Pinnacle Financial Partners illustrates how banks are using remote deposit capture, which enables customers to take photos of checks on their smart phones. Check deposit using the technology has surged – 63% compound annual growth between 2014 and 2006, when the Nashville-based bank first offered the service. On the other hand, interest by consumers and businesses in paying bills and opening accounts using the technology hasn’t yet materialized.
“The footprint for a bank definitely expands when you offer mobile because clients can be anywhere when making a deposit,” says David Sturdivant, Pinnacle’s manager of treasury management services. However, while the bank has evaluated offering mobile bill pay and account opening services, it has no plans to implement them. “We’re not hearing demand for it,” Sturdivant says.
The number of U.S. consumers using mobile RDC will climb to 62 million this year and 87 million in 2016, doubling adoption by 44 million consumers in 2014, according to a recent report by Celent. Adoption is also rising among small businesses and commercial users. Celent projected remote deposit capture will account for a third of retail bank deposits by year’s end and half by 2016.
The challenge for bankers, however, has been to encourage customers to expand their use of mobile access beyond making deposits to other activities such as paying bills and opening accounts. Only a few financial institutions, such as Bank of the West and Radius Bank, have so far made that leap.
These banks had to overcome the problem of fuzzy images on smartphones, which causes transactions to be rejected. And bringing together vendors to revamp platforms required the skills of a matchmaker lining up a blind date, according to Jamie Armistead, executive vice president of digital channels for Bank of the West.
The San Francisco-based bank hired Fiserv and GIF Technologies to integrate the bank’s platform for Scan to Pay, a mobile bill pay service using Fiserv’s technology that produces clear images, reducing “the chances of image rejection to almost nil,” Armistead says. Scan to Pay uses a process that analyzes imaging quality and image processing on devices to capture mobile images of bill stubs.
“Other services require taking a picture, processing the picture through a server and then obtaining feedback from the service,” Armistead says. “Doing image quality analysis on our system speeds the process because we’re not transmitting and then waiting for a response from the server to know if an image is usable.”
In addition to the technical challenges, Bank of the West faced the need to help first-time users understand how to use the new services. “More of the ‘ahas’ and challenges were on the user side,” Armistead says. “It was a different sort of process for people. Peeling off a bill stub and taking a picture of it – they say, ‘Whoa, wait a minute, I can now do that with a bill?’ So, getting the user experience right was really important.”
During pre-launch testing, Bank of the West considered various names for the link allowing users to add a payee. It dismissed using its marketing name for the service – Scan to Pay – and Fiserv’s trademark name – Snap-to-Pay – because neither explained the service simply and clearly for users. The bank went with “take a photo of a bill stub” for the name of the link.
It also created a video for the app demonstrating how to tear off a bill stub and how to hold the device over the bill stub for a photograph.
Bank of the West is also working on technology allowing customers to take photographs of their driver’s licenses for opening accounts remotely, but it doesn’t yet have vendors lined up. “We need to broker some of those conversations,” Armistead says.
Radius Bank does offer that account opening service as part of an overhaul of its digital banking platforms last year using oFlows, Bottomline Technologies’ cloud-based platform. Enabling customers to use smartphone cameras to scan their driver’s licenses provides most of the information the bank needs for opening new accounts, making the process less cumbersome for consumers, says Robert Landstein, executive vice president and chief information officer for the Boston-based bank.
“The big technology breakthrough was around the ability to take a picture of the barcode on the back of the driver’s license in order to prefill the new account application when using a mobile phone or tablet,” Landstein says. “We recognize that, when you are using a small-format factor like a telephone to open an account, it is hard to type in all of that information that is required.”
Radius also overcame the hurdle of customers taking blurry photographs with their devices. Technology from Bottomline Technologies and FIS enables users “to take clear pictures using the autofocus on the phone or tablets,” Landstein says. “If the picture does show up blurry, it is presented to the user first before submission and then the client could retake the picture.”
Expanding digital services has paid off, according to Armistead, who says Scan to Pay has contributed to a more than 450% growth among active mobile users at Bank of the West. “Digital is one of the principal ways to drive that engagement and adoption. So, when you are looking at a home equity loan to renovate your kitchen, Bank of the West is on your mind. We see that it does translate into real hard-dollar value with our customers.”
Mr. Burritt is a contributing writer to BAI Banking Strategies based in Greensboro, N.C.