Mobile remote deposit capture refers to the use of camera equipped mobile phones to deliver RDC capability. The phones serve as the image capture device (scanner) and user interface for running the application. Mobile RDC is a fascinating irony in that it uses some of the most advanced technology available in consumer financial services to support such ancient of payment mechanisms, the paper check. To the extent to which mobile RDC is adopted, it will exist as part of the larger distributed capture framework in use in most US financial institutions.

But mobile RDC is nascent. The concept of using a camera-equipped cellular phone to accomplish RDC likely belongs to Mitek Systems with its announcement of Mobile Deposit in early 2008. Back then, few financial institutions took the idea seriously, but beginning with USAA, a minority of banks now plan to offer mobile RDC as an optional component of mobile banking offerings. They will offer mobile RDC to both consumers and businesses.

Banks will do so for several reasons. First, mobile RDC is a great fit with busy, mass, affluent customers who demand convenience and extraordinary customer service. Banks will also do it to reduce the cost to serve retail customers. Doing so has become critical and will likely remain so as banks encounter higher capital costs, more stringent regulatory oversight and eroding profit margins. Mobile RDC can satisfy both objectives: reduce cost to serve while delighting customers with extraordinary convenience. Few cost savings measures can make such a boast.

In Celent's opinion, mobile remote deposit is destined to succeed for two reasons: convenience and device ubiquity. Apple shipped 2.3 million iPhones in 2007 and 13.7 million in 2008. RIM boasts about 25 million BlackBerry subscribers through February 2009. In its most recent quarter, RIM shipped 7.8 million BlackBerrys, including 3.8 million to new subscribers. The world is quickly going mobile, and mobile banking is riding the wave. Bank of America alone boasts well over two million mobile banking users. Moreover, smart phones are becoming mainstream.

Apart from risk concerns, why wouldn't mobile RDC become an obvious feature for select mobile banking users? With the assuaging of RDC risk concerns, mobile RDC will grow and grow rapidly, taking the form of an optional mobile banking component for qualified customers. Target markets will remain business, wealth management and private banking clients for some time in most financial institutions. With experience, financial institutions will gradually adopt a less risk-averse posture and invite a broader user base. The rate at which this occurs will be a function of the competitive climate. One or two large banks could change the overall industry posture in a hurry.

Bob Meara [bmeara@celent.com] is a senior analyst in Celent's banking group, a research and consulting firm focused on the application of information technology in the global financial services industry. For more information on his report, "Mobile RDC: Self-Service Deposits for the Masses?", please visit www.celent.com.