Recorded from our UK Cheque Imaging Seminar, Nov. 25, 2020
Every year, Digital Check and our UK-based partners at the TALL Group host a seminar for British banks, covering topics from check image capture and electronic clearing, to remote deposit, to security and fraud and beyond. This year’s seminar was different in both format and subject matter, as ongoing COVID-related travel restrictions caused this event — like many others — to move to a virtual format.
COVID was also a game-changer for financial institutions themselves this year, and likewise caused many banks and their customers to migrate toward online services out of necessity. The million-dollar question is: Will it last?
Joining us for this session was Mark Forbis, a former chief technology officer at Jack Henry and Associates, and an industry veteran who possesses more than 30 years’ experience with payments systems. Mark also sits on the boards of directors at two community banks in the U.S., as well as our own board of directors at Digital Check. We asked him to share his thoughts on the past several months, as well as what to expect in the coming year as we move forward.
[Note: The comments below are condensed or paraphrased for length — the full interview can been seen in the video at right!]
[5:00] Alex Trombetta, Digital Check: Is it fair to say that RDC received an increase in interest during the pandemic?
Forbis: No doubt the pandemic put us in another situation where businesses and consumers alike were stressed to get out and travel, or obviously, some of the branches were closed. We saw a rise in RDC activities, and some of the banks really mobilized their forces very quickly to provide those services. … Just like Churchill said, to paraphrase, “Never let a good crisis go to waste” — one of things we can see happening with the pandemic is the move to digital solutions. To leverage something like RDC, I think does help the business getting those transactions out, reducing the time to travel to the branch. It should be seen as a positive move, and hopefully they’ll continue to leverage that.
Digital Check: For the audience in the UK, can you share some color with your experience as a bank board member this year? The pandemic must have brought some interesting discussions.
Forbis: I sit on two bank boards, and both of them are directly invested in their communities. This pandemic really allowed banks to shine and take an opportunity to really help out businesses that were completely stressed during this time. We did see, obviously, some move to help the customer or the business in these cases — to better leverage technology that they had. We saw some relaxed rules and controls. We even saw some changes from the regulatory environment, where they relaxed some pressure on capital, as well as debt restructuring and deferment on payments.
Overall, we saw a rise in mobile activity, RDC activity, a rise in volumes — all those are positives you can talk about. I’m proud to be a part of the two institutions that have helped their communities through this, and still are.
Digital Check: Do you have any prediction about where RDC and automation technology will go after the pandemic?
Forbis: I’m a card-carrying geek, and also a very positive-outlook person. I like to believe that through the pandemic, and through customers and banks really pushing the envelope on some things maybe they weren’t comfortable with … hopefully we’ll see a continued move toward electronification, digitization, all those things you hear about in the news talking about digital transformation. Hopefully we’ll all take this opportunity to continue to leverage technology, and I’d like to believe we won’t revert back.
I’m hopeful we can learn and continue those digital approaches, and also come up with new solutions out of this, because we saw we could, out of necessity. We could leverage artificial intelligence, maybe there will be an actual, real opportunity to leverage blockchain more efficiently, figure out better solutions for fraud prevention. I’m hopeful we won’t revert back, and hopeful that as we move out of this, there will be some new technologies that solve problems and make it easier to do business, and for banks to take care of their customers.
Digital Check: How would you characterize the increase in RDC versus the reduction in branch transactions during the pandemic?
Forbis: In not only the banks I sit on the board of, but also talking to a number of banks I’m still in contact with, the specifics I’ve seen and validated are that, in the first couple of months of the pandemic, we saw a 30 percent rise in enrollment, but a 100 percent increase in volume (for RDC). Then those numbers plateaued after about three months. So … I think we hit that new normal. And it wasn’t necessarily a direct offset to branch traffic, but certainly branch traffic is down, ATM transactions are up, and surprisingly even some debit credit card transaction volumes are up in some sectors. A lot of people have been saving quite a bit more through this time, so deposits have risen in financial institutions.
Some interesting dynamics — I’m hopeful that we will continue to move to the digital transaction. I think a lot of the banks I’m involved with are rethinking some of the processes in the branch as well. I think it’s a good time to look at that.
Digital Check: Many banks temporarily altered their policies regarding RDC to assist their customers — recurring fees, account consolidations, deposit limits, onboarding for new clients. Was this wise? Should they make some of these changes permanent?
Forbis: I do think it was out of necessity, and I think it was wise. We had to deal with — I know there’s the terms “new normal” and “unprecedented” that people get tired of hearing — but truthfully, we did have to err on the side of leniency, and we had to make some concessions, and we had to roll things out very quickly. With anything, there’s going to be some testing of the waters, pushing of the limits on fraud. I don’t think there was any widespread fraud, but I do think that this time certainly allowed for the banks to try to look at things like, “How do we roll this out, make it more frictionless, make it easier for our customer?” Sometimes when you have the project triangle where you can’t move the timeline, it creates opportunities for looking for innovative solutions, so I believe those policy changes should probably be kept in place.
Again, I’m also hopeful that we’ll see some new tools, especially in the area of AI and machine learning, that help us with velocity and volume and things like that … I know there’s some really nice solutions out there today, but I think we can up our game in those spaces, and I think that’ll be good.
Digital Check: Given the other challenges of the pandemic, we assume that facilitating deposits to reach the bank is positive, and that RDC can be part of enabling that FI in compliance. Have banks you’ve worked with seen an improved P&L as a result of that?
Forbis: I think certainly the banks have seen some improvement for other reasons. Not necessarily for RDC and fee income — I think we saw a relaxing of their approach to try to get customer adoption. I also think that through these times we saw the banks more focused on, “How do I solve a problem for my customer, and if I’m able to help them quickly I’ll worry about fee income a little bit later.” Kind of taking a long-term approach to the relationship.
I saw a number of examples of those things, where not only customers of the banks I’m involved with but also non-customers, heard about some things that the banks I’m involved with were doing, and moved over to that bank because they saw that they were more focused on helping them through the problem. Whether it was solving a problem with their deposits, or getting a small business loan through this pandemic. So I think a more long-term approach is what I’ve seen, and that’s typical for community banks.