ORLANDO, Fla. (Sept. 28, 2011) – Four in ten consumers with an interest in mobile banking say that the ability to make deposits via their smartphones is the top factor in selecting or switching banks, illustrating the dramatic impact that technology is having on the banking industry as it looks for opportunities to grow in today’s lackluster economy. The ability to take a picture of a check for deposit is also important to bank customer satisfaction, according to AlixPartners LLP, as 81% of mobile remote-deposit-capture (RDC) users say they are “extremely” or “very” satisfied with their bank, compared to 72% for non-mobile RDC users. That’s according to a comprehensive paper, “Mobile Remote Deposit Capture: Changing How consumers Bank and How Banks Compete,” released here today at the RDC Summit by AlixPartners LLP, the global business-advisory firm.
“Today’s mobile-oriented consumers are embracing smart phone technology in a way that is revolutionizing banking,” said Bob Hedges, managing director at AlixPartners and co-lead of the firm’s Financial Services Practice. “And, our research indicates, no new mobile capability is proving more disruptive than mobile remote-deposit-capture technology, the ability to use a camera-equipped smartphone to make a deposit.”According to findings in the paper, of consumers who are “somewhat” or “more likely” to switch banks to get access to mobile features, 43% chose mobile RDC as the top feature, nearly twice the rankings of other mobile features, such as the ability to evaluate account balances (28%), pay bills remotely (28%) or access account histories (23%).In addition to driving consumer bank choice, RDC, the study finds, is becoming an attractive and compelling feature in any mobile-banking offering, as illustrated by these findings:
The percentage of bank customers “extremely” or “likely” to adopt mobile RDC has doubled to 18%, from 9% in 2009.
The top reasons customers adopt mobile RDC include the urgency to have their checks deposited for safekeeping, their need for cash and ease of use.
Mobile RDC adopters deposit 25% more checks than non-mobile RDC bank customers.
Among customers who used mobile banking in the past year, those who use mobile RDC are less likely to switch primary banks.
“Consumer adoption of mobile banking is having a significant impact on how they interact and ‘do business’ with banks,” said Teresa Epperson, managing director at AlixPartners and co-lead of the firm’s Financial Services Practice. “Traditional channels such as branches, online banking, ATMs, mail and call centers are being challenged by the rising preference for smart phones and tablets. This phenomenon is changing not only how consumers bank, but also what customers expect from their banks and, ultimately, with whom they choose to bank.” The study also finds that more than 40% of adult Americans expect to have a smartphone within the next two years, and that by the end of the decade, smartphone technology will be essentially ubiquitous. With aggressive smartphone adoption setting the stage, the study, along with further analysis by AlixPartners, points to strong a market potential for mobile RDC in the future:
By 2016, a 38% penetration is expected among adult Americans, vs. just 2% in 2011, with the highest adoption among consumers between ages 18 and 34.
2.1 billion checks are projected to migrate to mobile RDC from other channels by 2016, with adopters depositing 73% of their paper checks via mobile RDC.
- Industry-wide cost savings of $1.6 billion projected based on 2.1 billion checks migrated by 2016.
“Viewed in the context of a broader suite of mobile financial services capabilities, imaging technology, such as mobile RDC, fundamentally re-wires how banks engage with customers, and achieve higher levels of consumer engagement, retention and satisfaction, as well as operational efficiencies,” said Hedges. “Mobile RDC could prove to be one of the most important retail-banking innovations of this decade and will be a key factor in determining the winners and losers in retail banking.”
AlixPartners, through the recently acquired Mercatus LLC, has been tracking and evaluating consumer banking behavior and preferences, and more specifically, the adoption and growth of mobile financial services since 2008. The AlixPartners Mobile Financial Services Tracking Survey, formerly known as the Mercatus Mobile Financial Services Tracking Survey, has been conducted semi-annually with an online panel of U.S. consumers ages 18 and older. The study captures several emerging trends in how consumers use their mobile devices to manage their personal and financial lives. The research also explores consumer banking channel behaviors and preferences, as well as the decisions and criteria consumers use to choose their primary banking provider. The latest survey was fielded in May 2011 to an online panel of more than 3,000 consumers over the age of 18, and it provides much of the content for this newly released paper, “Mobile Remote Deposit Capture: Changing How Consumers Bank and How Banks Compete.” The paper was sponsored by Mitek Systems Inc., a leader in mobile-imaging applications using smartphone cameras for check deposits and bill payments.