Andy Shank Aug 8, 2019

Three ‘Es’ to easy mobile deposit adoption: engagement, experience, education

Mobile adoption growth is great news for banks. The technology represents one of a handful in a wave of digital advancements that delights customers and decreases bank costs. That said, mobile adoption is not growing as fast as one would expect.

Why is adoption so s-l-o-w?

We heard from 4,600 consumer respondents about their perceptions, preferences and barriers pertaining to mobile banking and mobile deposit. What we learned points to enormous opportunity for banks, specifically with mobile deposit. Among our findings:

  1. Everyone’s a prospect. All ages and usage levels are interested in mobile deposit, ranked as a “most valued feature” across the board. For this reason, engagement with all customer segments is a must.
  2. They don’t know what they’re missing. Convenience and simplicity drive usage. It seems that once consumers see how easy it is—and actually experience the app—they embrace the value of mobile deposit. Otherwise, they remain comfortable visiting an ATM or branch.
  3. Change is hard. Barriers to mobile deposit usage are complicated: more emotional than logical and seemingly driven by confusion about how it works and fears over security. As is the case whenever disruptive technology emerges, education reduces confusion and anxiety.

For banks, the savings are huge—mobile deposit costs just 8 cents per transaction, versus 80 cents at an ATM and $8 via teller. Nor can you overstate the convenience of mobile deposit for customers.

Though mobile deposit boasts abundant opportunity, adoption won’t happen on its own. Engaging and educating customers and giving them no-risk incentives to try it will let them experience its convenience and allay their security fears.

Mobile app usage: Lots of room for growth

Only about a third of respondents use a banking app on a phone or tablet with some regularity: a minimum of three times a month. So despite the fact that 77 percent of Americans have a smartphone, two-thirds do not use mobile banking or only use it a few times a year.

While mobile banking numbers will certainly rise organically, banks face a call to expedite adoption by actively steering customers to their app—and then encourage its regular use.

We recommend a strong, ongoing focus on engagement and education that makes customers aware of mobile banking’s convenience and security. We also suggest app enhancements to keep up with customer expectations and needs, since users have grown increasingly impatient with mediocre mobile access. Add more user-friendly features—and remind all customers of mobile banking’s benefits.

Banking maintenance? Yes. Moving funds? Not so much.

Across all age groups, our respondents expressed high comfort levels with checking account balances or recent transactions and transferring money between accounts. Of course, these features were the first developed for mobile banking and thus the most familiar.

But with actually moving money outside their banks—a more recent mobile addition—usage and perceived value drop. Just 44 percent of respondents use bill pay and consider it valuable while 40 percent said the same for mobile deposit.

Banks, then, must reinforce the simplicity and security of these transactions. Showing a customer how to do it during onboarding goes a long way to overcome perceived confusion and emotional barriers.

Mobile deposit = much opportunity

Across all ages, survey respondents ranked deposit as a valued mobile banking feature. It’s no surprise that younger customers use it more: Nearly 60 percent of respondents ages 18 to 24 use and value mobile deposit, closely followed by other age groups. Of respondents age 65 and over, a full 36 percent utilize mobile deposit.

Objections demand education

As humans generally don’t like change, survey respondents deferred to their habits. When asked “Please let us know why you do not use the mobile deposit feature within your mobile banking app,” the number one answer was, “I prefer to visit my branch or use an ATM.” But that just doesn’t ring true. After all, who really likes to visit the branch or ATM when they could avoid it?

When you look at this answer in context of others, it’s really about fear and insecurity. Twenty-two percent of respondents said they weren’t sure how to use mobile deposit; 18 percent expressed security concerns; and 12 percent worried about transaction errors.

These responses reinforce the opportunity to educate about convenience, time savings, ease of use and security. They also highlight how a more “emotional” and reassuring response on the part of the bank can ease worries customers feel about transaction miscues.

Even those who use mobile banking regularly (three or more times a week) didn’t know how to use mobile deposit. Incredibly, younger and more tech-savvy customers also shared doubts about using it: more proof that you must show and tell.

What does this mobile opportunity mean?

Our survey illuminates a significant opening for mobile banking and deposit growth via smartphone or tablet. But that growth won’t happen on its own. What works with adoption of these disruptive technologies is engagement, experience and education. Comforting customers who don’t use (or rarely use) a mobile app or mobile deposit requires direct effort on your part, promoting exploration and trial. 

For non-users, this means not only helping them install the app, but also promoting a very modern means of trial as through a secure, risk-free mobile deposit activation program.

The opportunity is clear. Carpe diem! Or, if you and you customers prefer: Carpe deposit!

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Andy Shank is vice president, Fraud and Risk Product Management, for Harland Clarke.

For more articles like this, check out our recent executive report: Banking's digital transformation.

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