Mobile Remote Deposit Capture: Meet the Pocket Bank

It would be so much easier if all customers adopted the same new technologies, all at the same time, and if we knew it was coming, say, a year in advance, so we’d have plenty of time to plan and implement the appropriate strategies.

But customers are all over the place. Some want to talk to a teller; some like the ATM; some use a computer; some use a smart phone; and some holdouts still use phones plugged into land lines. And, of course, there are those who use any combination of the above.

Long gone are the days where the only way to bank was the bank’s way. More and more, banking is consumer-driven. Today banks must cater to an increasingly diverse groups of customers who expect access on their own terms.

Nowhere is this more apparent than in mobile banking, where the latest innovation is mobile Remote Deposit Capture (RDC). Perhaps you have seen the Chase ads that show customers photographing and depositing checks with a smart phone. That’s how it works—at least for advertising purposes. In actual practice, it’s more complicated, but still appealing for to the tech-savvy segment of your customer base.

On the practical side, mobile RDC offers a win-win for banks and customers. It’s easy for smart phone owners to use, and it provides substantial savings to financial institutions. If we play our cards right, it may even become a profit center.

A Javelin Strategy & Research study estimates that an in-person, in-branch transaction costs about $4.25, a call center transaction about $1.29, and an ATM transaction about $1.25. By contrast, an online and mobile banking transaction costs, respectively, about 19 and 10 cents. That’s a compelling financial argument for implementation.

Right off the bat, banks save when customers use mobile RDC, but some banks charge for the service. First Tennessee and U.S. Bank charge 99 cents per scan. It remains to be seen if they’ll be able to keep that up, since there’s no charge for other transaction types.

On the consumer banking side, recall that a few years ago some banks began charging less profitable customers a fee for each live teller use. The idea was to drive them to less costly (for the bank) ATM or online transactions. (Or, in some cases, to drive them away, the idea being that bank profitability would increase either way.) At least initially, the public did not welcome the policy. Imagine how irate some customers might be were they now required to pay for interactive transactions. There may be a lesson in the fact that, not long ago, market demand forced banks to give up charging for online bill-pay.

If charging for mobile RDC turns out to be impractical, creating service packages could accomplish the same thing and make customers feel good about getting bundled services at a discount. This could be especially attractive for small businesses that process a lot of checks. Mobile RDC, bundled with account management and document imaging and storage, will save them time and money by eliminating numerous trips to the bank. The same principle would work for other organizations as well, such as booster clubs, charities, and other organizations that process a lot of checks.

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