UPDATE: As reported here, Ally has now announced its new generation of apps. And yes, the apps include RDC! the feature is called Ally eCheck Deposit.

The rush to add remote deposit capture to mobile banking apps seems to have ratcheted up.

Bank Innovation has learned that Ally Bank will add RDC to its mobile app later this year. Simple will also add RDC “soon.”

The reason for the hustle for RDC is that banks that don’t have it are increasingly seen as not offering a sufficient range of mobile services. Ally Bank’s recently updated app, for example, received a storm of angry comments and low ratings for not offering RDC.

In giving the app one star of five in the iTunes App Store, one consumer wrote: “Ally offers great perks such as money back at certain retailers [and] interest bearing checking accounts, but to have a mobile app that doesn’t [have] the ability to deposit checks… what’s the point? To be a purely Internet based bank, you’d think they’d be ahead of the curve in terms of technology, but this app demonstrates none of that.”

The RDC process, simply put, is this: A user takes a photo of a check. The image is encoded and sent to an image processing system that is attached to a bank’s core system. The system analyzes the photo and uses OCR (optical character recognition) software to read the information on the check, including handwriting. The check is approved or not, and then added (or not) to a user’s account. Finally, the user needs to be notified that the check is accepted and reflect the addition in his account balance.

The benefits of RDC to customers are convenience and accelerated access to funds. The benefits to financial institutions are reduced processing costs, and for FIs with few (or no) branches, an expanded reach.

Even banks that offer RDC, such as US Bank and Wells Fargo, get slammed by smartphone-using customers complaining that it doesn’t work perfectly. Chase, which was a pioneer in offering RDC as part of its mobile app, is suffering from negative complaints since its recent iOS update and took its app offline this past weekend to work on it.

Say what you will about ornery iPhone owners who only review an app when they’re angry about it, but it’s clear that customers want RDC and they want it now. Banks that don’t offer this service with their mobile apps appear as though they will face increasing pressure from customers and suffer brand damage.

So what’s the holdup? Why doesn’t every major bank offer RDC? David Albertazzi, a retail banking analyst from Aite Group, points out four possible implementation obstacles.

1. The certification process, where items are approved and added to deposit accounts, is complex. What criteria need to be met? Is the photo good enough? Approval must happen fast enough to allow on-the-spot customer notification.
2. There are a variety of image file formats that can be used. In an effort to simplify matters, the FDIC set a standard image format called X9, but there are even multiple versions of the X9 format.
3. Integration into existing solutions. How does check imaging fit into existing online and mobile platforms? Is real-time approval of funds possible with the core system?
4. Addressing risk is more difficult. Was an item submitted twice? Know Your Customer concerns come into play here.

There are also possible training hurdles. Do customers need to be educated how to take pictures properly? Do bank employees need training with the back end processes?

On top of these challenges there is the matter of cost. Banks tend to buy turnkey products in order to cut down on in-house IT time and costs, according to Albertazzi, and the price, generally tiered according to volume, can be high.

Customers want it, customers complain when they don’t have it, and other banks are offering it, so the pressure is on the banks that don’t to bite the bullet and implement RDC. Clearly, some banks are doing that now.