Tuesday, August 11, 2009

How can one get excited about an iPhone image of a check?

As part of my job, I am regularly exposed to great innovations in the mobile banking domain. Recently, when I read about the USAA iPhone application (Read here and many, many more places), I first thought someone was pulling my leg. In short, USAA (a relatively small US bank catering for the military) will be launching a service where one can take a photo of a check and send it to the bank for processing. I soon realised that many people (predominantly from first world countries) actually thought this was cool and great progress in mobile banking technology.

This reaction for me is a clear indication that mobile banking is way behind in the US compared to most other countries. Many things about this application is strange.
  • The iPhone is a great phone, but most people will agree that the camera technology is probably the worst on the market. The business process for fuzzy checks will be interesting.
  • It is doubtful that people with checks would want to use a phone to bank the checks. Typically most of these people would have access to a PC. The user experience on a PC would be much easier to manage than utilising a phone.
  • Risk and fraud management will be particularly difficult
  • Future extension to this application (to ultimately turn this into a real mobile banking solution) will be difficult, architecturally.
I suppose these kind of applications will be developed in a country with a large part of the payment economy still based on checks. But it does say something about the state-of-the-art of the technology.


Anonymous said...

Unfortunately, yes, we Americans lag behind the rest of the world in many financial technologies.

What we really need is a workable peer-to-peer payment solution. Until, then we're stuck with paper checks.

I personally have spoken to many bankers about this technology (as well as to USAA while they were developing the technology). Checks are still a big part of everyday life here in the U.S., although they are slowly being replaced by debit cards.

Getting to the bank to deposit checks is a huge pain for small business owners. Even getting back to the office to scan in checks is often inconvenient. Mobile Deposit holds the promise of processing the check immediately and not having to worry about losing the check throughout the rest of the day.

As with any technology, usability is key. Some technology I've seen (I haven't seen USAA's final implementation) makes the picture taking process take too long (in my opinion). To succeed, the process should be two snaps, entering the info as a sanity check and be done with it.

The iPhone camera is good enough for U.S. Check 21 images. They are high contrast, black and white images so a basic camera is all that's required. So, there's hope that this technology could spread to other platforms (like RIM) until checks disappear.

Ben said...

You bring up some good points - the iPhone camera isn't the greatest, especially for close up shots, and many people are unlikely to be comfortable with depositing a check by image (they are generally unaware of branch and commercial capture).

In this instance though, I think it is a big win since USAA caters (not exclusively) to customers in military service, many of whom which may find it difficult to visit a branch or ATM. In that respect, it seems a brilliant customer service move and shows they are in touch with their customer base.

It will be very interesting to see what the uptake and usage turn out be with this rather unique market and opportunity.

Hannes@Home said...

It would be interesting to understand more of the demographics of the target customer for this service:
1. What percentage have an iPhone?
2. Of this percentage, how many are actively using the App Store and would be happy to install a banking solution
3. What have USAA done to ensure that this application can not be used for fraud (trojan horse, phishing, image manipulation etc.)

USAA also limited usage to customers that have some kind of credit rating. What will this do to the size of the target market?

Anonymous said...

Actually, I have an iPhone and I know the camera is not that great, but megapixels isn't the only measurement of quality. I've tested this check deposit app with several handsets and have seen the "clean-up" versions and the iphone is surprisingly the best,even compared to a 5MP autofocus/carl zeiss w/flash camera (I think it was an HTC Tilt phone? Can't recall the model)... oddly enough the autofocus always screwed up the image. The iPhone images came through almost every time (except when the photo is not framed correctly by the user).

As to innovation? Sure, there's way more interesting person to person payment technology options available. And I too only get one or two checks a year that I need to deposit, but that's why this feature is cool in my book- I actually carried a paper check around in my wallet for a week because I could never remember to deposit it in a timely manner. I would have loved to just do it right wherever I was standing.

I see this being useful for small businesses- for example a serviceman like a painter or plumber to be able to quickly take payments- those folks typically aren't geared up for electronic payment processing.

Also, in the small biz field, this technology could easily be adapted for receipt/expense tracking etc.

I think it's innovative in the sense that image capture technology is to the point where banks have enough confidence in it to offer this service, it's a "gold standard" of capability and reliability that should allow confidence to do other image capture related stuff like I just indicated.