Depositing checks with the click of a cellphone camera.
ATMs that let you video chat with an employee.
Robots that suggest how to save money.
Bank technology keeps evolving, giving customers ever-more ways to conduct transactions without stepping inside a branch.
Banks are rolling out many of these features with an eye toward capturing younger customers, said Greg McBride, chief financial analyst with Bankrate.com.
“Those types of technologies and the efficiencies that they bring about, are not a request of the Millennials, it’s a demand,” McBride said.
And while it’s not just Millennials interested in those features, those particular customers “may have driven some of the initial change.”
“The reality is, more and more people are banking differently,” McBride said. “Keeping up with the competition mandates continued innovation on the technology front.”
Innovation a ‘necessity’
A decade ago, many customers might not have heard of using an cell phone to deposit a check. Today, large and small banks are under pressure to offer banking apps that let customers take photographs of the front and back of checks to deposit funds.
The feature, known as mobile check deposit or remote deposit capture, is “not only an expectation among the consumer at this point,” but among financial institutions, it’s reaching the point where “you stick out like a sore thumb if you don’t have it,” McBride said. “It’s a necessity for competing and in fact remaining relevant in the marketplace.”
M&T Bank was among the first banks in the U.S. to offer the feature to business customers, nearly five years ago, and last year expanded the service to retail customers, said Paris Roselli, M&T’s senior vice president of digital banking.
M&T’s feature works a bit different from others, to get a clear image. “This one actually turns on the video camera and finds the right frame automatically, so you just hold it and it takes a picture for you.”
Jason Rudman, KeyBank’s head of consumer payments and digital, said depositing checks this way speaks to how much consumers rely on their phones and simplifies a routine task.
“It’s increasingly popular as the smartphone becomes the tool people increasingly turn to to manage their financial relationships,” Rudman said.
Key has seen see double-digit growth in its customers’ use of remote deposit capture, he said.
Technologies such as mobile check deposit typically originate with large banks, which have the financial resources and personnel to develop them, McBride said.
“Over time, as adoption increases and costs come down, smaller banks, and eventually credit unions, adopt them as well,” McBride said.
While banks have to spend money to introduce something like remote deposit capture, he said “there’s almost immediate and ongoing cost savings.” Depositing a check via phone means a customer doesn’t have to walk into a bank and interact with a teller to deposit a check or put it in an ATM, either of which requires human involvement.
“It also allows financial institutions to be more efficient with their human resources,” McBride said. “Now they devote more and more of their personnel to sales and customer service, and less toward back office or non-customer facing positions.”
Banks rethink ATMs
ATMs are getting upgrades, too.
Evans Bank and Meridia Community Credit Union were the first financial institutions in the region to install interactive ATMs.
The machines have all the standard functions of an ATM, but with an added feature: Customers can choose to see and talk with a bank employee working at an off-site location, using a video screen.
Evans, which first added interactive ATMs in 2015, makes the feature available for extended hours on weekdays and Saturdays at its Lancaster and Lockport locations and plans to install more interactive ATMs in the future, said Bernadette Aja, senior vice president of retail customer experience.
Customers of all ages use the feature to ask questions about their accounts or schedule a visit with the branch manager, Aja said.
Some banks, like KeyBank and Bank of America, have rolled out ATMs that allow customers to deposit cash or checks without an envelope or a deposit slip. More than 80 percent of Key’s deposit-taking ATMs operate that way; the other 20 percent will be completed this year. Rudman said that feature is handy for a small business owner who might deposit 10 checks at once and then receives a receipt with images of the checks for verification.
Bank of America has installed “cardless” ATMs, giving customers the option of preparing ATM transactions through an app on their cellphones and finishing the task at the machine. (These same machines accept plastic cards, as well.)
Customers first have to upload a Bank of America debit card on their phone, then hold the device over a “contactless” symbol at the ATM and type in their PIN on the machine to begin a transaction.
Using smartphones to make ATM transactions are one way to avoid the threat of “skimming” devices, which thieves plant inside card readers to create illegal copies.
Bank of America has several cardless ATMs in Western New York. The bank projects all 16,000 ATMs in its networks will convert to the capability by year’s end.
Phones drive change
If there’s one common denominator, McBride said, it’s the phone.
“It’s become our human lifeline,” McBride said. “Whether it’s banking or the morning cup of coffee, everything is evolving in that direction, to reach the customer via the phone and allow them to do everything that they need to do via the phone.”
Banks are increasingly adding relationships with contact payment systems like Apple Pay, Android Pay and Samsung Pay, allowing customers to scan their phone in front of an electronic reader at a retail outlet.
“We felt that it was important very early to be part of that emerging story, such that however you want to pay, you have the power to be able to do that with the Key banking app,” Key’s Rudman said.
M&T has found customers are asking for those technologies, “but it’s not knocking down the doors,” Roselli said.
Assistants go digital
Where might bank technology go next?
Customers can already use some ATMs to buy items like postage stamps. Key’s Rudman said the machines could become even more versatile: In Europe, some ATMs dispense things like train tickets and sports tickets.
The consumer world has set a high bar for the technology, M&T’s Roselli said. Customers who order a product online or download a movie expect immediate results. “Those types of consumer retail sensibilties are percolating into our world,” Roselli said.
But when it comes to customers’ bank accounts, security remains paramount, he said.
“If you’re downloading a movie from Amazon, you have a certain expectation,” Roselli said. “But if you’re moving your money around, the expectation that it’s secure is higher. But customers still don’t expect to have security in their way. That’s the balancing act that we have to have.”
Look for banks to adopt more voice-interactive functions as technologies like Amazon’s Alexa and Apple’s Siri become more commonplace. “You look at a screen, there’s only so much you can do with your thumbs, or there’s only so much you can do with a mouse,” Roselli said.
Bank of America is introducing Erica, which the bank describes as a digital assistant. Michelle Moore, head of digital banking at Bank of America, talked about the technology at a presentation last fall; the bank expects to make the feature available to customers later this year.
The technology relies on predictive analytics and artificial intelligence. Erica can take care of tasks like changing the date for your monthly mortgage payment, warn customers if they are at risk of overspending an account, or even make a suggestion about how to save customers money.
Bankrate’s McBride said it’s hard to predict what might come next.
“I do think we will see continued innovation and there are going to be things we can’t even think of now that will be the norm in a few short years,” McBride said.