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Leveraging RDC Technologies: Mobile Imaging Isn’t Just for Checks

With more than 160 million Americans (about half the population) now using smart phones, mobile imaging has become a huge agent of change in financial services. Mobile check deposit may have been the first innovation to come from this, but it certainly is not the only one.

“The cameras in smart phones are very viable outside of simple check capture,” said Robb Gaynor, Chief Product Officer, Malauzai Software, an Austin, Texas firm that provides a back-end mobile banking engine used by hundreds of credit unions and community banks. He said recent technology enhancements, notably Mitek’s MiSnap auto-capture capability, are bolstering prospects for new applications involving the cameras in smart phones, including bill payment, account opening, customer onboarding, even regulatory compliance routines.

“We’re beginning to see the value and the impact of mobile imaging on the banking industry,” said Eric Thompson, Senior Associate at the business development firm Paysis. “It’s a real disruptor.”

Bank Bill Payment Programs Gaining
Mobile photo bill payment builds on a growing demand for electronic bill pay. According to the 2013 Federal Reserve Payments Study, 47% of Americans who used their mobile phones to make payments in 2012 were paying bills. Among the unbanked, the practice is even more common; 62% of unbanked consumers used their phones to make bill payments in 2012, the Fed said.

To date, billers have been more successful than FIs in signing up bill payers, however that is beginning to change. Research by Fiserv reveals that interest in financial institution bill pay programs grew from 21% to 33% between 2013 and 2014, and that interest is highest among younger adults (Gen X and Millennials). In fact, there are about 69 million Americans between the ages of 18 and 49 who are not using FI bill payment programs but are interested in doing so, Fiserv reports.

Mobile photo bill pay leverages the image capture technology that supports mobile deposit to convert paper bills into digital images. Instead of asking customers to enter billing information using their mobiles, data gets extracted from these images and applied to relevant fields in the mobile bill pay app. Once completed, the customer reviews the information for correctness and schedules a payment.

Consumers like using their smart phones for bill payments because it saves time – it takes about 30-seconds to set up a new payee, said Jamie Armistead, Executive Vice President for Digital Channels at Bank of the West, San Francisco. Bank of the West announced a photo bill pay product called Scan to Pay last fall, becoming the first to implement a Fiserv solution known as Snap-to-Pay. “Because the process is so quick and simple, we envision customers using this method to add new bills to bill payment regardless if they plan to pay those bills online or on their phone,” said Armistead.

About 25 banks and credit unions have gone live with Picture Pay, a mobile photo bill pay solution created by Malauzai in partnership with Mitek and Allied Payment Network, a bill-payment company. In all about 15% of Malauzai client institutions have signed on to offer the app, which has been posting double digit growth rates since it was introduced in 2012, Gaynor said.

Aite Group expects 86% of banks will be offering mobile photo bill pay going into 2016. Its research suggests the desire of banks and credit unions to market mobile banking solutions is exceeded only by their desire to promote mortgage lending.

Better Service, More Knowledge Time savings and convenience are key consumer benefits of mobile photo account opening and customer onboarding solutions. For banks and credit unions it offers improved customer service and opportunities to recreate the branch experience.

In 2014, U.S. financial services firms saw a 60% jump in the number of auto loan, mortgage and credit card applications submitted using smart phones and tablets, Javelin Strategy & Research noted in a report titled Consumers Crave Digital Account Opening Capabilities. That report also reveals that 70% of consumers planning to apply for checking accounts this year would prefer to do so via digital channels.

While digital account opening is a winning strategy for many, there are still several perceived weaknesses that financial institutions must address, explained Mark Schwanhausser, Director of Omnichannel Financial Services at Javelin. For example, many people (60% of those recently surveyed by Javelin) believe branches have an edge when it comes to answering customer questions.

According to Mobile Onboarding: Reducing Abandonment Using Photo Prefill, a report commissioned by Mitek and recently published by Aite Group, 55% of FIs either support mobile applications for checking accounts, or they plan to be able to support them this year. Additionally, 54% support mobile mortgage applications and 53% either do or soon will be accepting car loan applications created using mobile devices.

“Once a customer commits to enrolling vendors [for bill payment] their frustration with a bank has to be pretty high for them to walk away from that bank,” said Thomson

The Aite report points to numerous benefits of mobile-camera-enabled customer onboarding, beyond stickiness, whether it’s done remotely or inside a branch with teller assistance. These include: improved data quality, reduced abandonment, better staff utilization, additional sales, and improved reporting.

Gathering customer identification information in a structured fashion renders customer authentication more reliable, the Aite report noted. Thomson agreed. Considering the frequency with which consumers use the photo-taking functionality on smart phones, “It’s not much of a stretch to ask someone to take a selfie with their license,” he said.