Is It Mobile Imaging’s Time To Shine?

Mitek may not exactly be a household name, but most large issuers use its technology to enable its mobile banking customers to snap a photo of a check with their smartphone and have it deposited into their checking accounts. Mitek is the world’s largest mobile imaging technology firm and, according to Chief Revenue Officer Michael Diamond, business is booming.

Well actually “hockey sticking” were the words he used in a conversation yesterday with MPD CEO Karen Webster who asked him how Mitek’s business is “growing and going.”

“Up and to the right,” Diamond said. “This is one of those times that that phrase actually applies.  Growth is really strong, a lot of the fundamentals that are really beyond of the control of Mitek and the banks are all really friendly fundamentals for us.”

Specifically, Diamond means, the rise of the mobile phone, the ubiquity of cameras in those phones and the increased number of consumers who are signing on to use mobile banking.

“All those fundamentals drive people to use the mobile devices and to look for reasons to use that device for transactional banking. Which is good for the banks and it’s great for Mitek.”

Apart from “sticky” Diamond acknowledged that mRDC is the kind of service that helps banks build a portfolio of solutions that helps them build and maintain a loyal customer base.  Diamond made another observation. It’s at this phase of the game, he noted, that adopting mobile banking is beyond even keeping customers loyal–it’s about keeping customers on board. Mobile banking services are table stakes for satisfying a mobile consumer base.

“Realistically mobile deposit has been dragging mobile banking in a way that’s a little bit like the tail that wags the dog. You think of mobile banking as a much broader category involving things like account balances and bill payments and transferring of funds and all the traditional things that go with a mobile banking relationship.  But in many cases the thing that gets banks off the dime to actually implement mobile remote check deposit isn’t so much that they want to give their customers the opportunity to access their money on their mobile device, it’s that theircustomers are watching their friends and neighbors and people on TV take pictures of checks and deposit them wherever they are.”

That, Diamond explained, is why mobile remote check deposit functions as a strong centerpiece in a bank’s mobilebanking strategy.

Webster agreed, yet noted that as desirably easy and straightforward mRDC is, it’s not without detractors, pointing to the recently released Pew Charitable Trust, report. The report was critical of mRDC and asserted that the fees charged by banks and reloadable prepaid card companies are too costly and not transparent enough to capture the consumer’s trust.

But while Diamond agreed that Pew’s reputation for “cutting to the heart of things” makes them one of his “must follows” on Twitter, he acknowledged that it seemed uncharacteristic of Pew to examine product features and functions and to make assertions about fees and other specifications.

“Is there anything to argue with there as far as their main point: banks should disclose more things about their mobile deposit services?  No.” However, he also noted that the majority of banks don’t actually charge for mobile deposit services and that it seemed like a bit of a circular argument to chastise banks for not informing customers that they wouldn’t be charged a fee for using the service.

“The whole idea of taking banks to task for not disclosing that they don’t charge for something is curious. If you were to list the top million problems facing banks, this might not be one of them.”

Diamond also noted that on issues referenced by the study – like fund availability – the determination is made in accordance with institution’s internal practices based on their history with the individual and their deposit history.

The situation with prepaid, an area Diamond has deep experience with, he admits, is different. Yet, Diamond didsuggest that the issue with mRDC fees and prepaid are essentially identical to the fee issue that have been endemic to general use prepaid cards for the last several years.

“We all know about the history of problems in that space and how vitally important it is to disclose fees – look at the infamous Kim Kardashian card and the other crazy things out there. Unfortunately, these programs are targeted to a population of people who are often taken advantage of.”

When asked by Webster “what’s next” for mRDC and Mitek, Diamond offered a sneak peek into Mitek’s 2015 roadmap.

First and perhaps most impactful is the expansion of its “idiot proof” auto-capture program called MiSnap. MiSnap overcomes the problem of checks not being deposited because of user error when taking the picture.

“People take bad pictures frankly, or they take a picture of the wrong thing by mistake.” MiSnap is smart enough to take the picture for the consumer and to make sure that the right angles and information is captured.

Mitek is also working to beef up its security protocols with something it calls advanced restrictive endorsements. Though Diamond noted that fraud via digital check capture is actually rare, he said there’s always room to improve it.  Advanced restrictive endorsements reduce the risk that fraud will occur between the time that a picture of a check is snapped and a fraudster tries to double dip by cashing the same check at a check casher.

Finally, Mitek hopes to bring some of the mobile remote check capture fun to commercial payments, where “most of the checks that are flying around this world are flying around between business instead of consumers.”

He further noted that in this regard, mobile imaging is somewhat unique.

“A lot of innovations that come into the banking world come in via the commercial route and then get sort of repurposed in a way for consumer,” Diamond told Wesbter.  “Mobile deposits however, have been quite the opposite.”

Will the hockey stick continue to climb? Of course, there’s no way to be sure, but Diamond is optimistic.  So optimistic that he says that within a year, the majority of Americans depotiing checks using their mobile phone’s camera will be using Mitek’s MiSnap technology to do it correctly.​