SAN DIEGO — Financial institutions this year have shown greater interest in marketing to "mobile-only" consumers, and mobile deposit is becoming the preferred way to load prepaid cards and deposit checks.
In January, Mitek forecasted that both trends would occur this year, and made other predictions about mobile in 2014.
In a mid-year look at its prognostications, Mitek's chief technology officer Mike Strange evaluates how well the company has predicted mobile's path so far and what may lie ahead for the rest of the year.
Prediction No. 1: In 2014, financial institutions will start to market to mobile-only users.
Mitek predicted that consumers are starting to think about mobile channels first and a growing population will abandon traditional banking relationships altogether, opting instead to never set foot in a branch.
That call is coming true, said Strange.
"Current research indicates that mobile banking is fast becoming the preferred method for many consumers to manage their finances. As such, FIs of all shapes and sizes are focusing their attention on 'mobile-only' customers — but they could be doing more to meet mobile customers from the first moment."
Prediction No. 2: Simplified mobile enrollment will more than double completion rates.
Snapping a picture to open an account is much more convenient and will double mobile enrollment totals in 2014, forecasted Mitek.
Strange said it is too early to tell if the company is on the mark here.
"Evidence suggests there has been an increase in the volume of mobile enrollments and the use of mobile banking services generally, but there isn't enough available information to show that drop-off rates are decreasing at this point."
The increase in volume puts even more pressure on FIs to simplify enrollment for mobile-first customers, Strange said.
"Consumers that own both a smartphone and a tablet are more likely than the average customer to open an account via their mobile device. As smartphone and tablet adoption increases, so does the likelihood that mobile enrollment via simplified mobile channels will increase as well."
Prediction No. 3: Mobile deposit will be the preferred way to load prepaid cards and deposit checks.
Strange said that not only is the prediction accurate, Mitek may have underestimated the impact of mobile deposit — expanding beyond prepaid cards to create opportunities for non-traditional banking organizations
"In the last six months, multiple tech and telecom companies have thrown their hats into the banking arena with offerings of prepaid cards and the ability to reload these cards via smartphones and mobile deposit. This may have a bigger and more meaningful impact on the industry as a whole than what we originally predicted, since these companies have the advantages of offering bank-like services without the regulatory oversight of traditional FIs."
Strange pointed out that many of these tech and telecom companies already have a strong customer base that is very mobile-centric, "and this prediction may go much further than just being a preferred method for deposits."
Prediction No. 4: By the end of 2014, the majority of Americans will have access to mobile deposit.
Mitek predicted that nearly every financial institution in the country will offer mobile deposit by the end of the year as they fight to remain competitive.
Strange said this is a correct call.
"Evidence suggests that mobile deposit is quickly becoming the go-to method for remote deposits — and the number and quantity of transactions continues to increase. The demand for mobile deposit will only continue to increase as corporate and small business clients demand mobile deposit service. Also, FIs will get even better ROI from these segments."
New prediction for 2014:
Strange sees FIs beginning to adopt "smart limits" to regulate deposits and asset availability for customers.
"2014 is the first time that we can confidently say that smart limits are becoming a best practice, but there is room for improvement," shared Strange. "Forty percent have a one-size-fits-all approach and there is still a lot of variability in the industry. As of today there is still no single standard as it relates to how FIs determine deposit limits, funds availability and risk. In the next six months this will start to change."
