Remote deposit capture displays mobile’s potency in banking: report
Mobile’s effectiveness in the banking sector is becoming indisputable, as deposits of physical checks decline and more consumers to turn to their smartphones for remote deposit capture capabilities, which are projected to account for approximately 33 percent of retail bank deposits by the end of this year and 50 percent by 2016, according to a report from Celent.
Celent believes that many distributed capture methods, such as image ATM and branch capture, are becoming stagnant, which paves the way for mobile remote deposit capture to reign supreme as the must-have feature for banks and financial institutions this year. Offering this streamlined service of snapping an image of a check with a smartphone for automatic deposit will also likely result in a decrease of in-person branch traffic.
“What was once a Treasury Management product is now a mainstream capability within banks’ online and mobile banking platforms for both consumers and small businesses,” said Bob Meara, senior analyst at Celent, Boston, MA. “Banks can now leverage mobile RDC to migrate branch-based deposit activity to the digital channels, reducing cost and delighting customers.
‘As check usage continues to decline, deposits are containing fewer items. Thus, mobile RDC (which is not terribly satisfying when multiple items are being deposited) is becoming increasingly relevant – not just for mobile use-cases, but increasingly all deposits.”
Convenience and trends
The sheer convenience that mobile RDC offers consumers is enough to propel it to the top of many users’ wish lists for banks and financial institutions. It also functions as a low cost solution for end users as well as banks, a notion that may help unburden the thought of less customer traffic in branches.
Celent has found that more than 70 percent of banks surveyed claimed interest in implementing mobile RDC products. This number is likely helped along by the fact that more vendors are entering this space.
Celent has also identified a number of trends that lend favor to the rise of mobile RDC. Banks are seeing that RDC-related losses are equal or below established thresholds, resulting in lower risk and compliance concerns.
Remote deposit capture will also be leveraged to reload general purpose debit cards, in addition to existing as a deposit-gathering tool.
Last December, U.S. Bank and mobile capture software firm Mitek predicted that more consumers will gravitate towards mobile imaging in banking and deposits, as those functionalities enable users to take a photo with their mobile device’s camera to participate in a loyalty program or snap a photo of a credit card to automatically populate the information (see story).
“More of an opportunity than a challenge…banks have the opportunity to seize the small business RDC opportunity with a mobile RDC solution,” Mr. Meara said. “The challenge lies in managing multiple products, effectively differentiating them and operationally managing risk.
“But, multiple vendors have introduced mobile RDC products designed to address these challenges in the past year.”
Last June, PayPal pulled the plug on efforts to roll out mobile remote check deposit, eliminating a distraction as the company continues to focus on building its digital payments business (see story).
The new scanner
Ultimately, Celent believes that mobile is embracing its status as the new scanner. Remote deposit capture will continue to become more relevant for a plethora of functions, and will help undercut risk, potential losses and wait lines at bank branches.
While this may affect in-branch business, the financial sector will ultimately save money. According to the Celent study, nearly 90 percent of surveyed banks did report any losses until 2013 in regards to rolling out RDC tactics.
The ball now remains in major financial institutions’ courts, as they have the power to introduce more consumers to the technology and streamline banking processes.
“Among larger banks, Chase, USAA and Wells Fargo all have done a superb job offering highly usable products, seamlessly integrating them into online and mobile banking platforms and promoting their use effectively,” Mr. Meara said.
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York