FirstBank will soon become the first regional U.S. bank to launch mobile photo bill pay — in other words, it will let customers pay bills and add payees by snapping a picture of an invoice with their smartphones.
The $13 billion Denver bank, which has more than 115 locations in Colorado, Arizona, and California, sees this and other technologies as a competitive advantage.
The bank is somewhat unusual in that it developed its own core banking software and 12% of its employee base of about 2,100 works in IT. Most are mainframe and distributed application developers. Having a homegrown core and in-house expertise enables the bank to be nimble and make changes quickly.
"In-house application development has always been a strong philosophy at FirstBank as it gives us greater control to modify applications and interface with other applications," says Jeff Kaufman, president-retail banking. "We can respond faster to market demands."
Although fees "is a four-letter word," he says if the bank wanted to tweak its fee structure, it wouldn't have to work around FIS's or Fiserv's schedule of implementation.
"I have full control," Kaufman says.
This does come at a cost, he acknowledges. "We've accepted that increased salary cost," he says. However, it's offset by not having to pay a vendor for core banking services.
In one example of homegrown advantage, FirstBank was the first bank outside of the big three (Chase, Wells Fargo and Bank of America) to join the clearXchange person-to-person payment network a month ago.
Chase and Wells are FirstBank's primary competitors for DDA accounts, accounting for about 50% of consumer accounts. That means many people in the bank's market have already signed up for clearXchange and the bank will be able to get people onto its network quickly.
FirstBank will write its own user interface for clearXchange and aims to provide a simple and transparent process for customers.
"One thing we like about clearXchange is the settlement takes place between financial institutions, it's a minimal traffic cop," Kaufman says. Also, clearXchange doesn't store banking information, each bank protects its own customer data for in-network transactions.
In the case of the forthcoming mobile photo bill pay offering (it will be launched in the first quarter of next year), the bank worked with Mitek to co-design the feature, which will include Mitek's MiSnap capture technology. "This is the first new technology in bill pay in a long time; it's giving us an opportunity to talk about bill pay again with customers," says Kaufman, after years of stagnant adoption.
The popularity of mobile check deposit is opening doors for this simpler form of bill payment. "With the adoption of check deposit, a large subset of customers wants to use the phone and camera to conduct transactions," Kaufman says.
FirstBank has offered mobile web access to banking services for three years, and adoption has been strong. "Customers have been happy with it," Kaufman says. "That's allowed us to come later with a native app offering."
The bank launched its first mobile banking app, which it developed with consulting firm Cynergy, a little over a month ago. It hopes to move aggressively to adopt new technologies and features.
"We have a large subset of customers that want mobile functionality," Kaufman notes. "If we watch customers on online banking, there's a migration from desktop to smartphone." Roughly 15% of users enter the online banking platform using just a smartphone.
The bank continues to work with Mitek and other technology partners to stay aware of what's on their roadmaps. It's also conducting focus groups with customers to better understand what they would like to do in future iterations of the mobile app.
"We would always like to have unique functionality out there," Kaufman says.
Next month, the bank plans to release a quick balance feature for its mobile app, letting people take a quick peek with a swipe on their device. Again, having in-house development staff helps with one-off queries like this.
Kaufman can envision a time when customers do all their banking on the mobile app. For now, certain tasks are available only in the desktop version of online banking, such as reviewing bill pay history, setting up alerts, and changing contact information. "But we will likely incorporate this into the mobile app over time," he says.
As it moves more aggressively into digital banking, FirstBank continues to focus on online applications for loans and new accounts and making that experience efficient and easy. "A good number of applications each month get completed on a smartphone, so we need to always look for ways to optimize that experience," Kaufman says. "We are also focused, like others in the industry, on how to use mobile technology to serve the branches in their day-to-day activities."
Currently the bank equips its branches with iPads, for demoing purposes. What does the future hold for branch technology? "We're all trying to figure that out - everybody's watching everybody else with mobility," he says.