A few weeks ago, as I was listening to NPR, I heard about a new iPhone application that would allow you to take a digital photo of a check, send it to your bank from your cell phone, and get the check deposited into your account.
My first thought was of the huge fraud potential of this iPhone application. Preventing, reducing, and recovering fraud losses are a significant part of my job, and this news made me more than a little nervous. So, I decided to investigate.
According to a New York Times article written by Susan Stellin, published August 10, 2009, the only bank currently offering this iPhone application is USAA, which is a privately held bank and insurance company. For the past three years, USAA has allowed their customers to deposit checks from home using a scanner. One reason USAA has such success with these scan and email type products is due to their clientele, comprised of mostly military personnel. A customer must pre-qualify to use the eProducts discussed above by satisfying eligibility requirements for credit approval and having some type of insurance through USAA.
US Bank does have a similar version of mobile banking that can be downloaded to a smart phone or an iPod, called Mobile Wallet. Mobile banking is typically used to check account balances, transfer money, make payments, and locating ATMs. All of these functions are available through US Bank's Mobile Wallet. A customer may also sign up to get alerts, or text messages, when their electronic statement is available, when their balance gets low, or when a payment is due. Mobile Wallet is not limited to Apple's iPhone; it is available for a variety of mobile carriers and phones including Blackberries, with additional allowable mobile devices being added each week. According to the US Bank web site, eventually, more than 100 mobile phones will be supported. A customer must sign up and download the application from the US Bank web site to their phone.
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I heard that same NPR broadcast. I agree that the security issues are a big concern. Mobile banking is the "hot" trend right now. Keeping up with the "apps" is hard in businesses as security sensitive.
ReplyDeleteThese days if you lose your cellphone it's as significant as losing your wallet.
About ten years ago, I said I would never do my banking over the Internet. But soon afterward I decided to give it a try. Now I have used online banking for several years and can't imagine not having the ability to manage my accounts and pay bills online.
ReplyDeleteNow, I kind of have the same reluctance with Mobile Banking but I am open minded about it and interested in learning more. For now, I will probably stay on the sidelines of this technology for awhile until it is further developed.
I work for a bank that has done research on a product similar to this. The product is more for business customers, but it does allow banking to become localized. The business purchases a scanner and software similar to what the bank uses. They scan their deposits and submit them to the bank via the internet for the bank's final approval. When I first heard about this, I was very skeptical about the risk of fraud and errors. When reviewing the software, it became clear that there are many safeguards against this. An intensive system of checks and balances can be set up by the business. Ofcourse, there is also the fact that the business takes on the liability in their contract. The cost savings of this product is more than I thought. After you account for the cost of someone making trips to the bank, I can see its benefit.
ReplyDeleteMy husband is former military and still banks with USAA and loves their service. He uses the option to scan in checks and deposit them to his accounts all the time. Otherwise, he would have to mail them in and that would take several days to post to his account. This way, he can have the money within a day or two and not have to risk the check getting lost in the mail. It was a wise move for USAA, from a service spandpoint, even given the risks, since, they serve clientel around the world who may not be anywhere near a USAA branch location.
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