How to Reach the Underbanked with Mobile Check Deposit

Hope Credit Union received a boost in achieving its stated mission of serving the underbanked in the rural South when it launched a new mobile banking app last December with QwikDeposit ToGo, Bluepoint Solutions’ mobile check deposit offering.

Since launching the new mobile app, which Hope Credit Union partnered with Malauzai Software to build, more than 1,800 members have started using the app. Hope’s previous mobile app only drew 800 users during its three years of availability, largely because it lacked features like mobile check deposit that are particularly useful for Hope’s members, says Bill Bynum, the credit union’s CEO.

Mobile check deposit is such a help to the credit union’s members because of the geography that it covers. Hope, which was founded in a church basement in Jackson, Miss., has 15 branches covering mostly rural regions, in Mississippi, Louisiana, Arkansas and Western Kentucky, Bynum relates. It specifically targets unbanked and underbanked customers in low-income areas in those states that usually go to check cashers for their financial needs.

And those low-income neighborhoods that the credit union serves have been hard hit by branch closures. More than 90% of the branch closures nationwide since the start of the financial crisis in 2008 have been in areas where household income is below the national median, according to statistics from Bloomberg.

“We can’t afford branches everywhere that’s needed, but technology helps us expand our presence and serve the rural towns that dominate our market,” Bynum points out.

With smartphone adoption higher among low-income income consumers than among the general population, the credit union was determined to use mobile to reach its members and leverage smartphone capabilities to garner interest from its members, and potentially gain new members.

Another positive benefit for the bank is the draw that mobile banking capabilities has on younger customers. “We’re very deliberate about reaching out to younger members,” Bynum says. “There’s a significant need among young adults in our regions to get an account. Most of their parents never had a bank account, so they’ve never had an account anywhere and are more comfortable going to a check cashier.”

The credit union ($169 million in assets) has been pleased with the results since launching the new app, which, in addition to mobile check deposit, offers money transfer capabilities. More than 1800 members have started using the new app without any marketing effort on the credit union’s part, Bynum reports.

That adoption rate seems to be partially driven by the popularity of mobile check deposit among the app’s users. The number of checks being deposited through the app has increased every month since its release, and it allows rural members to deposit a check without having to drive long distances to a branch, Bynum notes.

Marketing the new app has been the credit union’s biggest challenge, as it has limited resources to dedicate to advertising. “Our services are as good as any financial institution in our region, but I’d love to have a larger marketing budget,” Bynum remarks. Instead of traditional advertising, the credit union is planning on a grassroots campaign reaching out to non-profits in the communities that it serves to help get the word out about Hope’s mobile banking capabilities.

“Mobile remote deposit capture allows us to serve our members and communities more effectively. We aim to provide people with tools that help them succeed and mobile helps us do that more effectively,” Bynum says.

Jonathan Camhi has been an associate editor with Bank Systems & Technology since 2012. He previously worked as a freelance journalist in New York City covering politics, health and immigration, and has a master's degree from the City University of New York's Graduate School ... View Full Bio