Mobile remote deposit capture set to alter bank branch economics

Mobile remote deposit capture set to alter bank branch economics

Strong consumer interest in mobile remote deposit capture technology will dramatically alter the current deposit-taking activities of retail banks and provide a viable roadmap to banks pursuing 'thin branch' strategies, according to a study by consultancy Mercatus.

According to the study of 2100 US consumers, close to two thirds (59%) of today's mobile banking customers are likely to adopt mobile remote deposit capture if the technology is offered by their banks.

Bob Hedges, Mercatus managing partner, says the technology has the potential to be a killer app for branch banking.

"With consumers placing a premium on convenience, mobile RDC has the potential to significantly change retail banking's business model by providing a way for people to do basic banking without branches," he says. "Retail financial service companies have the game-changing opportunity to provide both increased convenience and lower costs. Mobile RDC definitely levels the playing field across competitors."

Consumers quizzed by Mercatus were enthusiastic about the convenience and accessibility of mobile phone-enabled deposits. However security fears and the already dense concentration of branches and ATMs were seen as limiting factors to mass uptake.

Despite this, Mercatus forecasts that with mobile RDC, more than 1.5 billion cheque deposit-making transactions will be eliminated from US bank branches by 2014.

The study found that consumers likely to adopt mobile RDC, today, are responsible for approximately 30% of branch consumer deposit volume.

Says Hedges: "With only moderate adoption of Mobile RDC by consumers, banks can expect to see dramatic reductions in the volume of branch deposit transactions. The incredible convenience benefit to consumers is equally matched by the strategic cost structure benefit to banks."

Comments: (1)

A Finextra member
A Finextra member 12 February, 2010, 14:33Be the first to give this comment the thumbs up 0 likes

I am amazed that the US would opt for fixing only half the problem. Keep the paper and dematerialise only part of the process?! The UK faster payments and the Direct Debit schemes allow consumers to pay bills and move money with less interuption to normal life than anything the US has come up with. This isn't really innovation but a short sighted attempt to band-aid a bad process.