions, they are referred to loan committee. The President and COO informally bless all new remote depost capture customers. Mr. Black added that most of the 50 remote depost capture customers have been existing customers or prospects that the lenders have been courting for some time, so they are quite familiar with them. Any new customers undergo a more intense credit review. They have turned down one request with which management was uncomfortable.
When asked if they have marketed the product outside their traditional market, Mr. Black responded "not intentionally". One of their customers has out of state locations and has requested they be set up on the product. The bank is evaluating this possible opportunity now.
Mr. Black noted that they had enjoyed some unexpected additional benefits from implementing remote depost capture. They had moved a couple of their higher volume check depositors to this product which has offered some relief to the Proof Department. In the past, they always experienced a high volume of checks near the end of the day that they deemed "crunch time". Now these checks are truncated at the customers' offices and an image file is transmitted to the bank, relieving "crunch time". In addition the customers enjoy the later deadlines that are possible because of the remote depost capture product.
So to sum it up, CNB's recipe for remote depost capture success consists of the following ingredients:
- Senior Management leadership and support
- A talented and knowledgeable group of people
- A well thought out product launch plan
- And a good product
None of these are easily replicated, which is probably why the research services are painting such a negative picture of bankers and remote depost capture deployment. However, Citizens National Bank has proven it can be done!
