Camera phones have pretty much put a crimp in the sale of cameras as most people are happy to trade off photo quality to the convenience of being able to snap a picture and post to Facebook or send to a friend via an email instantly. The quality of camera phones keeps improving, too, so those trade-offs are not really as onerous as they once were.
But there’s one thing that camera phones are breathing new life into – and that’s checks. Who knew? The one form of payment that is in steep decline got a new lease on life thanks to a technology that eliminates the friction associated with depositing a check. Thanks to mobile imaging technology, consumers don’t even have to drive to an ATM to deposit a check – the last real advance in check deposit convenience. All they have to do is snap a picture of it and off it goes to the bank.
Mitek and its technology is the leader in this space and reported its earnings last week (Jan. 29). What’s most notable about what was shared by its CEO Jim DeBello, is not just how this technology is being used today, but how it has evolved beyond the form factor that everyone loves to hate in payments – the check.
“With consumer penetration approaching 20 percent, we see tremendous upside for mobile deposit here in North America and even more potential from the U.K. and Brazil as these countries are expected to adopt image check deposit legislation in 2015 and 2016 respectively as we have done here in the United States and in Canada,” DeBello said.
That’s where Mitek’s strategy has aligned with what they’re hearing from the industry. And their stats back it up.
Mitek estimates that 33 million Americans used Mitek’s mobile deposit products in 2014.
“We invested in breakthrough mobile Web technology that broadens our markets by allowing consumers to take photos from their smartphone browser. Mobile Web is currently in several pilots with major customers and lastly we recently added a new board member with identity verification and facial recognition technologies and MIT credentials,” DeBello said.
Mitek’s latest solution, Mobile Photo Account Opening, allows a consumer to open a bank account with their photo or driver’s license. DeBello estimates that the global identity management marketplace will grow to $7 billion by 2017.
Mitek’s customers – banks and other financial institutions – cite convenience as a large draw to its products. A mobile-first mentality is what Mitek is helping its FI customers embrace so that they can keep up with the mobile-first preferences of their consumers, and particularly with respect to banking.
“We understand that consumers want to simplify their lives which is why we’re continuing to invest in innovations to make the experience of conducting a financial transaction or signing up for a new service or product as easy as possible on a small screen,” DeBello said. “Smartphones and tablets have already had a large impact on how consumers interact with businesses. It’s amazing that the majority of Americans are now using their smallest screen to engage online and we believe the percentage will only increase,” he said. “By 2018 Gartner expects 90 percent of all phones to be smartphones and we expect their proliferation to further revolutionize the way in which people interact with their money, their financial institution and almost any other transaction.”
DeBello reported that mobile accounts for 35 percent of all bank interactions and has become the most common method for interacting with the bank services. Citing figures from Wells Fargo’s recent report, he said the bank said it has 14 million mobile customers — a number that has grown from zero in just five years. Mobile depositing is quickly growing as the most rapidly adopted channel across the banking industry.
“Research also indicates that preference to make a deposit with a teller has dropped from 54 percent to 34 percent in 2014 and we certainly think mobile deposit was a part of that,” DeBello said. “Even Bill Gates referenced the convenience of mobile deposit technology and his plans to deliver mobile banking innovations to people in poor and emerging countries.”
As the mobile depositing market grows, Mitek’s focus has developed beyond mobile depositing and evolved into imaging that’s used for capture and account opening using an app. DeBello anticipates that this addition will help increase mobile depositing by 30-50 percent for new bank accounts and credit card applications using what Mitek calls the “innovating account opening technology.” With mobile depositing, it’s about ease of use for its consumers and that’s what Mitek and the mobile deposit industry is moving toward. From another perspective, Mitek has also introduced a mobile Web option that enables consumers to use a mobile browser to get the same Web experience on mobile without downloading an app.
“It’s evident that in financial services going mobile is table stakes for institutions both large and small and the mobile only way of doing business is obviously prevalent in other industries as well,” DeBello said. “With mobile Web our mobile imaging process is accessible without an app and enables our customers to achieve higher conversion rates and capture those shopping online for new financial or insurance services using mobile devices.”
And Mitek has seen this in its own products as well as through its banking clients like CitiBank, which has been able to leverage products like Apple Pay to show how one payment innovation can be integrated into another. And that’s what really can propel both innovations: by leveraging the best features of both into one seamless customer experience.
“Working with the partner, we demoed an innovative credit card acquisition solution and featured our mobile photo account opening in combination with the proximity based offer and Apple Pay, it was a great way to show how our technology can be integrated into a broader offering in addition to being an innovative standalone product,” DeBello said.
And that’s the trick in mobile, in mobile payments and in mobile banking. But, like DeBello put it, mobile depositing and mobile banking are becoming synonymous in the banking industry.
“Mobile deposit has become a part of the mobile banking vocabulary and mobile banking is table stakes for any competitive bank,” he said.