3 ways remote check deposits level the financial playing field

By Kelly Richardson

Please don't get me wrong. I do actually enjoy going to my neighborhood bank on occasion. The tellers are friendly; the atmosphere comfortable; the coffee fresh and caffeinated. But, admittedly, I try to avoid the trip whenever I can.

I use the virtual banking services whenever possible to avoid navigating traffic and standing in line at my local branch. So you can imagine my excitement when I discovered that the best online banks are now moving in the direction of remote check deposits.

If you haven't heard, this phenomenon allows you to make check deposits across the internet using a connected deposit device or even just your own mobile phone. You heard me right--there are wikis and widgets that allow you to make deposits directly into your high interest savings accounts from the comfort of your own home.

How does remote check deposit work? There's an app for that!

Making a remote deposit is surprisingly easy--even those with technophobia will find it an intuitive process. Simply log into your checking account online and use a bank-provided scanner to "read" the check.

The bank's program captures the dollar amount of the check through a complex hand-writing analysis program that compares the number to the amount that's spelled out. Once the transaction is complete, simply verify the amount and the transaction is placed on the deposit schedule. Simple, right? But wait--it gets better.

If you don't want to trouble yourself with buying or renting remote check deposit scanners, some mobile phones have a free app that you can download to do the scanning work for you. Simply take a picture of the front and back of your check and transmit the image to your bank. The deposit goes into your high interest savings account in the same way. The remote deposit app is typically limited to smartphones and not available with all models.

3 advantages of remote check deposits

Remote check deposits into high interest savings allows the best online banks to compete with established brick and mortar financial institutions in three unique ways:

1. Big branch networks are no longer an advantage

BusinessWeek reveals that remote check deposits eliminate the advantage of having a large network of brick and mortar branches. Online deposits mean that smaller banks can still gain market share without physical locations. Their customers can make deposits into high interest savings accounts from anywhere in the world.

2. Small banks can communicate with big banks

Remote check deposit allows all banks, large or small, to communicate in the same language. Once an image of the check has been received by a small bank, it can easily transmit the image to a bigger bank to confirm check amount and account balance.

3. A growing remote capture market means more opportunity

According to Celentre, a research and consulting firm specilizing in the financial technology industry, 75 percent of all U.S. banks and 40 percent of all U.S. financial institutions had adopted remote deposit capture by the end of 2008. That figures to 382,000 users and scanners with a 72 percent annual growth rate.

Who is using remote check deposit?

More banks than you might think. Of course, the major players are already in on the action--Wachovia, Citibank and Chase, just to name a few. But more of the best online banks are getting into the action. Financial institutions such as Presidio, Whitney Bank and M&T are a few of the smaller banks moving to this new technology.

Check with your current bank or conduct an Internet search for banks offering remote check deposits. You may never have to visit a physical bank branch again.