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ICBA Survey Shows Community Banks Reengineering Payments Operations to Serve Small Businesses

Community Banks Implement Check Image Clearing at an Unprecedented Rate

Washington, D.C. (Oct. 11, 2007)—A new survey by the Independent Community Bankers of America (ICBA) finds that community banks are leveraging technology and electronic payments to serve small business customers and extend their market reach. Further, community banks are implementing check image clearing and settlement at an unprecedented rate. These are among the principal findings of the 2007 ICBA Community Bank Payments Survey. More than 1,100 community banks responded to the survey, yielding a response rate of 13 percent.

"Community banks are aggressively using technology to deliver competitive electronic banking services to their bread-and-butter small business customers," said Viveca Ware, ICBA director of payments and technology policy, in releasing the survey. "Remote deposit is emerging as an anchor product strengthening the relationship between community banks and their business customers."

Survey results confirm that, as a whole, community banks are vibrant, tactically nimble, and able to radically reengineer their payments operations to become more efficient and competitive. Additionally, they readily examine and implement new product opportunities as a result of efficiencies gained through technology.

Remote deposit capture was cited as a top strategic objective. Over 20 percent of respondents offer merchant remote deposit capture with another 45 percent planning to do so within two years. Community banks offer services to small businesses in other ways as well. The survey found that 72 percent of respondents currently offer ACH origination services to their business customers, and 11 percent plan to do so soon.

Check image clearing and settlement is also a top strategic objective among community banks. Nearly 90 percent of community banks will offer check image clearing and settlement by 2009. "These findings clearly substantiate that community banks are embracing check image exchange and are well positioned to lead and respond to this dynamic payments environment," said Ware.

The survey also found that debit cards are the most important payment product for community banks with 94 percent of community banks reporting they offer these convenient cards.

The biennial survey was launched in 2005 by ICBA's Payments and Technology Committee to track community bank payments trends and strategies. The committee, formed in 1976 and comprised of 22 community bankers from banks of various asset sizes, guides ICBA's efforts on a myriad of payments and technology fronts.

Find summary results for the 2007 ICBA Payments Survey

For journalists wanting a copy of the summary results, please contact Bill Grassano directly at 202-821-4457 or bill.grassano@icba.org.