The use of mobile phones for more advanced banking services like online account opening and remote cheque deposits is skyrocketing among US consumers, according to new data from Andera and Celent.
In 2013, hundreds of thousands of Americans skipped the trip to a branch and used smartphones and tablets to switch banks and to apply for additional accounts online, according to a new report from Andera, which operates a hosted online and mobile account opening and loan application platform.
"Today, 24% of our customers' online applicants are using smartphones and tablets to apply for new bank accounts. That's a 50% increase compared to a year ago and it reflects a broader trend," says Andera's CEO, Charlie Kroll.
While it's widely known that consumers are choosing to perform routine banking transactions via their mobile devices, it's important to note that they're also using their mobile devices to establish new relationships and to apply for additional products, he says.
"The data proves that Americans want to open accounts using their mobile devices but that doesn't mean that they're succeeding," says Ying Chen, Andera's SVP, product management. "It's critical that institutions streamline data entry requirements and leverage native mobile features like cameras and touchscreens to make things easy."
Similar headaches are apparent for the large number of US banks that now offer remote deposit capture technology to their customer base. According to data compiled by Celent, some 20 million consumers used mobile RDC last year compared with 10.9 million in 2012 and only 2.2 million in 2011. The analyst house predicts the mobile user base will increase to 33 million this year, 47 million in 2015, and 61 million by 2016.
However, there has also been a small but increasing level of losses that is directly attributable to RDC. These losses appear to be steady among commercial accounts, but growing among retail banking accounts.
"Risk and compliance were banks' top commercial RDC priorities for several years," says Bob Meara, senior analyst with Celent's Banking Group and author of the report. "With FFIEC compliance projects largely completed, priorities have shifted back to growing the business. Now, it's the retail banks' turn at managing RDC risk, and it takes a whole new set of tools."