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Remote deposit capture is tipping point to mobile banking profitability: panelist

March 22, 2011

Citi's iPhone app

ORLANDO, FL – While mobile banking tends to be a consumer engagement tool, new features such as remote deposit capture provide financial institutions with the opportunity to generate profits, according to a panel at CTIA Wireless 2011.

The panel was moderated by Sylvain Maquet, partner at Greenwich Consulting, New York. He estimated that there are currently 10 million people using mobile banking in the United States, with Bank of America reporting 3.5 million mobile banking users nationwide, but the panelists all agreed that figure is set to explode.

“The hockey stick curve is absolutely occurring in mobile banking—supporting mobile used to be an option for banks, but no longer,” said Scott Moeller, chairman and CEO of MShift Inc., Fremont, CA. “New banks and financial institutions coming online in mobile banking are hitting their first-year adoption targets in weeks, if not days.

“Their initial expectation is a certain percentage of online banking users being converted into the mobile environment, but soon the mobile environment will be the primary channel—mobile banking will be your banking mechanism,” he said.

“A great example of something you can do in the mobile environment that you can’t do online is remote deposit capture, which really is the tipping point for mobile banking—it is absolutely something banking customers want.”

Historically mobile banking has been seen as a cost to the bank, and vendors such as MShift have to demonstrate how they are saving them money, for example, by cutting down call-center costs.

Mr. Moeller believes that mobile banking can become a profit-generator for banks, not an expensive consumer engagement tool they must invest in to keep up with the competition.

“I see mobile deposit capture as a methodology that can become a profit center,” Mr. Moeller said. “Some banks are considering charging for it.

“As we’re walking forward into this new era of fees, customers don’t mind paying $2 for an ATM, so they probably wouldn’t mind paying $1 for remote deposit capture to avoid having to go to the bank branch.”

Citi never sleeps on mobile
Citigroup Inc.’s Citibank is placing mobile at the center of its customer engagement strategy, with cost-cutting and revenue-generation significant fringe benefits.

The financial services giant has applications for Google’s Android and Apple’s iPhone and iPod touch, a mobile Web site that is optimized for smartphones and Citi text banking, which lets customers check their account balances, view recent activity and see credit card statements via SMS. In addition, Citi is integrating social media into its mobile platforms.

“It is a fundamental requirement for every bank to have a really good app—not an average one, a great one,” said Rich Clow, managing director of global consumer mobile development at Citi, New York. “Compared to all of the other apps users are downloading, it has to be relevant and it must have a fun element.

“While Citi has been a little quiet lately, we’re trying to use mobile as a competitive advantage—we have to do some internal plumbing before we go live with the next phase,” he said. “Regulators say their piece, but consumers want to use mobile banking in different ways, so we are trying to walk that fine line.”

Citi does not currently offer remote deposit capture, but the feature is definitely on its radar.

For remote deposit capture, banks have to make it simple to connect a mobile experience into its item processing.

“For us, remote deposit capture really is an imperative,” Mr. Clow said. “If we can get people to find an interesting product and a great user experience, maybe they don’t need a branch.

“We can become the digital bank of choice, win the hearts and minds of consumers and make mobile the channel of choice,” he said.

Mr. Clow said that the question is how are you as a bank ready to consume or expose services?

“A bank doesn’t have to worry about maps and location integration as part of our core functioning, so we have had to upgrade to make the consumer experience much more relevant,” Mr. Clow said. “What is the right mix of highly secure transaction types we need to support in mobile and what is the right user experience?

“What is coming with downloadable apps is lots of profiling attributes available to us, which is a better indicator of who you are, where you are and what you are doing than just a log-in to an Internet portal,” he said. “Customers prefer some of these apps to walking into a branch or using the full Internet site.”

For security purposes, Citibank requires its customers to have an online account and download the banking application from its Web site, not from an app store.

Mr. Chow said that Citi is focused on how mobile dovetails with its social networking strategy. It is faced with responding to customer comments in real time.

“How can we be fast and nimble and address customers’ concerns immediately, rather than twice a year, responding to new feature requests and fixing things that are broken,” Mr. Chow said. “Banks need to have a platform where they can enable a lot of different mobile opportunities and connect it to the rest of their channels.

“I foresee decreases investments in our other channels—in a couple of years we will have found ways to shave other channels and reinvest it in mobile,” he said. “Mobile is replacing the leather wallet bill fold—it is going to be present, in the now, where’s the best deal, where’s the best shop, what’s the best price.

“Mobile commerce is where we need to be.”

The CTIA Wireless 2011 panel

Final Take
Mr. Chow

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Dan Butcher is associate editor on Mobile Commerce Daily and Mobile Marketer. Reach him at

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