Matt Wilcox Pro

It would be so much easier if all customers adopted the same new technologies, all at the same time, and if we knew it was coming, say, a year in advance, so we’d have plenty of time to plan and implement the appropriate strategies.

But customers are all over the place. Some want to talk to a teller; some like the ATM; some use a computer; some use a smart phone; and some holdouts still use phones plugged into land lines. And, of course, there are those who use any combination of the above.

Long gone are the days where the only way to bank was the bank’s way. More and more, banking is consumer-driven. Today banks must cater to an increasingly diverse groups of customers who expect access on their own terms.

Nowhere is this more apparent than in mobile banking, where the latest innovation is mobile Remote Deposit Capture (RDC). Perhaps you have seen the Chase ads that show customers photographing and depositing checks with a smart phone. That’s how it works—at least for advertising purposes. In actual practice, it’s more complicated, but still appealing for to the tech-savvy segment of your customer base.

On the practical side, mobile RDC offers a win-win for banks and customers. It’s easy for smart phone owners to use, and it provides substantial savings to financial institutions. If we play our cards right, it may even become a profit center.

A Javelin Strategy & Research study estimates that an in-person, in-branch transaction costs about $4.25, a call center transaction about $1.29, and an ATM transaction about $1.25. By contrast, an online and mobile banking transaction costs, respectively, about 19 and 10 cents. That’s a compelling financial argument for implementation.

Right off the bat, banks save when customers use mobile RDC, but some banks charge for the service. First Tennessee and U.S. Bank charge 99 cents per scan. It remains to be seen if they’ll be able to keep that up, since there’s no charge for other transaction types.

On the consumer banking side, recall that a few years ago some banks began charging less profitable customers a fee for each live teller use. The idea was to drive them to less costly (for the bank) ATM or online transactions. (Or, in some cases, to drive them away, the idea being that bank profitability would increase either way.) At least initially, the public did not welcome the policy. Imagine how irate some customers might be were they now required to pay for interactive transactions. There may be a lesson in the fact that, not long ago, market demand forced banks to give up charging for online bill-pay.

If charging for mobile RDC turns out to be impractical, creating service packages could accomplish the same thing and make customers feel good about getting bundled services at a discount. This could be especially attractive for small businesses that process a lot of checks. Mobile RDC, bundled with account management and document imaging and storage, will save them time and money by eliminating numerous trips to the bank. The same principle would work for other organizations as well, such as booster clubs, charities, and other organizations that process a lot of checks.

Many analysts are split over how quickly mobile technology will become more widely adopted. A new report suggests that as smartphones develop more multifaceted payment methods, more consumers are likely to accept mobile technology and electronic wallets as a primary payment system.

The study, conducted by Pew Internet, reveals Americans are becoming more comfortable using their smartphones for a variety of financial transactions. One in ten consumers have made charitable contributions with their smartphone, and more than one-third access online banking services through their mobile device, research found. Forty-six percent of current app users also buy new apps with their smartphones. Although several industry professionals agree that mobile banking is growing, some say that the use of mobile phones to make contactless payments may be stalled due to security concerns.

Although there was a sizable amount of excitement after the Google Wallet was unveiled, adoption has been slower than accepted. The device allows users to input their credit card and bank account information into their mobile device to make contactless payments at retail locations that are equipped with near-field communication technology. Isis, a new payment method that is expected to be introduced by Verizon, AT&T, T-Mobile, Visa, American Express, Discover and MasterCard, is expected to be received with similar hesitation.

Experts are split on the future of electronic wallets, with some saying consumers are ready for the switch and credit and debit cards may become obsolete. According to the study 65 percent agreed with the below statement:

“By 2020, most people will have embraced and fully adopted the use of smart-device swiping for purchases they make, nearly eliminating the need for cash or credit cards. People will come to trust and rely on personal hardware and software for handling monetary transactions over the Internet and in stores. Cash and credit cards will have mostly disappeared from many of the transactions that occur in advanced countries.”

However, 33 percent said that security concerns have made consumers too distrustful of mobile devices and do not expect electronic payments to gain enough traction in the future to eliminate the need for credit and debit cards. Other analysts say that while security concerns are a real concern among Americans, adoption may also be slow because not enough consumers own smartphones as of yet, although this may change in the future.

Mobile banking is quickly becoming one of the features customers factor in when shopping for a new bank. Mobile banking platforms add a new layer of convenience for on-the-go consumers, allowing them to inquire into their balance and transfer funds. But the results of a new report show that a new mobile banking feature may be one of the most sought out benefits influencing consumers’ banking decisions.

According to a study conducted by global business advisory firm AlixPartners, 39 percent of respondents cited mobile offerings as an important reason for switching to a new bank. In addition, 32 percent of consumers who defected from their primary banks in 2011 and are already mobile banking customers said mobile offerings were a significant attribute versus 6 percent of non-users who switched to a new bank.

In addition, customers who switched banks for mobile platforms cited mobile remote deposit capture features as the leading mobile offering they were interested in. The survey shows the number of consumers who said the ability to remotely deposit a check played a central role in their decision to switch banks increased 22 percentage points to 65 percent, up from 43 percent who gave the same response during the second quarter of 2010.

“Moving forward, consumers’ mobile behavior and expectations will continue to rapidly evolve,” said AlixPartners financial services practice managing director Theresa Epperson. “Financial services providers need to recognize the growing importance of rapid development and deployment cycles for mobile offerings, in order to both keep pace with consumer expectations, as well as to maintain relevance with today’s consumers who have an insatiable appetite for mobile-oriented innovation.”

Mobile banking adoption is expected to increase from its current 15 percent of customers to roughly 50 percent by 2016, giving financial institutions the opportunity to capitalize off a growing market and affording consumers the chance to choose a bank that offers a wide variety of benefits and convenience.

“Clearly, these devices’ extraordinary value to consumers has raised the bar on what consumers expect from their financial services providers and placed greater importance on the role of mobile banking in bank selection,” said AlixPartners financial services practice managing director Bob Hedges. “Those financial services providers that focus on mobile offerings as competitive differentiators will be winners in the future.”