Hunting for the Next Big Thing in Remote Spaces
When Texas bank USAA introduced mobile remote deposit capture in 2009, nobody knew how big the tool would get and how fast. But ask credit union mobile banking experts today for the defining moment in the niche's brief history and all signs may point to MRDC.
That's because the mobile tool potentially lets users do something they could not do quickly or easily with online banking, some insiders say. For now, deposits via MRDC are bigger than deposits at ATMs. A growing number of financial institutions are on the prowl for the new tool that may bring in that next big wave of mobile banking users with some of the larger ones leading the way.
“We already see more money coming in through MRDC,” said Christopher Owens, mobile product manager at the $4.1 billion Pennsylvania State Employees Credit Union in Harrisburg, Pa.
Meanwhile, other credit unions and vendors are expecting to see a number of new innovations deployed in the remote and mobile arenas.
“I can guarantee you it won't be long before a Bank of America rolls out a virtual assistant,” said Brett Wooden, senior vice president of marketing and innovation at the $192 million Cy-Fair Federal Credit Union in Houston.
Wooden pointed to Apple's Siri and said, “Already, you can tell Siri to open an app. Soon, you will be able to tell her to ‘pay $75 to the electric company.’”
He strengthened his case by pointing to the huge investments that both automobile makers and established tech players such as Google and Apple are investing in in-car computer technology. Where better to reconcile an account with the help of a virtual assistant, said Wooden, than stuck in traffic.
The $2.5 billion MSU Federal Credit Union in East Lansing, Mich., is heading in that direction, said Sarah Bohan, vice president of corporate relations.
“We plan soon to build at least limited voice commands into our mobile app,” she said. “We will introduce new features in stages.”
In its first iteration, members probably won't be allowed to pay bills but may transfer funds between accounts, make balance inquiries and do similar actions, Bohan explained.
Add it up and voice-activated virtual assistants have much going for them in a mobile phone context, some experts say. And with the rising popularity of Siri and its competitor, Android virtual assistant apps, advocates think virtual commands will be the next big thing.
Cardless ATM Cash Access
“We believe this can be as big as MRDC,” said Chris Gardner, a co-founder of mobile payments company Paydiant Inc. in Wellesley, Mass. “It's super compelling. It is faster and easier and more secure than using a card at an ATM.”
Here's how it works: A member opens the mobile banking app, selects cardless cash access, designates an amount and an account, then goes to an ATM, taps that same selection and a bar code appears on the screen. The member scans the code with his or her smartphone, it's validated, and the ATM dispenses the requested cash.
Gardner said the service is in a pilot phase at three financial institutions with five to 10 more in a queue to get active.
“We really believe this will become very big,” he predicted.
“The mobile banking app is very impersonal. Everybody gets the same. But you already see the big banks moving towards a next gen app that will be highly personalized for each user,” said Ido Ophir, vice president of product management at Personetics Technologies, a White Plains, N.Y.-based firm that develops apps that predicts customer behaviors.
“Banks are fearful they will become commodities. Personalization will help create loyalty,” Ophir suggested.
If the app knows the user and his or her interests, who would want to leave that app for a financial institution that does not know them? Ophir said the cutting-edge financial institutions get this and it may well become a battleground in the next generation of mobile banking apps.
At the $5.2 billion Digital Credit Union in Marlborough, Mass., there is growing interest in finding ways to push appropriate marketing messages to members via the mobile channel, said Julie Moran, vice president of support services.
Industry watchers say with branch traffic down, some institutions are detecting a shift in volume from online to mobile banking. The problem is that with its small screen size, mobile is a challenging place to market in ways that do not annoy members.
Moran said DCU is using what it calls account manager tools to send individualized, custom messages, including members’ credit scores on a monthly basis – “so people want to look at it,” she noted. If a member has been just approved for a car loan or a home equity line of credit, a message will pop up in account manager.
While mobile marketing is in an early phase, the recognition is spreading that making the strategy work has to be solved.
Photo Bill Pay
“We believe photo bill pay is up and coming,” said Christopher Whalen, an e-services specialist with the $400 million Connex Credit Union in North Haven, Conn. “We don't presently offer it, but we are investigating this. We believe it will explode.”
Experts say the genius behind photo bill pay is that it uses a strong feature of the mobile phone – a high-quality camera – to do the data input that is otherwise clumsy and slow for many who find typing on glass to be cumbersome.
“Photo banking – anything with a photo – will be big,” said Mary Monahan, an executive vice president with Javelin Strategy + Research in Pleasanton, Calif.
Ralph Marcuccilli, president/CEO of Allied Payment Network Inc., a Fort Wayne, Ind.-based firm that sells a photo bill pay service currently live at three credit unions with two more in the queue, said that half of photo bill pay customers are not signed up for Internet bill pay. This may mean the product appeals to a different user.
“People use this because of the simplicity,” said Marcuccilli. “Snap a picture, put in an amount and the day you want to pay it, and you are finished.”
He said there is also is growth in where the one-time payments can occur such as to a physician dentist, or perhaps a plumber. For that consumer, paying by snapping a photo is much easier than inputting the required data to create a new payee.
Will photo bill pay take off? Adoption has been slow and so far, no money center bank has signed up. However, little by little, Marcuccilli said the sheer simplicity of paying with a snap of a lens will take off.
With a number of channels on the cusp of breakouts, experts believe what is certain is that there will be a next MRDC and the real question will be who gets to deploy it first. Advocates are convinced that those will be the financial institutions that sprint ahead of their competitors.