Mobile Remote Deposit: Capturing the Early Adopters


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Mobile Remote Deposit Capture (Mobile RDC) received widespread attention over the past year with high-profile launches from J.P. Morgan Chase, U.S. Bank, USAA and others. Despite attention-getting publicity surrounding mobile RDC launches, apps had only penetrated 3 percent of the mobile phone owner population as of February 2011. Mobile RDC is in the initial part of the early adoption stage of market penetration and will require continued push from the supply side to drive widespread consumer adoption.

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Mobile Remote Deposit: Capturing the Early Adopters

  1. 1. Mobile Remote Deposit Capture:Capturing Early AdoptersConsumer Insights BriefJune 2011Paul McAdam, SVP of Research and Thought Leadership, FISMandy Putnam, Director of Research and Thought Leadership,
  2. 2. Mobile Remote Deposit Capture: Capturing Early AdoptersMobile RDC in Initial Part of Early From this FIS™ survey of 4,002 mobile phone owners, we learned that 12 percent of the mobileAdoption Stage phone owner population actively uses mobile banking, therefore one-fourth of mobile bankingMobile Remote Deposit Capture (Mobile RDC) — consumers have transitioned to adopting mobilesometimes also referred to as mobile check RDC. The survey also found that only 7 percent ofdeposit — received widespread attention in mobile phone owners are aware their banks offer aJanuary via the J.P. Morgan Chase Super Bowl ad mobile RDC app that is available for their phones.promoting Chase Quick Deposit. Although no one The majority — 60 percent — of mobile phonemanaged to beat the Bridgestone “Saluting owners do not know if their primary checkingBeavers” ad, Chase Quick Deposit ranked No. 44 out account provider offers a mobile RDC app.of 101 according to the MediaCurves’ survey ofseveral thousand ad watchers. Despite attention- The lack of awareness on the demand side is notgetting publicity surrounding mobile RDC launches, surprising considering the technology is only twoapps had only penetrated 3 percent of the mobile years old and the relatively low penetration on thephone owner population as of February 2011 supply side of mobile RDC. In Celent’s survey of(Figure 1). financial institutions in the fall of 2010, only 2 percent of financial institutions contacted had a mobile RDC solution in place and another 2 percent were piloting a solution; 15 percent were still in the planning stage1. 2© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  3. 3. Mobile Remote Deposit Capture: Capturing Early AdoptersThe first mobile RDC app was offered in July 2009 lower than satisfaction with the more-establishedby WV United FCU of Charleston, WV. USAA quickly mobile banking technology among active users —followed and one year later in July 2010, Chase was 54 percent as opposed to 68 percent forthe first mega bank to offer mobile RDC. Our June comparable top three-box scores on an 11-point2001 review of the top-20 banks’ Web sites scale (Figure 2). Complaints from less-than-satisfiedindicated that only four — Chase, U.S. Bank, PNC users point to lack of user friendliness and reliabilityand Charles Schwab Bank — offer mobile RDC, as potential pain points.although others are launching solutions in the nearfuture, including Bank of America. “It was confusing to use at first but IAs with mobile banking adoption, consumer finally got the hang of it.”trials of mobile RDC will increase in parallel with Despite having some technical challenges, mobilethe sophistication of handheld devices. While RDC users are depositing on average 5.2 checksonly 3 percent of the mobile phone owners within a 30-day period. This is a significantly higher-reported using mobile RDC in the past 30 days, the than-average number based on recently-releasedadoption rate was 12 percent among smartphone results from the 2010 Federal Reserve Paymentsowners. Adoption jumped to 59 percent among Study. U.S. consumers receive 7.6 billion checks persmartphone owners who were active mobile year from business-to-consumer and consumer-to-bankers. consumer sources. This amounts to approximately 2.8 checks per month per U.S. adult consumer.As is often the case with new technology,satisfaction with mobile RDC among active users is 3© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  4. 4. Mobile Remote Deposit Capture: Capturing Early AdoptersThe relatively high average number of checks Findings suggest that creating awareness of one’sdeposited by mobile RDC users suggests not only mobile RDC offer is only the first in a series of stepsthat the early adopters have figured out how to that financial institutions must take to increaseconquer the initial technical obstacles, they also are penetration. Follow ups to campaigns positioned toconsumers who receive more paper checks than the generate awareness need to focus on assuagingaverage person and, thus, more motivated to adopt security concerns and creating “calls to action”mobile RDC. among yet-to-be-inspired customers at points of contact for check deposits — ATMs, drive-thru linesSecurity Concerns and Inertia and tellers.In our analysis, we define non-users as mobilephone owners who are aware that their primary RDC “Wannabees” – Sizable Segmentchecking account provider offers a mobile RDC app Mobile RDC “wannabees” represent 16 percent ofbut they do not use it. Within this non-user group mobile phone owners. They are defined as mobilethe most common reasons cited for lack of mobile phone owners who are interested in using mobileRDC usage (Figure 3) include: RDC, even though they either do not have access or 1) Security concerns (31 percent) are unaware of their access to mobile RDC (Figure 2) Lack of sufficient check deposits to warrant 4). But, interest levels rise dramatically among use (29 percent) current mobile banking users to 57 percent. Only 3) Inertia regarding downloading the app (26 one in 10 mobile banking users is not interested in percent). having access to mobile RDC. 4© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  5. 5. Mobile Remote Deposit Capture: Capturing Early AdoptersGen Y Leading the Way for Mobile RDC Gen X members account for 30 percent of interested users and Baby Boomers 20 percent —Current mobile RDC users are overwhelmingly this latter segment providing some optimism forconcentrated in the Gen Y generation, which is future penetration beyond the youngercurrently composed mostly of 20-somethings generational segments that have been driving early(through 31 years old) (Figure 5). Two-thirds of adoption of mobile banking technologies.current mobile RDC users are members of Gen Yand nearly one-third (30 percent) are Gen Xmembers. Baby Boomer and Mature segment Table Stakes in Mobile RDC Adoptionpenetration is negligible. Table stakes in mobile RDC adoption include: smartphone ownership and willingness to adoptGen Y does not dominate the interested user mobile apps. Smartphone ownership continues topopulation to the same extent as it does the current grow at double digits with the Android operatinguser population. But, at 46 percent, Gen Y system taking the lead during this past year. Amongrepresents the largest generational segment of the the leading operating systems — Android™, iPhonemobile phone population that is interested in using and BlackBerry® — none has a significant edge inmobile RDC. terms of current mobile RDC penetration though slightly higher percentages of users are Android or iPhone owners than BlackBerry owners. 5© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  6. 6. Mobile Remote Deposit Capture: Capturing Early AdoptersAmong potential (interested) users of mobile RDC,Android and iPhone owners are significantly moredominant than Blackberry owners. Forty-onepercent of Android owners and 44 percent ofiPhone owners as opposed to only 26 percent ofBlackBerry owners are interested in using mobileRDC (Figure 6).Consumers must be willing to use apps and as wellas having a mobile phone capable of using a mobileRDC app in order to adopt mobile RDC. Only a littlemore than one-half (54 percent) of mobile phoneowners who are connected to the Internet usemobile apps (Figure 7). About three-quarters (73percent) of mobile phone owners interested inusing mobile RDC already use apps — significantlymore than the general population of connectedmobile phone owners. 6© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  7. 7. Mobile Remote Deposit Capture: Capturing Early AdoptersPredictors of Mobile RDC AdoptionMobile banking habits, usage of online financialservices and attitudes about mobile phones offerinsight into the types of consumers most likely toadopt mobile RDC. Adoption of mobile bill paymentis the No. 1 predictor of adoption likelihood formobile RDC. Among the population of consumersconnected to the Internet through their mobilephones, 11 percent pay bills by using their mobilephones (Figure 8).That percentage increases six times among mobileRDC users. Among those interested in mobile RDC,19 percent use mobile bill payment. One tactic tofacilitate penetration of mobile RDC could beensuring that customers have mobile banking appsthat allow for easy mobile bill payment.Mobile RDC users are significantly more likely to useonline financial services than non-users. At the topof the list is person-to-person (P2P) paymentadoption of 61 percent among users as opposed to48 percent among non-users (Figure 9). Usage ofother online financial services is 2 – 3 times higheramong mobile RDC users than non-users.Mobile phone owners interested in using mobileRDC are nearly as likely to use P2P as current users(58 percent vs. 61 percent in Figures 10 and 9).However, their usage of other online non-traditional financial services does not approach thepenetration rates among mobile RDC users, whichrange from about one-fourth (27 percent) forpersonal financial management to nearly one-third(32 percent) for Quicken Online (Figure 9). Anotherentry point for mobile RDC could be throughbundling mobile RDC with P2P payment apps. 7© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  8. 8. Mobile Remote Deposit Capture: Capturing Early AdoptersAttitudinal differences between users and non- Comparison of mobile-phone-related attitudesusers of mobile RDC also offer insight into between current mobile RDC users and thosesignificant differences in the way the segments view interested in becoming mobile RDC users show thattheir mobile phones. Not only are users likely to be both segments are equally tethered to their mobileconnected 24/7 to their mobile phones, but many phones (Figure 12). Nearly nine out of 10 reportview their mobile phones as just as capable as their they don’t go anywhere without their mobilecomputers in facilitating their Internet usage (Figure phones. However, opinions regarding other11). Two-thirds believe that they can do most of the behaviors and attitudes related mobile phonethings they would want to do on their computers on diverge between current mobile RDC users andtheir mobile phones. Plus, four out of 10 (43 those just interested in using RDC.percent) prefer to access the Internet via theirmobile phone when they have access to both theircomputer and their mobile phone. 8© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  9. 9. Mobile Remote Deposit Capture: Capturing Early AdoptersConsumers interested in using mobile RDC havenot integrated their mobile phones into their onlineroutines as extensively as current mobile RDCusers have.ConclusionAt a 3 percent consumer utilization rate, mobileRDC has moved past the innovators and into theearly part of the early adoption phase of marketdiffusion within the mobile phone ownerpopulation. The technology is only two years oldand continued push from the supply side will berequired to drive consumer adoption. Mobile RDCadoption will certainly increase as overall mobilebanking adoption continues to accelerate, butanecdotal comments from RDC mobile userssuggest that at least some apps lack userfriendliness and reliability – problems that willsurely be addressed over time but could impedeadoption for some consumers beyond the trialstage.Findings suggest that packaging mobile RDC withcomplementary products such as mobile billpayment apps and P2P payment apps could boostadoption speed. Reaching beyond the typicallyyoung innovator population, however, will requireeducating prospective users about securitymeasures for mobile RDC and providing apps thatensure a positive user experience. 9© 2011 Fidelity National Information Services, Inc. and its subsidiaries.
  10. 10. Mobile Remote Deposit Capture: Capturing Early AdoptersCitations:1 Celent, The Future of Consumer RDC: Going Mainstream, November, 2010.2 The 2010 Federal Reserve Payments Study: Noncash Payment Trends in the United States: 2006 – 2009,Updated April 5, 2011About the ResearchMobile Remote Deposit Capture: Capturing Early Adopters is part of a series of Consumer Insight Briefs based onprimary research conducted by FIS Enterprise Strategy. The research findings herein are based on a 60-question,online survey completed by about 4,002 U.S. mobile phone owners in February 2011. The survey was fielded byFIS Enterprise Strategy to a consumer panel maintained by Survey Sampling International.The definitions of age generations used in our analysis are the standard U.S. Census Bureau definitions: Gen Y,born in 1980 or later; Gen X, born from 1965 – 1979; Baby Boomer, born from 1946 – 1964; Mature, born in1945 or earlier.The study’s primary objective was to determine the impact of mobile devices on behaviors related to financialtransactions, including accessing accounts, paying bills, depositing checks and making purchases.About FISFIS (NYSE: FIS) is the world’s largest global provider dedicated to banking and payments technologies. With along history deeply rooted in the financial services sector, FIS serves more than 14,000 institutions in over 100countries. Headquartered in Jacksonville, Fla., FIS employs more than 32,000 people worldwide and holdsleadership positions in payment processing and banking solutions, providing software, services and outsourcingof the technology that drives financial institutions. FIS is ranked 426 on the Fortune 500, is a member ofStandard & Poor’s 500® Index and consistently holds a leading ranking in the annual FinTech 100 list. For moreinformation about FIS, visit Remote Deposit Capture: Capturing Early Adopters was authored by Paul McAdam, SVP of Research andThought Leadership at FIS and Mandy Putnam, Director of Research and Thought Leadership at FIS.Please contact the authors if you have questions about the research or how the results apply to your financialinstitution.Paul McAdam Mandy PutnamPh: 708.449.7743 Ph: 10© 2011 Fidelity National Information Services, Inc. and its subsidiaries.