My bank just started offering a cool new feature on its mobile app. I can now deposit checks via my iPhone or iPad. I take a picture of the front of the check and the back and upload the images through the app. That’s it.
I think this simple feature changes a lot of things. For example, I now no longer have to visit my bank. To get cash I use my debit card at the grocery store and get cash back. Now I can deposit checks remotely.
So, traffic at banking centers will go down. The ability for the bank to sell me insurance, mutual finds and other higher-margin products will go down drastically.
A lot of banks were acquired for their retail centers. I think that investment hypothesis is now starting to be negated.
One simple feature in an app. So many downstream consequences ripple out.
4 thoughts on “New Banking App (and Ripple Effects)”
To me, the new app is just a continuation of a trend that began in the 80s with ATMs. When banks started replacing tellers with ATMs to lower cost and increase convenience, most lost the personal relationship with their depositors. Depositors began more aggressively shopping mortgages, life insurance, CDs and money market funds. Banks, in turn, had to become more aggressive and take on more risk, trying to persuade individuals to come back into the bank. I’m lucky enough to have a banker that actually knows me by name and is sensitive to my business and personal needs, but that is relatively rare these days.
John, that’s a good point.
I’ve always wondered whether internally, bank employees like all of this innovation and if they embrace it or resist it.
I look at this like what is happening at supermarkets where self-serve checkout is becoming a larger component of checkout aisles. In terms of self preservation, I’m not sure if Cashier’s at full service lines like this or not. Some of them now wait outside of the line to try to intercept customers before they go to self checkout. The more self checkout is used, you can replace full service with self-serve. So 1 cashier can probably handle 4-6 checkout lines and you slowly need less employees. Happened with auto manufacturing, gas stations, even VC where the web/email/social networks allow partners to be more efficient with entrepreneurs and cut out the analyst/associate/principal function.
That’s a great question, James. Not sure if they do like the change. I think it’s very hard for incumbents to sort through threats that attack their core business. Will be fun to watch though!