The banking industry is no stranger to change. From the first Chinese abacus around 3000 BC to the first automated teller machines of the 1960s, the manner in which humans count, store and collect their money continues to evolve. With the advent of computers, microchips and smartphones, the sky seems to be the limit.
“If you asked someone five years ago about mobile banking, they would have said it’s never going to work,” said Kelly Polonus, spokeswoman for Springfield-based Great Southern Bank. “Today, the use of online and mobile banking continues to increase and for some it has even become a preference.”
Direct check depositAccording to the March 2012 Federal Reserve Consumers and Mobile Financial Services report, 87 percent of the U.S. population has a mobile phone, 44 percent of those are smartphones and 21 percent of smartphone owners have used mobile banking within the past year.
The U.S. Federal Reserve predicts by 2014 one in every three people will utilize mobile banking features on their smartphones, a figure Missouri bankers have factored into recent releases of direct check deposit features on mobile banking apps.
Available in the Apple App Store and Android Marketplace, the free apps allow users to snap a photo of the front and back of a check, upload it to the bank, and the deposit is made to their account within 24 hours.
Andrew Tasset, vice president, marketing manager for Empire Bank, a branch of Jefferson City-based Central Trust & Investment Co. Inc., said banks have been using the technology known as remote deposit capture in-house since about 2003.
“When you get your bank statement back, we don’t send you the original checks, just images,” he said. “This has been widely used by businesses on the back end for years.
However, it’s just now starting to become more widely accessible.
“With the advent of smartphones, consumers can now take advantage of these tools.”
Releasing its direct check deposit app last fall, Tasset said Empire developed the product in-house, utilizing Central Trust’s information technology department.
He declined to disclose product costs.
Once a check is submitted to the bank, information such as account numbers, routing numbers and check amounts are automatically saved in the bank’s computer system, Tasset said.
The check then goes through the normal manual process at the end of the day like a traditionally cashed check.
Similar to Empire’s app, Great Southern released its own version in January, working with Monett-based MEA Financial Enterprises LLC to develop the new technology.
Launching their mobile app a year ago, Polonus said the direct check deposit feature was added in January.
She, too declined to disclose the app’s production costs.
“Being able to bank anywhere at any time is a convenience our customers wanted,” she said. “While some might think smartphone apps are a young person’s game, we have an almost equal mix of the young, middle aged and older using our mobile banking features.”
While Great Southern’s direct check deposit app has its limits – no more than $1,500 per check, per day – Polonus said smartphone technology is advancing and becoming more widespread within the industry.
Smart cardsAs of 2011, there were 521 million bank debit cards in circulation in the U.S., representing $1.8 trillion in purchase volume, according to
CreditCards.com.
Even more popular, the U.S. Census Bureau estimates 181 million Americans use credit cards, with nearly 1.5 billion in circulation inside the U.S.
However, when traveling outside the states, American credit card use can lead to problems.
Chad Doza, Commerce Bank’s senior vice president of consumer credit cards said a change in consumer spending habits facilitated a need for a technological upgrade in banking.
“While the magnetic stripe technology will work in most European point of sale terminals, cashiers and attendants may not know how to use the swipe magnetic stripe, as it differs from inserting the card – the dip – into the terminal for chip,” Doza said in an email interview. “Automated ticket locations for trains, subways and buses (in Europe) are predominately chip-only, as they are not connected to a live network because of limited telephony and Internet infrastructure. In these cases, a chip-enabled card is required to make the purchase.”
In December, Kansas City-based Commerce Bank, a subsidiary of Commerce Bancshares Inc. (Nasdaq: CBSH), rolled out the chip-enabled Visa Signature credit card for more than 10,000 private banking clients and retail customers with higher travel and service level preferences. Utilizing a Europay MasterCard and Visa – or EMV – microchip, the card contains encrypted data, making it more difficult to counterfeit.
Doza said the bank plans to convert its full portfolio of 450,000 cards to EMV chips in 2014. With a price tag of $5 per card, the new technology project will cost Commerce about $2.25 million to complete.
“EMV technology has been the main technology in Europe for decades but has struggled to catch on in the United States,” he said.
“Today, the benefit is greater ease of use when traveling abroad, but as chips become standard in the U.S., our customers will already have the card that they will need to have a seamless transition to the new technology.”
