Call 2013 the breakthrough year where, suddenly, a mobile banking feature leaped into must- have status, as another feature – once much hyped – continued to fail to win significant adoption.
As for the must have, the name is awkward, but in 2013 mobile remote deposit capture emerged as an essential as credit unions raced to add it to their mobile menu, said Doug Brown, a senior vice president at financial tech giant FIS.
The advantage of MRDC: It lets any smartphone owner make deposits from the convenience of an armchair or a desk. Snap a photo of the front and the back of a check and, just that easily, the deposit is made.
That is a game changer and, for many credit union members, it is eliminating their chief reason for visiting a branch. MRDC also now enjoys more successful deposits, mainly because smartphone cameras have gotten so good.
Sharper image quality has immediately translated into better check images, said multiple sources. Those successes, of course, spur yet more consumer use of MRDC.
What about fraud? Since the member retains the check, some credit union executives have fretted about criminals depositing the same item multiple times, and in 2013 there was one widely reported case of a man looting Bank of America in Kentucky in exactly that way.
But that case proves a contrary rule: MRDC use in fraud is rare. "We see little to none," said FIS' Brown.
Alan Bernstein, president of Vertifi, the technology subsidiary of Eastern Corporate Credit Union which provides MRDC to a lengthening list of credit unions, said, "This is totally contrary to what we have experienced in the three years we have provided MRDC." He, too, said fraud was rare: "We could count the instances on one hand."
The upshot is that "MRDC use keeps growing. We do not see that changing," said Robb Gaynor, chief technology officer at Malauzai, an Austin, Texas-based developer of mobile apps for credit unions.
As for the feature that continues to be in a holding pattern, it is the mobile wallet which, just a few years ago, seemed primed for fast adoption. Now, at year end 2013, usage continues to be anemic, said experts.
Why? Fingers point is many directions. Apple has boycotted near field communications, the so-called "secure element" in smartphones that some had seen as a springboard for mobile wallets. Isis, the wallet initiative founded by three leading mobile carriers (AT&T, T-Mobile and Verizon), launched nationally as 2013 ended, but so far consumer interest appears to be tepid, said experts. Google Wallet also has sputtered as the search giant keeps reinventing it, but without finding an audience, said experts.
The one possible bright spot for wallets: CU Wallet, a credit union-owned initiative, formed in mid-year and it continues to gain credit union partners (over 30 had signed up by year end, said Paul Fiore, a founder and CEO).
The intent is to provide mobile wallet functionality that credit unions can build into their mobile banking apps, or possibly offer as a standalone app. That tool will let members make purchases at retail with their phones and the hope is also to use the wallet as a way for merchants to offer members who opt in appropriate deals, discounts and rewards. CU Wallet presently is slated to roll out in Q1 2014, said Fiore.
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