Image Processing Tech Limitations Could Stymie New Mobile Banking Apps

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Financial institutions have been experimenting for a few years with new and creative ways of taking advantage of smartphone cameras to provide mobile banking services. They started with mobile check deposit and have moved on to mobile capture of mortgage documents and drivers’ licenses.

But there are factors that limit how widely mobile cameras can be used to advance financial services. Technology analysts say gaps in processing and user interfaces will have to be overcome before mobile image capture can be optimized as a way to expedite myriad types of consumer financial transactions. Bob Meara, a senior analyst at Celent, says adoption of remote deposit capture — or using a smartphone camera to take a photo of a check to facilitate a deposit — has grown quickly after a slow start. But more exotic uses of mobile capture, such as snapping a picture of a bill for mobile bill payment, have not been as popular.  “I would say adoption has been lackluster,” he says.
 
Meara says technology to enable fast processing of the complex documents required for lending and other credit products has not developed, particularly for forms that contain customer data that has to be processed and analyzed in a bank’s back office. “Data capture of forms in a highly automated fashion without intervention is not there yet," he says. "As the use cases multiply, so does the complexity of handling things in the back office,” he says.
 
Meara says mobile image capture shares the same limitations of any image-enabled workflow — the required data must be captured, validated and managed. “Mobile image capture adds uncertainty to the process because of the variability inherent in the device. That means that no matter how sophisticated the image analytics, someone in a back office is going to have to resolve exceptions. There will never be 100% straight-through processing,” he says.
 
In the case of check processing, for example, Meara says between 20% and 30% of deposit attempts are rejected for a variety of reasons. Most of these exceptions are handed in the back office, and about 15% are rejected because the capture application doesn’t have confidence that the image is usable, resulting in a need to re-take the image and try again. “For checks, though, banks already have back office workflows to process exceptions. Adding mobile capture to the mix didn’t impose a need to create a new back office organization and workflow — it just modestly added to the volume of the work already being handled because mobile RDC volumes in the absolute are rather low.”

Adding bill payment capability to a mobile banking platform may create the need to train call center staff to assist with user queries and problems, but because all data input belongs to the customer, there is no workflow. “Add image capture to biller statements for the purpose of adding new payees more easily for consumers, and one needs a workflow and staff to handle exceptions," Meara points out. "That’s because no application is going to automatically capture and validate required information from biller statements 100% of the time accurately. So who in the bank is going to fix them? How fast must exceptions be resolved? You get the idea.”

Jim DeBello, CEO of Mitek (MITK), which provides the technology that underpins a number of new mobile imaging applications, such as a product from Progressive Insurance that allows shoppers to receive an insurance rate quote by snapping photos of their driver’s license and a car’s vehicle identification number (VIN), says it is building tech that allows data captured by a mobile camera to be processed for wider delivery of financial services, such as mobile bill payment.

The company also pointed to research from AlixPartners that forecasts mobile photo bill pay adoption could reach 33 percent by 2018. “More important than simply capturing and storing a document is the ability to read that document, extract fields and make the information digital and actionable, and that’s what we’re looking to do,” DeBello says.

Beyond processing, there’s also the screen size of mobile devices that inhibits functionality. “The mobile phone is not much help in lending and credit applications because of its size,” says Christine Pratt, a senior analyst at Aite Group.

Pratt says that tablets might work better for such applications. “Tablets are large enough and they’re already used for branch automation,” Pratt says.

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