Banking Innovation For The Fat-Fingered

Banking Innovation For The Fat-Fingered As I have written about frequently over the past several months, I believe some of the best innovations in banking are not the result of added features and benefits to existing financial products and services, but the simplification of everyday processes that can improve the lives of a banking customer. This is what makes me such a fan of Mitek. Mitek has created solutions that allow customers to use the camera on their smartphone and tablets to deposit checks and reload prepaid cards, pay bills, get insurance quotes, open new accounts and transfer balances . . . all with a snap of a picture. No data entry is required. With mobile imaging technology, the image is captured with error correction and adjustments made, then data is extracted and put into pre-set fields on the mobile banking app instantly.What is interesting when I watch Mitek and their bank and credit union partners is that every time I think there is no more that my phone's camera can do, Mitek finds a new solution or enhances a previous innovation.In an industry where the growth of mobile banking is mirroring the growth in smartphone ownership, the benefits of using one of the most easily understood functions of a smartphone and leveraging it to facilitate a better mobile banking experience are enormous. These capabilities can attract new customer, build engagement, increase cross-selling and enhance loyalty. While what may follow may sound like a commercial for Mitek, it probably is. With so little true innovation being done by traditional banking organizations in the U.S., it is refreshing to see a company that makes innovation part of their overarching company mantra. The good news is that Mitek continues to build new solutions that banks can implement quickly and easily (i.e. U.S. Bank), making them innovators as well.To illustrate my point about the focus of Mitek on innovation, I have included a video where Jim DeBello, president and CEO of Mitek discusses innovation at his company.In a recent Forrester research paper entitled, 2012 US Mobile Banking Functionality Rankings, Peter Wannemacher wrote, "No mobile feature has made as big of an impact as quickly as the mobile remote deposit capture (RDC) functionality". The benefits of offering mobile deposit include:Mobile customer engagement: Moving the customer beyond simply checking balances.Cost reduction: While the amount of cost reduction is certainly up for debate due to the ability to reduce staff and physical facilities, there are definitely lower costs with mobile deposit than for a branch-based transaction.Revenue potential: As I outlined in a recent blog post entitled, From Free to Fee: Monetizing Mobile Deposits, U.S. Bank, Regions Bank and others have found a way to generate fee income from this value-added service.Enhanced customer experience: Anytime, anywhere simple mobile convenience to make a deposit, generate a receipt and access funds.Rather than resting on their laurels, Mitek has continued innovation within their mobile deposit solution. In the Spring of 2012, Mitek introduced the ability to leverage their mobile deposit platform to load prepaid cards using a smartphone, freeing underbanked customers from needing to use costly check cashing facilities.At the Remote Deposit Capture conference I attended in Orlando this September, Scott Carter introduced enhanced capabilities including endorsement analytics that can reduce risk, improved business intelligence that increases the ability to investigate processing exceptions, and a real-time image capture technology that provides instant feedback to the customer as to the quality of their image during the capture process (MiSnap™ SDK).In May of 2011, Mitek won their first 'Best of Show' award at Finovate for their Mobile Photo Bill Pay solution. At the event, JJ Hornblass, publisher of Bank Innovation gave the service an A+ for the 'cool factor', an A+ in the category of 'I want it' and an A+ for 'profit potential'. Nice report card at a highly competitive financial innovation showcase including dozens of other innovation introductions.The Mitek Mobile Photo Bill Pay solution enables users to pay their bills anywhere, at any time, simply by taking a picture of the paper bill with their iPhone or Android smartphone. Regardless of format of the bill, the relevant information from the bill is extracted, with fields within their mobile banking application being auto-populated. The customer simply confirms the information, schedules the payment and clicks 'pay'. Address barcodes can also be read which results in faster address verification.Beyond paying a bill, the solution allows for very easy addition of a new payee for either one-time or recurring payments. With bill payments being one of the most important engagement services to make a new or existing account 'sticky', this service is a major benefit to the bank wanting engaged customers.“As mobile banking applications have increasingly become ‘table stakes,’ it is even more critical for financial services providers to understand which new applications are truly value-added and should become a part of their core suite of mobile banking offerings,” said Bob Hedges, managing director at AlixPartners and co-lead of the firm’s financial services practice. “The valuable consumer functionality and convenience provided by Mobile Photo Bill Pay provides banks with a critical marketplace differentiator they need.”Partnering with Mitek, and leveraging its Mobile Photo Bill Pay product, U.S. Bank was the first leading financial institution to offer this innovative service to customers in early 2013. Since this announcement, several other major banks have partnered with Mitek on their bill pay solution including BBVA Compass.Mitek's mobile photo imaging technology is the foundation for a suite of solutions for the insurance industry as well including the following:Mobile Photo Quoting™- By entering a zip code and taking a picture of a drivers license, insurance ID card and the Vehicle Identification Number (VIN), a customer can get a quote in a matter of moments.Mobile Photo Payments™- By taking a picture of a blank check, automatic payments or reimbursements can be made directly using a customer's personal checking account.Mobile Photo Claims™- Filing a claim is simplified by using the phone's camera to take a picture of the drivers license, insurance card and the license plate, eliminating hundreds of possible keystrokes.Progressive Insurance was the first to market with Mitek's Photo Quoting supporting their mobile rate comparison application. Below is a video that describes the insurance industry suite of services.Enhancing the functionality of all of Mitek's solutions, MiSnap™ SDK is a technology that knows when all conditions are optimal and automatically snaps a photo of the check for mobile deposit or a bill coupon for the bill pay solution. This capability provides real-time visual feedback to the user in an intuitive and fun way, eliminating time and effort in the capture process. MiSnap is supposed to be twice as accurate as the previous manual capture process because it eliminates human error which can occur as a check or bill is being captured. This also decreases time to complete and increases satisfaction and adoption.In September of this year, Mitek again won the 'Best of Show' award at FinovateFall for their unique Mobile Photo Account Opening™solution. Mobile Photo Account Opening enables banks and credit unions to reduce the time and effort needed to open an account through the use of photo imaging. This solution could be used for mobile self-service account opening or in branches by new account personnel.By taking pictures of the front and back of a drivers license, vast amounts of validated data can automatically populate the new account application, eliminating many of the errors that occur during this process. This frees up valuable time for better customer interaction and cross-selling and eliminates mobile opening abandonment that can be as high as 70%.The Mobile Photo Account Opening solution can seamlessly integrate with a bank or credit union's  existing account opening process, assisting with identity proofing and fraud prevention through a partnership with Experian.According to the July 2013, Javelin Research & Strategy report, How to Upgrade Online and Mobile Account Opening for an Omnichannel Era, “the fact that 88.5 million Americans attempted to open an account online or with a mobile device in the past 12 months underscores how far digital account opening has come in a few short years. Nonetheless, its potential remains largely untapped, especially as consumers place growing importance on mobile capabilities.”In the same report the firm also noted, “The number one job for financial institutions should be to enable applicants to open and fund an account in one session.” In just the past couple of weeks, Mitek continued the ongoing wave of innovation by partnering with U.S. Bank to offer Mobile Photo Balance Transfer to U.S. Bank mobile banking customers.Mobile Photo Balance Transfer allows U.S. Bank customers to easily take advantage of credit card balance transfer offers from U.S. Bank by snapping a photo of an exisiting credit card payment coupon from another bankusing their mobile device and sending it to U.S. Bank to apply for a balance transfer to a U.S. Bank credit card.Using the photo capability of a mobile device simplifies the process of account transfer as well as eliminating many of the errors that can occur in the process.I am not sure what could be down the road with Mitek Systems, but it is definitely fun to watch as the ubiquity of the smartphone camera photo is used to simplify banking and improve the customer experience. Possibly, the next innovation will move beyond transactional functionality to provide a virtual safe deposit box for important documents stored electronically by the bank. Or maybe the solutions move into the payments space, allowing a customer to snap a photo of a barcode on a high priced item to enable the almost instantaneous approval of a loan for the customer. The good news is that I am sure the innovation isn't done.

Six Years of Financial Services Innovation

AppId is over the quota AppId is over the quota Six Years of Financial Services Innovation The brainchild of the Online Banking Report and NetBanker blog publisher, Jim Bruene, the very first Finovate conference was held in New York City on October 2 of 2007, when 20 of the most innovative companies in the financial, banking and lending space gathered in front of a handful more than 200 banking executives, analysts, investors and the press to offer a glimpse of the future using the now familiar 7 minute demo format (no PowerPoint slides allowed!). The one-day event was quickly sold out, with overflow space provided for late registrants to view presentations via a video feed (see all 20 videos from the first Finovate conference here).While only six years ago, a lot has changed in the financial marketplace. In 2007, mobile banking was in its infancy, with just a few hundred thousand users across three different platforms ('mobile website' was the most popular). Interestingly, the discussion at the time was whether mobile banking would be a standalone profit center or just another cost center for banks (still up for debate by many). And despite a lot of hype at the time, only one bank (Citibank) and one vendor (mFoundry) had launched a fully downloadable, custom mobile banking app.The themes for the 2007 show and number of companies presenting were PFM (5), mobile banking (5), payments/billing(4), P2P Lending (2), online tools (2), mortgage lending (1) and security (1).The presenter list included (in alphabetical order); Andera, Billeo, CheckFree (acquired by Fiserv), Clairmail, Firethorn (now Qualcomm Retail Solutions), Geezeo, Digital Insight (an Intuit company), Identity Theft 911, iPay Technologies, Jwaala, Lending Club, Metavante (acquired by FIS), mFoundry, Mint, Monitise, MortgageBot (now part of Davis + Henderson), MShift, Online Resources (acquired by ACI Worldwide), Prosper Marketplace and Yodlee.The Best of Show winners of the first Finovate were a two-week old online personal finance start-up named Mint, a mortgage marketplace from MortgageBot named Marvel and the peer-to-peer lender Prosper. The biggest winner, however, may have been the financial community, since the success of Finovate 2007 was the foundation for a growing series of global Finovate events that now include an expanded 2-day FinovateFall event in Manhattan, a second two-day U.S. event, FinovateSpring in California, a one-day FinovateAsia (30+ firms) and the two-day FinovateEurope (60+ firms).With technology always at the forefront, Finovate 2007 was the first financial services conference to proactively court the blogging community, with bloggers from four countries covering the 2007 event (live blogging and a ton of tweeting continues during all events). In addition, all of the presentations are streamed for later viewing for attendees and non-attendees on the Finovate web site.Only three months after the the success of the first Finovate show in NYC, Jim Bruene announced a slightly modified version of Finovate2007 called FinovateStartup to be held in San Francisco in late April of 2008. With a focus on showcasing the hottest financial technology start-ups, the format of 7-minute fast-paced demos remained the same as did the opportunity for the attendees and innovators to network.With an original goal of securing 20 cutting edge fintech firms for the second Finovate conference, Jim and his team quickly surpassed their goal with a final lineup of 40 startups despite a tightening credit market and bigger financial industry storm clouds on the horizon. Included in this lineup were several firms using this event to introduce new products. (recap of presentations available thanks to Scott Loftesness of Glenbrook Partners with video archives of the presentations provided by Finovate)Compared to the first event held 6 months prior, the second event's diversity and expansion of themes was apparent, with new savings/checking products, financial comparison tools and investing/asset management being new themes. In addition, while PFM tools still were prominent at the event, security services and investment/asset management firms had greater representation. As can be seen from the word cloud below, the industry still lacked significant mobile/payments discussions.There is not a banker alive who doesn't remember the financial crisis that started in 2007, 'peaked' in 2008, and is with us to a degree still today. Some of the many impacts of this period were that budgets were highly scrutinized and cut, investment in the future was scaled back and innovation at many financial organizations took a back seat . . . except at Finovate. While it would have been easy for Jim Bruene and his team to fold up the tent in late 2008 and restart the Finovate concept a few years down the road when times were better, Finovate continued to provide the premier forum for innovation. Despite the economic conditions (or because of it), companies wanting to showcase their new products increased, registrations multiplied and the trade and business press took notice. Maybe it was the ripple effect of the introduction of the first iPhone in 2007 and the rapid increase in acceptance of mobile apps, but interest in financial innovation increased during this difficult period.During the shows from 2009-2011, innovation trends continued to be in flux (at least if measured by the products being showcased). Some interesting trends included:Twelve companies at the 2009 FinovateStartup did demos on PFM solutions (representing close to 25 percent of presenters).Small business solutions began to appear in early 2009 and have continued to be a steady category today.Search and comparison tools were strong during the period.Mobile solutions became the break-out category in late 2009 and early 2010. That trend continued in 2011, with the emergence of mobile photo bill pay and other tools.Safety and security tools remained in the spotlight, reflecting the fiscal conservatism that prevailed and the need for safe havens for funds.Alt-payments and alt-lending became a more popular category during this period.The emergence of real-time information distribution.Rewards platforms and savings tools emerged (and won Best of Show honors) beginning in 2011As the presenting themes continued to grow and change, the interest in financial innovation continued as well. Finovate grew exponentially to meet this need. FinovateFall 2010 was the first two-day event, reflecting the extraordinary desire to both demo and participate in this unique forum. Despite (or possibly because of) this expanded forum, sold out events became the norm.The number of demos at the FinovateSpring and FinovateFall events reached more than 60 per show.Audiences multiplied from the first Finovate shows, surpassing 800 at FinovateSpring 2011 and reaching 1,000 in NYC for the FinovateFall 2011 show.FinovateEurope was introduced, reflecting the worldwide scope of fintech innovation. While being held in London, presenters came from Europe, North America and Asia. The first show had 3 dozen presenters over 400 participants.Coverage in both the financial and mainstream business press exploded during this period. In addition, Twitter became an excellent micro blog of highlights as they occurred.All demos continued to be catalogued for future viewing on the Finovate site.The Finovate events for 2012 were filled with familiar categories, new subcategories of previous themes, and categories that didn't even exist when Finovate began in 2007. FinovateSpring 2012 highlighted firms presenting payments and rewards platforms, new mobile solutions and the beginning of social media integration. In addition, solutions emerged in response to new government compliance needs as well as in response to the reduction of fee income.It is amazing how much change can occur with innovation themes in six short months. Possibly because of rapid changes in the acceptance of mobile devices and related apps, the increased concern around authentication and security, the beginning of marketing's emergence from the financial crisis of 4-5 years prior, and the slow acceptance of certain innovations by the public and financial institutions, the word cloud of FinovateFall 2012 themes looks nothing like the themes of the Spring.Not only have the themes continued to change, the subcategorization also illustrates the micro segmentation of new solutions.FinovateSpring 2013 was the first Finovate that I attended in person (previously, I live vicariously through others by following the live blogging and twitter mentions). As has become the norm, the event was again sold out, and you could feel the energy upon entering the venue (see my recap 'Musings of a Finovate Virgin). It also had the feeling of a class reunion since, while presenters may come and go, those who attend the event try to make it every year.As was true with the themes in 2012, the changes in key categories seemed to evolve based on consumer demand (security services, small business), new tools and visualizations (wealth management, investing and mobile applications), new segments (underbanked) and even some advanced applications (P2P lending and B2B payments). With FinovateFall 2013 a week away, there is no doubt that innovation in financial services continues unabated. Finovate will have another sell out crowd in Manhattan on September 10-11, and there will be another exciting roster of 60+ companies ready to demo their solutions. While some may have a strong business case and a pent up demand for their solution, others may be trying to 'make a market' for their innovation. Some are hoping that their demo will spur new funding for their innovation, while others are extending a product category by an established vendor.As in the past, there will be more than 1,000 registrants who will cast their ballots for their favorite presentation, naming them 'Best of Show'. Some of the votes will be cast based on presentation style. Others will be cast based on the 'cool factor' (which doesn't always reflect a desire or need to buy). Still others will cast their ballot based on which solutions they believe have a valid chance in the marketplace. The networking will be one of the primary side benefits with end of day cocktails and even the introduction of the Bank Innovators Council on the Monday evening before the FinovateFall 2013 kickoff.No matter the outcome of the voting, the diversity of innovation is broad and the excitement in the industry is strong. Innovation is a differentiator in an industry that often feels 'me too'. It is a way to potentially grow market share, retain current customers, cut costs and/or increase revenue. Innovation is risky but necessary. It is exciting yet frustrating. It is not for the faint of heart, yet it builds corporate character. Fintech innovation is, by definition, the future. And based on the themes for FinovateFall 2013, innovation is as different from six months ago as it will be six months from now . . . and yet many of the themes sound familiar.While mobile, security, small business, lending and payments remain strong themes, the underbanked category all but disappears. In addition, we see the somewhat surprising reemergence of PFM and loyalty/rewards (maybe there really is something new in these spaces) at the same time that mobile wallets and customer experience get zero love.As Bradley Leimer stated upon returning from his first Finovate . . . It is the 'The Disneyland of Fintech'™. For those attending or joining the event through social media, Finovate is definitely an 'E-Ticket' ride to the future.