Guarding against double remote capture deposits

In an effort to mitigate the potential risk of checks being deposited multiple times, through remote deposit capture, in-person, or both, Mitek, which specializes in mobile imaging for financial institutions, recently introduced a feature to its Mobile Deposit product designed to guard against this risk.

Mitek’s “Restrictive Endorsement” validation feature reduces duplicate presentments by finding and confirming that a phrase designated by the financial institution—such as “For Mobile Deposit Only” or “For Deposit Only at XYZ Bank”—appears in the endorsement area on the back of each check.

If the system finds that the endorsement is present, Mobile Deposit produces a high confidence score and the financial institution can safely accept the check. If the system does not find the desired phrase, it will yield a low confidence score for that particular check in real time. The financial institution can either ask the end user to properly endorse the check or the item can be automatically sent for a manual review and rejection.

The increased security allows financial institutions greater flexibility in raising dollar value of deposit by applying Smart Limits.

“I was able to preview Mitek’s Restrictive Endorsement at the RDC Summit in October and this feature is a capability the RDC industry currently needs,” says Edward McLaughlin, principal at Riverstone Consulting Partners. “Until financial institutions move to real-time, cross- channel duplicate detection of all check deposits, this feature is currently among the best tools that can be deployed in order to combat duplicate deposits.”

The website www.remotedepositcapture.com reported earlier this year that 90% of financial institutions that already offer remote deposit capture say the benefits outweigh the risks. [See “New Research Shows 90% of Financial Institutions Report Mobile Deposit Benefits Outweigh Risks and Costs”]  http://www.remotedepositcapture.com/news/New-Research-Shows-90-Percent-of-Financial-Institu.aspx

The survey also found that 80% of financial institutions using mobile remote deposit capture reported no losses.

Still, “while many financial institutions have taken additional steps to further secure the mobile channel, we can’t be naïve to what the mobile banking security challenges of the future may hold,” says Scott Carter, chief marketing officer at Mitek, reflecting on the survey results. “While losses have been relatively low, banks and credit unions have the opportunity to implement risk management best practices to isolate any high-risk transactions and lift restrictions on low-risk accounts through a targeted approach.”

To implement this feature, financial institutions need to be running version 4.2 of Mobile Deposit.