A Shot in the Arm from Mobile Remote Deposit Capture

Numerica Credit Union recently held what amounts to a happy hour at its branches, except instead of cocktails, people were given $5 checks and shown how to use phones to deposit those checks. The Spokane Valley, Wash., credit union was demonstrating mobile remote deposit capture (RDC), and has found that via marketing and education, the new tech can have a quick impact on business. Nearly 500 members used the service in the first month. These users deposited 928 items that came to a total of $303,000.

The credit union debuted mobile RDC, along with mobile bill pay and text banking on September 1. The 90,000-member credit union, which has offered mobile banking since early 2011, added nearly 1,000 mobile banking customers during that first month to boost its total mobile banking enrollment to more than 12,000.

KayCee Murray, assistant vice president of development, says the pace of uptake has actually accelerated since, and the credit union is in pace to surpass September's numbers by the end of October. Mobile RDC has also been well reviewed on social media, with Facebook comments commending the credit union for offering the service that "megabanks spend millions to advertise," and commenting that the mobile check deposit capture technology is cool. "We felt like we needed to make an improvement in mobile to compete with the larger banks, and we wanted to find features that give us the most bang for the buck," Murray says, adding those features included expanding the mobile app into deposit capture, text and bill pay. The text banking and mobile RDC tech were purchased from ProfitStars, a Jack Henry (JKHY) unit. The bill payment tech was provided by PSCU, a credit union service organization (CUSO) that recently updated its bill pay tech to include one-time payments, views of payment history and tools to manage pending payments on Android, iPhone and Blackberry devices. Other than the ability to add a new payee or vendor, the mobile payment app works much the same as web bill payment. The mobile RDC service is free with a monthly limit of 20 checks.

To use Numerica's mobile RDC, users click a mobile deposit option on the mobile banking site, click on "submit" to execute the deposit and receive an email confirming the deposit was approved. "One of the things that I like about it is the deposit posts immediately. You aren't waiting for a batch program to run later in the afternoon [to update and post the transaction]," Murray says, adding there are some holds for larger deposits.

To promote the new services, the credit union held a series of live events. The "happy hour" event, called "Mobile Experience," is being repeated at branches and local bars, and will also be conducted at home and garden tradeshows. The credit union is buttressing the live events by running a series of radio ads to promote the technology.

"The 'Mobile Experience' events allowed us to get face to face with our members, and if they don't know about mobile deposit or how to use it, we can show them. Mostly, when people see the new feature and find out how it works, it's something they want to use," Murray says.

The ProfitStars mobile RDC tech is delivered to the credit union as software-as-a-service. Mobile deposit and mobile banking are integrated via ProfitStars' application programming interface to enable single sign-on. "[The integration] is necessary for a seamless experience. There has to be a base platform for what the members want to use. In this case, it's a mobile banking system that can be leveraged for folks to do all kinds of mobile finance, including mobile RDC," says Bill Phillips, group president of mobile payment solutions at ProfitStars.

Other players in the mobile RDC tech space include Mitek (MITK), which powers the tech behind providers such as Fundtech and Wausau. Fundtech offers mobile RDC via its NetDeposit Mobile Express product, and Wausau has partnered with mFoundry to provide mobile banking and deposit in a single solution. The other core banking vendors are also active — Fiserv (FISV) offers it through its Source Capture solution set that includes other remote deposit tools and back office processing; and FIS (FIS) through its Distributed Capture suite. And mobile providers such as Clairmail and mFoundry offer mobile RDC.

The popularity of the service, which is offered by a growing number of financial institutions such as JPMorgan Chase(JPM), U.S. Bank (USB), BB&T (BBT) and USAA, is rising among consumers. A recent Mobile Financial Services Tracking Survey, conducted by AlixPartners, found that nearly two thirds of consumers are at least somewhat likely to switch institutions based on mobile RDC, and Celent reports 80% of financial institutions are in some stage of development of mobile RDC.