Saturday, September 25, 2010

Smartphone + Check = Banking Convenience

Have you noticed how slowly mainstream banks are adapting to the enhanced utility represented by smartphones? Not niche player USAA, of course: For the past 18 months, USAA's customers have been able to register for USAADeposit@Mobile, a service that allows them to download an app so they can make deposits of checks from home or office or anywhere.

The core of the service is the phone's camera. All USAA really needs to accept a deposit is the amount and the bank routing/checking account numbers at the bottom of the check. In seconds, USAA can process and confirm the deposit. Fast and easy. So why don't more banks offer this?

Chase is starting to offer such a service for iPhone users, as a matter of fact (see image above), and Bank of America is in the experimental stage. “We have to be very deliberate about how we test and how we would introduce this type of product into the marketplace,” a B of A executive tells the NY Times. As the technology gets better, and fraud detection systems improve, we'll see a lot more services like this.  Many businesses already enjoy the convenience of scanning checks to deposit, so consumer versions are not far behind.

One challenge the banks face is the multiplicity of tech platforms. After all, not everyone carries an iPhone. A second challenge is balancing costs with profit payback. How much is this convenience worth to a customer? How will adding this service enhancement affect competition? Right now the banks are weighing their options and tweaking their marketing plans in light of recent changes in financial services regulation.

In other words, we can bank on more change ahead.

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