November 26, 2015
At LTP, we have been following the global FinTech industry to cover the most interesting companies and news in the space. We are delighted to share insights on a very interesting subject: your smartphone camera and how it is transforming banking and financial technology. When Nokia brought good cameras to phones, little did they know that someday, we would open our money account using the same cameras. Of course, Apple improved the phone camera’s performance by several notches and today – from eKYC to remote check deposit – it's a darling of FinTech and banking. Let me give you some examples of the ways smartphone cameras and solutions built around them are leveraged to take banking to the next level.
Card/Account Activation in a Flash
Recently, Australian bank Westpac launched card activation via mobile, becoming the first Australian bank to enable customers to activate a new debit or credit card using a smartphone camera. The feature uses OCR technology and enables customers to switch on their new credit or debit card in a flash via Westpac’s mobile banking app on their iPhone or Android smartphone. The innovative feature activates the card in three simple steps by prompting customers to scan their card, confirm that the card details captured are correct and tap to activate. As described on the official website, the launch of card activation by smartphone cameras coincides with the availability of Quick Balance on the Apple Watch when paired with Westpac’s banking app for iPhone. The new Quick Balance feature allows customers to quickly swipe their Apple Watch screen to see their account balance without the need to login to Westpac mobile banking. Starting November 2015, Westpac card activation by smartphone camera is available for Visa, MasterCard and American Express credit cards and debit cards along with the Quick Balance feature on Apple Watch.
Account Opening and Bill Pay
Back in 2013, Mitek rolled out Mobile Photo Bill Pay to take the "no data input" philosophy a step further, allowing a bank customer to use their smartphone camera to pay bills simply by using the camera to take picture of the bill. The application does everything else, with no other action required from the customer. However, the customer can review the bill data to verify the payment before it's made. Among the 10 acquired clients to implement the technology were U.S. Bank and BBVA Compass Bank.
The Bill Pay feature was part of the Mobile Account Opening solution that enabled banks to capture new customers easily, with no need for a new customer to use a computer or visit a branch. The new customer can download the bank's app, then use a smartphone camera to capture the data from the front & back of driver's license and get all the dirty work done at the back-end.
ABSA Bank was one of the pioneers to develop an account opening application back in 2011 for Android-based smartphones and tablet devices, allowing sales consultants to open bank accounts and issue debit cards to new customers in less than 10 minutes.
The on-device application scans one’s ID book to identify and verify the customer’s details, captures all the relevant information and enables the imaging of supporting documents. It interfaces with ABSA’s systems to conduct the relevant screening processes and complete the opening of the account. The remote account opening system replaced the obsolete cumbersome processes involving a bulky set of laptops, barcode scanners, thermal printers and card writers as well as more than one interaction with the customer.
Data Collection: Enhanced Protection and Speed of Service
AmEx in the US replaced paper-based photocopying and data collection with an automated system that is easier to archive and audit, cheaper to maintain and provide better protection for personal data than photocopying and, hence, increased the speed of service in the foreign exchange outlets worldwide.
Using the IDscan solution, AmEx reduced costs through the automation of manual scanning and manual data entry as well as enhancing data protection. Operating in global markets within a variety of strict regulations, AmEx is using OCR technology in the platform’s transactions approval in highly crowded environments, allowing customers to scan documents on the counter.
Santander UK is another example of a global bank using image recognition as a way to enhance operational efficiency. In the beginning of 2015, Santander UK deployed a technology powered by IDscan to over 1,000 branches, making this one of the largest retail deployments of this nature globally powering Santander’s operations with a centrally managed document authentication system.
ABSA Bank in Johannesburg, South Africa is a step ahead of the game with powerful processors scanning hundreds of groups of previously unclassified documents with deployed IDscan solutions. The bank is able to run data mining process to run 24x7 during a 12-month project. Ability to process, mine, segment and deliver OCR results on a pool of 150 million PDF documents with each one containing up to 200 different A4 scanned images is a fantastic breakthrough. This is the true power of cameras and OCR technology in action.
And enhanced data mining process is a widely represented use case of the technology built around camera use. There is a mass of financial institutions using the solution, among which are Metro Bank in the UK, UniCredit in Austria and Barclays in the UK.
Through the same IDscan solution, Barclays Iberia (Portugal) enabled authentication through various types of structured documents (such as identity cards and driving licenses) and recognition of non-structured documents (such as utility bills and bank statements), thereby solving the challenge of real-time recognition and information extraction from images acquired through the iPad native camera in uncontrolled environments. IDscan’s Core Engine (ICE) is able to capture, crop, de-skew and recognize documents from almost any angle and under almost any lighting and background conditions and return structured and accurate OCR results in addition to verification and authentication checks all within few seconds. Quite impressive!
Identity authentication is the backbone of all use cases of ID images and other documents. Through the images taken or scanned by cameras along with the applied software, banks are able to take the services digital with no need for a customer to even walk into a branch.
Remote check deposit via mobile is no surprise anymore since the biggest banks started offering it several years ago. Even though the technology powering the solution for each bank may differ, at the customer-end, they work in a similar manner, making it easy, convenient and secure to deposit checks without a need to visit a branch. Some of the examples are Citibank, Bank of America, Wells Fargo, Chase, Associated Bank, Capital One, PNC Bank, TD Bank, BB&T and many others.
For a more detailed example, let us look at Chase’s QuickDeposit solution. The journey starts by choosing the Check Deposit option within the mobile app and entering the amount you wish to deposit. Chase offers an opportunity to deposit funds not only to your account but type in the other accounts you want to deposit the check. The next step turns on the camera when a user needs to take pictures of both sides of the check and confirms the deposit.
Powered by Mitek, U.S. Bank offers a money transfer service with a snap through a mobile app. The service allows a user to take a picture of the payment coupon for a credit card from a different financial institution or any other payment token using the camera on a phone. The image is then processed with the built-in solution to extract the information necessary to complete the transfer. Users then get another chance to review and confirm the information captured and then submit the request.
Clearly, banks are paving the way to use our smartphone cameras in these cases. It is a matter of time until branches – as we know them – will become obsolete and we will enter the time of banking in a flash with branches transforming into something new and interesting.