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Small business remote deposit capture Celent 3/4 Checks are central to small business finances & will remain so for the foreseeable future. Meaningful adoption of RDC solutions by small businesses is inevitable. Highly predictable market forces will produce escalating competition as more deployers enter the market, driving down solution costs & spurring adoption. Like the US North American expansion in the 19th century, remote deposit capture (RDC) is rapidly gaining territory. But just how far & how fast will it expand? In Manifest Destiny: Small Business Remote Deposit Capture, based on 3 surveys, Broad-based adoption by small & micro businesses (SMBs) is the manifest destiny for RDC, & will come about in large measure over the next 3 years. Banks with large branch footprints have long had a stranglehold on small business financial services. For those willing to think & act differently, remote deposit capture will change that. Although as many as 60% of US financial institutions have remote deposit solutions, 2/3 offer the same product to large & small businesses alike. But 30% of retail banks are planning separate remote deposit initiatives aimed specifically at small businesses. Such initiatives have been rare, due to high solution cost & back office infrastructures that weren’t ready to efficiently process incoming check images. This trend should continue as a number of factors align to foster significant small business adoption through simultaneously improving client demand & eroding historic financial institution barriers. ‘2 things jump out of this research,’ says Bob Meara, Celent. ‘The first is just how important checks are to small businesses. In our survey, checks represent 75% or more of total receivables for 2/3 of small businesses. Second is the opportunity for remote deposit among the smallest businesses, 20m of them with annual revenues of less than US$1m. Banks haven’t focused there yet, but new, low-cost scanners coupled with thin client applications will open up a whole new market for banks.’ This report begins by suggesting the manifest opportunity small business RDC represents as a vehicle for low cost deposit growth, particularly given today’s challenging lending & interest rate picture. The report presents an overview of the small business landscape, highlighting the significant opportunity among businesses with revenues of less than US$1m. The report details the centrality of checks to SMBs, demonstrating RDC’s tangible value both for customers & deploying financial institutions. It then offers a forecast for SMB RDC adoption along with key variables that will impact client adoption. Finally, the report presents a number of practical suggestions for seizing the SMB remote deposit opportunity based on interviews with highly effective financial institutions.