Fiserv Inc. is offering a mobile remote deposit service, a move that could rapidly expand the adoption of a technology that is becoming a must-have feature at many banks.
A handful of financial companies offer mobile remote capture now, but payments executives expect this to change, very soon.
"Quite frankly, our clients were clamoring for it," said Gary Brand, the director of source capture optimization at Fiserv.
The Brookfield, Wis., banking technology vendor is set to announce Wednesday a service that lets people deposit checks remotely by photographing them with a smartphone and sending the images to the bank.
Brand said some bank clients are already planning to make the feature available to their customers in the next few months, though he would not name them, and he expects to see others follow suit. "I think this will probably be the fastest-growing sector ever as it relates to remote deposit capture."
Others share that view.
"Because of the demand that banks are experiencing from their customers for these types of services, banks have been working very hard over the last year to figure out ways to mitigate risk and bring that capability to customers," said Teresa Epperson, a partner in the Boston bank consulting firm Mercatus LLC.
Fiserv initially is offering mobile remote deposit capture as a stand-alone service that banks can offer their customers. It is planning to integrate the capability later with its existing suite of mobile banking tools.
Brand said banks of all sizes have expressed interest in the service and that their inquiries helped the vendor decide to make mobile remote deposit capture available sooner rather than later. The vendor works with more than 2,000 financial institutions representing about 130,000 people using its existing remote deposit capture services, a ready-made customer base for the new service.
"I think they're moving forward with the separate offering because that's how they can get out as quickly in the marketplace," Epperson said. "There's sort of a great race right now among the vendors to be in production providing these capabilities."
Analysts say they expect several large banks to make remote deposit services available to their mobile customers in the next year, though only a few do so now.
USAA Federal Savings Bank made the capability available as part of its iPhone application last year and has since added it for smartphones running on Google Inc.'s Android operating system.
In July, JPMorgan Chase & Co. added the function to its mobile banking application for the iPhone. And this month State Farm Bank, a subsidiary of State Farm Mutual Insurance Co., added the function to an update of its iPhone application and said it plans to include it in its Android app by yearend.
Brand said the JPMorgan Chase service gave the technology a boost, and that growing consumer adoption of smartphones has also stimulated interest in mobile banking programs in general and remote-deposit capabilities in particular.
Fiserv's service is based partly on a patented image capture process developed by Mitek Systems Inc., a San Diego company that was one of the first movers in the mobile remote-capture market.
It make sense for Fiserv to partner with Mitek given that the San Diego company has proven technology, Epperson said. "They're sort of like the 'Intel inside' of mobile remote deposit capture."
Mitek sees having a partner like Fiserv as a way to more rapidly expand the availability of mobile remote deposit, said Drew Hyatt, a strategic adviser to Mitek's chief executive.
The company gets contacted directly by banks occasionally but most of its leads come through its vendor partners, Hyatt said. "Our preference is to go through channel partners," he said.
Fiserv's customers have the ability to brand the application with their own look and feel, he said, as with its other mobile banking programs.
A December study by Mercatus, involving more than 2,100 Americans, found that 59% of mobile banking customers were likely to use a mobile remote deposit capture service if their banks offered it. "From a customer service strategy perspective, mobile RDC represents a great way to potentially increase your out-of-footprint deposit origination without having to build new branches," Epperson said.
She cited Capital One Financial Corp. as a banking company with a "strong national brand" but a "limited physical footprint" that potentially could benefit from offering mobile remote deposit capture.
State Farm Bank, which developed its application in-house, saw the technology as a way to increase efficiency for customers, said Andrea O'Connor, its chief deposits officer and a vice president.
"It's really about … providing as much convenience as we can for our customers," she said. "We do not have branches. We're a quasi-virtual bank."
This story has been reprinted with permission from American Banker.
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