Ramping Up for Remote Capture: Remote Capture Seen as Everything from a Major Plus to Just Another Commodity. the Risks of Fraud Dictate Careful Adoption
2007; American Bankers Association; Volume: 99; Issue: 1 Linguagem: Inglês
ISSN
0194-5947
Autores Tópico(s)Crime, Illicit Activities, and Governance
ResumoKnow your customer is a term known mainly in the anti-money-laundering arena. But now the phrase has acquired important meaning in the area of remote deposit capture for merchants. Ann Marie Mehlum's Summit Bank, a $70 million-assets bank in Eugene, Ore., was an early adopter of RDC, and in more than one sense. Summit began offering the technology not long after the advent of Check 21 made it practical. But it also began offering RDC only nine months after the young bank opened its doors. At its core, RDC is an express ticket into the bank's deposit column, and bankers taking part in a recent ABA Banking Journal roundtable discussion about RDC and Check 21 clearly understand that this is like a key to the gunroom--not something you place in just anyone's hands. We have been very careful about who has says Mehlum. We probably have 40 business clients who use it, at this point. And there are about another 40 who are really glad that we have it, but they don't actually want it yet. don't think we have a client using it that someone in our bank doesn't know pretty well, and hasn't known for a long time, she continues. We know that what they're doing with remote deposit capture is what they say they are doing. Fraud is a key concern for many bankers looking at RDC technology, including the members of ABA's Community Bankers Council taking part in the roundtable. When a member of the roundtable commented that RDC was an area rife with fraud potential, this sparked a lively back and forth among the bankers. An edited excerpt: Lynda Messick I think the reason that internet and e-mail fraud works is that, every day, somebody goes on the internet for the first time. Then all of a sudden they are ripe for the picking. That's how I'm looking at RDC. There's always going to be somebody, somewhere, who's a risk. Maybe not in my market because, as in Ann Marie's market, there's no anonymity. But when you get into a metropolitan area, there's a huge turnover; there's lots of anonymity, and people are able to move and fade between businesses. I think that's where the frauds will start figuring out how to work the system. Mehlum Our vendors set up software controls. And there is actually substantial contact with RDC customers. Even though they are not physically coming into the bank I know that the bank's staff is talking with them and working with them all the time. So we haven't lost touch with them that way. In part because this is still fairly new, in some ways we have more touch with them.. Messick Do your operations people have specific RDC reports that they review? Mehlum Yes. I know they are looking at reports that indicate if there is something wrong. Messick A few years ago there was a huge amount of fraud on the merchant side of credit cards that many banks began underwriting their prospective merchants. Do you see that happening with the RDC program? Mehlum It's in our policy, yes. Pat Redmond We're going to do that too, as we get into RDC. Fraud is going to be harder to catch, but it's still about a check, even though it's the replacement document. Knowing your customers is key. Mehlum One of the big concerns has been someone trying to deposit the same check twice. Although I expected it to happen inadvertently, strictly in error, we haven't had one. Redmond What instructions do you give your RDC customers regarding handling the checks they've scanned? Mehlum To keep them in a confidential place and destroy them within seven days. Warren Luke Why can't they program something in, so when you put it through, it cancels the check? Mehlum A big X or something on it, right there? Luke Yes. That's what we should go after the manufacturers for. (Later, Luke suggested this idea to a vendor speaking at the ABA meeting. The vendor loved it, and said he'd take it back to his development experts. …
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