Despite Increasing Adoption, There’s Room for Improvement in Mobile Deposits, Study Finds

Mobile remote deposit capture has made big gains in recent years, but there’s still room to improve the service, according to new survey findings.

Deficiencies in financial institutions’ mobile-capture offerings include error identification and tracking, unclear notices of funds availability, and overly restrictive risk-control policies, according to Ron Shevlin, director of research at Cornerstone Advisors Inc. 

Scottsdale, Ariz.-based Cornerstone produced the new 2020 Mobile Deposit Benchmark Report based on research by CI&T Inc., a Brazil-based analytics and cloud-technology services firm with several U.S. offices. San Diego-based mobile-capture software provider Mitek Systems Inc. sponsored the report.

The report, the fourth of its kind, also ranked the mobile-deposit offerings from 20 large banks and credit unions based on eight criteria. JPMorgan Chase & Co. came in No. 1 after placing sixth in the preceding ranking in 2018. Citigroup Inc. rose to No. 2 from No. 11, and 2018’s leader, Capital One Financial Corp., fell to No. 3.

Consumer mobile deposit involves bank customers snapping pictures of the front and back of a check with their smart phone and uploading the images for deposit through their bank’s mobile-banking app. Based on a CI&T survey of 321 consumers in 2019’s third quarter, the report says 45% of respondents have used mobile deposit compared with 40% in 2018.

Regarding technical improvements, Shevlin says 19 of the 20 institutions reviewed now offer auto-capture in which the software snaps the picture when it deems the image size, lighting, and other criteria are correct. In 2016, 12 of 15 financial institutions surveyed provided auto-capture.

There’s room for improvement in other areas, however, including preventing and spotting errors that slow down or impede the user experience, according to Shevlin. These can include everything from sending the deposit to the correct account to positioning of the smart phone’s camera to assuring that the customer isn’t trying to deposit a bigger check than the bank’s deposit-limit policy allows. “The big one in the U.S. has  to do with error identification, error tracking, things like that,” Shevlin says. “Many of the banks did not score particularly well.”

The survey also found that many consumers complained of funds not being available in a timely manner and aren’t sure if a mobile deposit went through. In addition, the online pages of some financial institutions’ mobile-deposit pages sometimes used words and branding inconsistently, resulting in customer confusion.

“What confusion leads to is abandoning the process,” says Shevlin. He adds that “when the mobile-deposit product does not work well it sort of disproportionately weighs on the dissatisfaction with mobile banking.”

Younger consumers tend to have more problems with mobile deposits than older ones, according to the survey. Only thirty-six percent of respondents ages 18-24 years old reported having no problems with the service in the preceding 12 months, and 34% of those ages 25 to 34 reported the same. In contrast, 43% of respondents ages 35 to 44 had no problems. Corresponding figures were 59% and 56% for the 45-54 and 56-64-years-old age groups.

Part of their proneness to problems could stem from young adults being by far the biggest users of mobile deposit. Sixty-five percent of respondents ages 18-24 said mobile deposit is their most frequent method of depositing a paper check. Next highest was the 45-54 age group at 47%.

One way financial institutions can encourage more mobile-deposit use is by tailoring risk-control policies to the individual customer as much as possible, according to Shevlin. A small business with a long history of making legitimate deposits should be allowed to exceed a bank’s deposit limits in some circumstances, he believes. “Personalizing of the policies could be kind of a way of improving the risk without lowering the experience bar,” he says. “Can you increase the experience bar without lowering the risk bar?”