NEW YORK (MainStreet) —Quick now, what is the one technology that presently is revolutionizing banking as we have known it - killing off branches, cutting down on accont opening frauds, and in general changing just about everything we do with our financial institutions?
Guess the smartphone and you are half right.Also see:The P2P Payment Wars
But the real answer is the camera - a mashup that dates back to 1997 when tech guerrilla Philippe Kahn is credited with marrying a Casio camera to a Motorola Startac so that he could snap the first ever cellphone picture which happened to be of his newborn daughter Sophie.
And there started the revolution, with every smartphone we know of now featuring a powerful camera as a built-in freebie.
The first - obvious - headline for banking: “Remote deposit capture has untethered the customer from the bank branch. They no longer need to go there,” said consulting firm Novantas’ Steve Ledford, a panelist at the recent BAI Payments conference in Phoenix.
Also see: NFC Is Dead, Long Live NFC
Put this bluntly: the ability of mobile banking customers to snap a picture of a check and deposit it directly into their accounts is triggering a wipe-out of bank branches. Up to half will close in the next decade because the one thing that kept dragging customers in was the need to make deposits. Now they don’t have to.
Mobile remote deposit capture (MRDC) has become banking technology’s must have for 2013. The beauty of MRDC: it’s easy, it works. Some bankers had resisted it, saying they feared massive jumps in fraudulent deposits. At least the Atlanta Fed has said that’s not a valid worry.
Try it, you’ll like it - and know that if your bank does not offer it. all the big ones do. No exceptions.
But MRDC is just the beginning of how the camera changes banking.
Next up: picture bill pay.
It works like this: You get a bill. You could input biller data - account numbers, addresses, all those details - into online banking. Or you could snap a picture of the bill and let the software - developed by the same folks who created MRDC - populate a payment form with all that information that has been harvested from the bill.
It’s that simple.
Robb Gaynor, CTO at mobile tech company Malauzai in Austin, Tex., which already has one bank live with this Photo Bill Pay and says it will have a number more live imminently, claimed the accuracy is comparable to that achieved with MRDC.
The big point: entering data to pay a new payee is a bother in online banking and it is much more aggravating via a smartphone. Thus the betting it will catch on, fast. “If I were predicting anything, it would be rapid adoption of photo bill pay. It’s for the many millions who don’t use online bill pay,” said Jim DeBello, CEO of Mitek, the company that owns many of the key patents in MRDC and photo bill pay.
But the camera keeps on giving. Mary Monahan, an analyst with Javelin Strategy and Research, said in an interview that she sees another powerful uses of the camera coming into wide use soon: Pay by snapping a picture of a credit card.
Users mangle data input, especially when trying to buy with a smartphone - but again the camera can ride to the rescue, said Monahan. “It takes 30 seconds to key in the data. It takes five seconds to take a picture.”
She added that a plus for merchants is that this also “assures them the card is present,” because they actually see an image of the card.
This, she said, will catch on.
And there’s a fourth revolution the camera is beginning to ignite: Account onboarding.
It just is a hassle to open a new bank account online and banks don’t like it any better because they worry about who this person really is.
The answer may be as simple as snapping a smartphone phone of a driver’s license, said DeBello, whose tools are already in use by Progressive Insurance in its new account onboarding. Next step, suggested DeBello, will be for financial institutions to embrace this.
“This will catch on,” he said, mainly because it is easy and “it leverages what consumers already are doing.” They are already taking pictures so this is nothing new - but it just may result in a lot fewer errors in inputting data when signing up for new accounts.
There will be more uses of the phone’s camera because it makes data input so easy. Nobody saw it coming when that first baby picture was snapped - but now most of use a phone camera daily and that suddenly is changing everything in banking.
Also see: Is It Actually Safer to Bank on Your Smartphone?