Thinking About Mobile Deposit Capture?
There’s an awful lot of interest in mobile remote deposit capture right now, and that’s only likely to increase. A September 2011 Celent FI survey showed that 80% of the financial institutions surveyed either have, or plan to deploy mobile deposit. Given that interest level, I’ve had the opportunity to work on a number of mobile deposit initiatives, whether it’s looking at best practices, negotiating contracts, developing requirements, selecting providers or just doing market research. In the course of these activities, I’ve talked to a quite a few financial institutions about their plans for, or experience with, mobile deposit.
While there are only tidbits of publicly available information currently, there are some things to look at in terms of interpreting adoption rates, when disclosed. As you might imagine, adoption of mobile deposit can be all over the map since so many factors impact it – availability by risk profile, transaction limits, cost/fees, ATM density, branch density, mobile banking penetration (online banking penetration if dependent), device support and marketing. Many of these are FI specific decisions, so keep these in mind if and when you see published adoption rates, and of course when projecting your own.
One of the interesting things about that survey is that the bulk of FI’s that have, or plan to deploy mobile deposit were the over $10B crowd, while those still considering or without plans at all were firms with under $10B in assets. I find this difficult to understand because if anything, it’s the latter camp that would get the most out of this solution as it compensates for their smaller branch and ATM networks.
Let me share a little story with you to put some perspective on this. Granted, it’s a sample size of one, but is the exact rationale I have heard from some institutions under $1 billion in assets who do have plans for deploying mobile capture. When I attended my oldest child’s college orientation last June, 400 miles away from home, there were several financial institutions present to enroll new students for accounts. Most were national banks and all had a local presence, while our primary FI did not. Rather than opening an account with one of those firms, I showed her how she can use her cell phone to make deposits with her current FI should a generous aunt send her a check. She has been using it ever since, allowing her to maintain her relationship with the same FI even though they have no local presence (it helps that they reimburse for ATM fees when she makes withdrawals). Mailing a deposit would not occur to her as the last time she mailed something was Flat Stanley back in second grade – she barely even does email anymore, just Facebook and SMS. Also, when I excitedly demonstrated it to her, she just shrugged nonchalantly as if it were commonplace, expected. Many FI’s offer a “campus checking” account. The rationale for that is similar to the rationale for offering mobile deposit – you want to catch them young with the hope they’ll stay with you through their earning years.
Keeping that thought, I’ll never forget a remark I heard a couple of years ago with respect to mobile banking in general from the COO of one of the largest credit unions in the country that “people over 62 don’t use cell phones.” All I can say about that is ignorance is dangerous to your business. Even if this statement were true, what happens when those customers or members die? Their heirs inherit what’s left, which gets transferred to the FI that younger generation is using because they have made the investments that demographic expects. By the way, the fastest growing segment for smartphones is the 55+ age group, with more than half of new mobile phone purchases by that group being smartphones.