Mobile Banking: Apps That Don’t Get Lost in Translation

Nowadays consumers expect to be able to conduct banking business via their mobile device anywhere, anytime but sometimes the service doesn’t live up to their expectations. One reason is because banks  make the mistake of trying to convert their online offerings directly to a mobile app, which doesn’t work well. The service gets lost in translation. About 25% of customers get frustrated by having to key in lots of data on a small device, and they bail out of the transaction.

Vendors such as Mitek are developing products that take the friction out of the experience. More than 1,000 banks already license Mitek’s Mobile Deposit technology, which enables consumers to use their mobile device to photograph a check and deposit it remotely into their bank account. Mitek also offers a Mobile Photo Bill Pay product. Both products have been extremely successful, and around 12 million customers use them.

Building on that base, Mitek recently launched a Mobile Photo Account Opening product enabling customers to open a bank account on their mobile device. In fact, the product won Best of Show at Finovate Fall 2013. All customers have to do is scan the front and back of their driver’s license with their mobile device, and the relevant data is automatically captured by bank’s system. Streamlining the process not only leads to a quicker process and a better consumer experience, but banks also have an opportunity to capture more account relationships.

Mitek supports the format of the driver’s license of all 50 states in the U.S. because most have a bar code on the back. Over the next few months, the company is planning to introduce functionality to capture and digitize information from a passport and other official documents as well.

Through a partnership with Experian, Mitek’s technology helps banks meet mandated government and industry regulations including the USA PATRIOT Act, the FATCA Red Flags Rule and E-Signature requirements. The information captured from the driver’s license is checked against Experian’s databases. Banks can choose to run a relatively simple Know Your Customer (KYC) check, or a series of more sophisticated fraud detection models. For the riskiest 5% of the population, they can run additional verification processes such as out-of-wallet, knowledge-based authentication.

According to Mitek Chief Marketing Officer Scott Carter, deploying mobile account opening isn’t a huge burden for banks. A lightweight software development kit sits in the bank’s customer environment, and the product can be delivered as a hosted service or behind the bank’s firewall. Banks pay for a subscription and a per transaction fee, so they can ramp up their investment as the volume grows.

Besides being a convenient self-service option, the technology can enhance the customer experience in the branch. Representatives can greet customers with a tablet in hand, and help them through the account opening process. At the same time, they can try to cross sell products and services and encourage them to migrate to lower cost channels, thus enhancing the ROI.

No doubt about it: mobility solutions are a hot topic of conversation in banking circles. Banks are trying to figure out how to use apps to service their customers better, but it’s not a case of “build it and they will come”. If their apps don’t actually fulfill customers’ needs and they aren’t easy to use, all the time and effort in developing them could be a dead loss.