Mobile Remote Deposit Capture · 2012. 6. 20. · Mobile Remote Deposit Capture: Driving...

Mobile Remote Deposit Capture: Driving Profitability and Customer Retention Presenters: Mary Monahan, EVP/Research Director, Javelin Patrice Peyret, CEO, Plastyc Mobile Banking and Commerce Summit: June 2012

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Mobile Remote Deposit Capture: Overview

2 © 2012 Javelin Strategy & Research

The mobile deposit rush is on. The strong consumer desire for mobile deposit. The ROI of mobile deposit. Banker perceptions that inhibit mobile deposit. Strategies for the underbanked and prepaid.

Mobile Deposit is an Acquisition Strategy

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Key Message


One in five mobile bankers uses mobile remote deposit capture.


The Mobile Goal: Bring iPod-like Simplicity to Mobile Banking



Show Consumers Why Mobile Banking is Practical and Can Make Them Safer

Top 3 Reasons Consumers Do Not Use Mobile Banking

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0% 10% 20% 30% 40% 50%

The cost of data access on my wireless plan

Security of mobile banking

I don't see the value of mobile banking

Percent of Consumers Q6: Security of mobile banking - You indicated you do not use mobile banking. For what reasons do you not use mobile banking? (select up to three)

March 2010, n = 2,373 Base: All consumers with mobile devices.

© 2010 Javelin Strategy & Research © 2012 Javelin Strategy & Research

Move Aggressively from ‘View’ to ‘Do’ -- and Sprinkle in Some ‘Wow’

Mobile Banking Functionality Offered at Leading U.S. FIs

© 2012 Javelin Strategy & Research


The Mobile Deposit Rush is On!

• USAA • Chase • US Bank • Citi • PNC Bank • PayPal • Charles Schwab • West Virginia FCU

Key FIs Offering Mobile Deposit

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Chase Redefines Mobile Banking (and Romantic Things to Do on a Honeymoon)

Chase TV Ad: Newlyweds Deposit Wedding Checks

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1 in 4 Consumers Wants Mobile Deposit

0% 10% 20% 30% 40%

All Consumers

Small Financial Institutions (Under$30MM)

Mid-sized financial institutions($30MM-$750MM)

Large Financial Institutions (over$750MM)

Desirable or verydesirable

March 2011, n= 1,880, 1,183, 1,818, 4,267 Base: All consumers with mobile phone who bank at large FIs; All consumers with a mobile phone who bank at mid-sized FIs;

All consumers with a mobile phone who bank at small FIs; All consumers with a mobile phone.

©2011 Javelin Strategy & Research

Q41. Q42. Banks or credit unions can offer a service that enables customers to deposit a check by photographing it with the camera on their mobile phone, then sending the image to the bank through a mobile-banking application. How desirable is this service to you?

Consumer Desire for Mobile Deposit (by FI size)


Target Key Segments First Desire for Mobile Remote Deposit by Key Segments

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0% 20% 40% 60% 80% 100%

All consumers

18 to 24

Small business owners

More than $150,000

iPhone users

Mobile bankers

Very desirable 5 4 3 2 Not desirable at all 1

Q42: Banks or credit unions can offer a service that enables customers to deposit a check by photographing it with the camera on their mobile phone, then sending the image to the bank through a mobile-banking application. How desirable is this service to you?

March 2011, n = 4,267, 345, 257, 471, 462, 749Base: All consumers, all consumers age 18 to 24, all

consumer who are small business owners, all consumerswho have an income of $150,000 or more, all consumers

with an iPhone, all consumers who are mobile bankers.© 2011 Javelin Strategy & Research© 2012 Javelin Strategy & Research

Banker Survey

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More Than Half of Surveyed FIs Plan

to Offer Mobile Deposit in the Next Year

0% 10% 20% 30% 40% 50%

We plan to offer, but are not surewhen

In 7-12 months

In 3-6 months

Within the next three months

Percent of financial institutions surveyed April 2011, n=19

Base: All financial institutions which do not offer mobile remote deposit

capture. Q1: When does your financial institution plan to offer mobile remote deposit capture?

Time Frame When Financial Institutions Plan on Offering Mobile RDC

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Everybody Wants to Offer iPhone, Android

Capabilities

0% 20% 40% 60% 80% 100%

Unsure

Other

Windows

Blackberry

iPhone

Android

Percent of financial institutions surveyedApril 2011, n=9

Note: Low n size bu trends may be drawnBase: All financial insitutions that plan to offer mobile

remote deposit capture in the next 12 months.© 2011 Javelin Strategy & Research

Q2: Which of the following mobile operating systems does your financial institution plan to support?

Operating Systems That FIs Plan to Implement

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1 of 3 Bankers Worries About Security of

Mobile Deposit Security Concerns Associated with Mobile Deposit

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The ROI of Mobile Deposit

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Lower Processing Costs Enhance ROI Traditional vs. Mobile Costs



Branch and ATM Visits Should Decline After Implementation

0% 20% 40% 60% 80% 100%

Transferred funds online using a wire transfer through a money service business (such as Western Union)

Used a mobile phone to transfer funds to another individual

Transferred funds online using a wire transfer

Logged into an online banking session to transfer funds to another individual

Received a financial alert by text message (SMS)

Conducted mobile banking

Received a financial alert by e-mail (i.e. low- balance alert)

Transferred funds online between your own accounts at your primary bank to another institution

Logged into the website for online banking

Percent of consumers

Desire mobile deposit

All consumers with financial products who own a phone

March 2011, n= 4266, 1010Base: All consumers with financial products that

own a phone., all consumers with financial products that own a phone likely to use mobile

remote deposit capture.

Q42: Banks or credit unions can offer a service that enables customers to deposit a check by photographing it with the camera on their mobile phone, then sending the image to the bank through a mobile-banking application. How desirable is this service to you? "Very desirable" and "desirable" only, other options apply. Q18.or19 Please indicate the last time you conducted each of the following financial activities with your primary bank.

Banking Activities (by Those Who Desire Mobile Deposit)


MRDC Strategies for the

Underbanked: Leveraging Prepaid Cards

Co-Presenter

Patrice Peyret, CEO, Plastyc

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Mobile RDC for Underbanked

• 60M underbanked in the US (source: FDIC) • Have to go to check-cashing stores:

– Waste of time: going to the store twice a month – Waste of money: high fees (except for certain printed

checks) • Higher penetration of smartphones among

under-banked than the US average – People with no fixed phone line and ISP at home – Their mobile phone is main online access and

mission-critical

Opportunity to save time and money for 60M people in the US

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The Last Remaining Gap between Prepaid Cards and Checking Accounts

• General Purpose Reloadable prepaid cards are… – …all “ACH-routable” i.e. “look” like checking for bank

transfers – …most with FDIC insurance – … many with Reg E compliance (for cards able to

receive tax refunds and other government funds) – …many with bill pay services including paper

checks

Mobile RDC coupled to Prepaid Cards = Checking Account

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Check Depositing is the Last Stop

• They are only missing check depositing to be 100% functionally equivalent to a checking account

Mobile RDC coupled to Prepaid Cards = Checking Account

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=


Remaining Challenges for MRDC + Prepaid Cards

• Customers more tempted to “cheat” – Photoshop a check, cash it, empty the card, disappear – Cash a large valid check twice:

• Through MRDC into a prepaid card • At a check cashing store immediately afterwards • … and go underground

• Customers less vetted: availability of MRDC will be a prime motivator to open a prepaid card account

Security requirements are more stringent than with regular checking accounts

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When/How to Expect MRDC for Underbanked

• Major prepaid issuing banks are currently vetting anti-fraud measures

• Anti-fraud measures will include – Geo-restrictions – Velocity and amount limits – Dissuasion through random phone calls during check

capture • MRDC for underbanked consumers with prepaid

cards will likely deploy progressively via pilot tests

Early 2013 should see a number of MRDC-prepaid offerings for the underbanked

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Key Takeaways

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Key Takeaways

• Mobile deposit is an acquisition strategy – but not for long.

• It can create revenue opportunities and cut costs.

• Integrated, targeted rollouts will have stronger appeal.

• Mobile deposit and prepaid can build a bridge to the underbanked.

• Educate consumers – and build fraud mitigation tools into the solution. 26

Mobile Remote Deposit Capture

Javelin Strategy & Research provides strategic insights into customer transactions, increasing sustainable profits for financial institutions, government, payments companies, merchants and other technology providers. For questions regarding access to Javelin research please contact: [email protected] © 2012 Javelin Strategy & Research. All rights reserved. This data was provided to accompany a report which was licensed for use by the original subscribing client only. The data and report is protected by copyright and other intellectual property laws. Licensors may display or print the content for their use only, and may not sell, publish, distribute, re-transmit or otherwise provide access to the content of this report without permission.

Thank You

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Mobile Remote Deposit Capture · 2012. 6. 20. · Mobile Remote Deposit Capture: Driving...

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