Remote Deposit Anywhere = Mobile Remote Deposit

Using Mitek Technology

ProfitStars’

Remote Deposit Anywhere

Mobile Remote Deposit Capture – New Technology – New Opportunities

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ProfitStars Mobile Capture 2011 Webinar Series

Agenda

Mobile Capture - What we will cover today…

• Market Opportunity • Integration and Delivery • System Overview – “How it Works” • Technology Used • Questions

What is the market opportunity for

Remote Deposit Anywhere - Mobile?

Mobile Market Trends

• The total number of smartphone subscribers increased 72% year-over-year, growing from 23 million subscribers in 2008 to 36 million in 2009

• Over 70% households in US have camera phones • Over 40 million are smart phones with a 2

megapixel or higher camera • More than 5 billion app downloads have

occurred from the iTunes store as of June 2010 and this trend is accelerating

Source: Javelin Strategy & Research, Celent and Apple, Inc.

The Online Channel Rules

• Online has already overtaken branches as the dominant financial services channel.

• Branch transactions are down 1/3 to 1/2 in past 4 years.

• 70% of personal financial transactions take place outside the branch.

• Since branch operating costs are fixed, cost of in-person transactions increased 30-40%!!!

“A Lifetime of Change in 24 Months??!!” Presented by Fred Brothers of eCom Advisors

at NACHA Mega Meeting; 9/23/2009

Mobile Projections

• Cell phones most common device used for browsing the web by 2013 • Number of browser-equipped phones to

exceed 1.83B, compared to 1.78B PCs in use. (Gartner)

• 3B people globally will be able to make electronic transactions via mobile or internet technology by 2014

http://www.engadget.com/2010/01/15/gartner-forecasts-phones-overtaking-pcs- as-most-common-web-brows?icid=sphere_blogsmith_inpage_engadget

Smartphone Wars

• Smartphone market share • BlackBerry 39% vs. iPhone 28%

• Apple will surpass RIM’s market share by February 2012

• Android share is growing fastest • 64% of all mobile web browsing happens

on iPhones, i.e., on 5% of all U.S. mobile phones)

http://finance.yahoo.com/family-home/article/109225/why-blackberry-users-will-defect

Transaction Costs by Channel

Mobile is the lowest-cost banking channel to serve on a per-transaction basis.

Fiserv White Paper: “How to Achieve a Compelling ROI from Mobile Financial Services” ; www.checkfree.com

Mobile Banking Projections

• “Mobile banking usage will grow from 10 million active users in 2009 to over 53 million active users in 2013.” – Tower Group

Is mobile remote deposit

a game changer?

Mobile Remote Deposit Early Adopters

Market Movers

First PayPal Financial?

Mobile Remote Deposit Trends

71%

20%

6%

1% 2%

Financial Institution Mobile RDC Plans

No Plans

Considering

Planning

Testing

Offering

Source: Celent

27%

31%

42%

Intended Target Market

Business

Consumers

Both

Mobile Remote Deposit Trends

• 59% of mobile banking customers are likely to adopt mobile remote deposit capture if offered by their banks

• Key factors driving interest

• Convenience and accessibility of mobile phone-enabled deposits (52%)

• Faster accessibility to funds (45%) • Lower time cost relative to other deposit

options (39%).

Source: Mercatus Mobile RDC Adoption Research Study

Value Proposition

• For the user: • Save trips to the bank • Accelerated clearing /

enhanced cash flow • Extended business hours • Reduced return item risk • Bank relationship

consolidation

• For the bank: • Attract low cost deposits • Service customers beyond

the branch foot print • Lower branch servicing

costs through the extension of the self service channel

• Lower processing costs • Reduced transportation and

paper ticket costs

All of the benefits of remote deposit capture…

Through a more convenient, more readily available channel.

What does ProfitStars Provide?

Remote Deposit Anywhere Plans

• Q2 2011 delivery for Mobile Deposit with iPhone for Consumer (RDI) and Micro-Business (RDMB)

• Currently integrating

patented Mitek technology into the EPS Payment Processing Platform

• EPS currently putting pre-

release plans together for deployment

Remote Deposit Anywhere and Anytime

• Mobile RDC is a natural extension of our existing remote deposit solutions • Consistent application of

business rules across remote deposit solutions

• Proven, risk mitigation technologies

• Multi-platform support • Supports the use of

advanced mobile image technologies from Mitek Systems Inc.

Mobile Remote Deposit From ProfitStars

Back Office Collection, Processing and Routing

Remote Deposit Platform

Mitek Mobile Image Processing

iPhone

Risk Mitigation and Deposit Review

Blackberry Android

Key Solution Components

ProfitStars provides: • Branded mobile user

interface • Patented mobile image

processing technologies • Distortion correction • Lighting correction • Auto cropping

Mitek provides: • Mitek integration • Remote deposit platform

• Business rules • Deposit limits and review • Duplicate detection

• Back office collection, processing and routing

• Implementation services • Support

Security

• The connection between the Mobile Deposit phone application and the Mobile Deposit server uses the industry-standard SSL (Secure Sockets Layer) protocol, which utilizes state-of-the-art 256-bit encryption.

• This is the same connection type used by all computers and browsers for all secure communications, such as online banking. This prevents so-called "man in the middle" attacks, where a third party intercepts the communication between the two parties (the phone and the server in this case) without their knowledge.

CAR/LAR & IQUA Process

• The Mitek Mobile application talks to the Mitek Mobile Server running on EPS servers.

• Mobile server will CAR/LAR/IQUA the check image and send a decline back to the phone or an approval on to our services.

• The user will have immediate response as to acceptance.

How It Works

Initialize Application Authenticate Photograph Check & Send

Deposit Receipt Confirmation

Enter $ Amount

Process Check Data

1 2 3 4

5 6 Send data

Remote Deposit Anywhere: iPhone User Experience

Download Mobile Deposit App from App Store

Remote Deposit Anywhere: iPhone User Experience

Login to mobile phone app

Enter User name

Enter Password

Touch Login

Login screen Main landing screen

Create new deposit

Review previous deposits

User Options

Remote Deposit Anywhere: iPhone User Experience

User options

Shows account that is selected

Accounts (nickname) enabled for depositing

Image/Data retention on phone; Save

username/ password

Can make modifications

Can make modifications

Remote Deposit Anywhere: iPhone User Experience

Deposit Check

Enter amount Take picture of front of

check

Take picture of back of

check

Uploaded Successfully

uploading uploading

Remote Deposit Anywhere: iPhone User Experience

Review Deposits

All Pending

Success

Failed

Mitek IMagePROVE provides:

• Advanced mobile image technologies handle: • Arbitrary location and

orientation of documents • Three dimensional

distortions (projective, skew, warp)

• Unknown document size • Unknown color(s) of

document and background

• Image dimensions • Poor lighting conditions • Shadows

Example of Warped Check With Mitek

Without Mitek

Distortion Correction

Note: MICR line and account holder information purposely blurred

Lighting Correction

Shadow With Mitek

Without Mitek

Note: MICR line and account holder information purposely blurred

Auto Cropping / Deskewing

Complex Background With Mitek

Without Mitek

Size Variation Detection

• Automatically identifies business and personal checks

• Computes actual size and generates bi-tonal / grayscale images equal in dimension to those produced by flatbed scanners at 200DPI

With Mitek

Note: MICR line and account holder information purposely blurred

MICR Read

• MICR read offers extremely low false rejects and low false accept rates, providing a superior customer experience and lower processing costs

Note: MICR line and account holder information purposely blurred

Actual Results: High-confidence correct read by Mitek

Actual Photo: Blurry MICR line on check image

Front / Rear Image Detection

• Mitek provides advanced algorithms for detecting accidental scanning of the front side of a check twice and prompting the user to scan the correct rear side of the check

Without Mitek

Note: MICR line and account holder information purposely blurred

With Mitek

Real Time Feedback

• Mitek provides instant, detailed user feedback to ensure a high quality user experience

Cut Corners Message: “Please retake the photo ensuring all 4 check corners are in the photo”

Extreme Contrast Message: “Please retake the photo with less shadows”

Insufficient Light Message: “Please retake the photo with better lighting”

Note: MICR line and account holder information purposely blurred

Planned Development

• Phase I – Remote Deposit Anywhere via Consumer Capture/Micro-Business Capture (or Mobile Dep@sit) • Mobile Deposit via iPhone • Mobile Deposit via Android • Mobile Deposit via Blackberry

• Phase II –Remote Deposit Anywhere via Remote

Deposit Capture (EPS’s Flagship System)

• Phase III – Remote Deposit Anywhere to be integrated with Mobile Banking Solutions

FI User Management

Remote Deposit Anywhere: FI User Management Edit User: Enable Mobile Mobile settings will only appear if the FI merchant account is configured for mobile deposit

Limits and Deposit Review

• Review is triggered based on exceeding one or more limits – Individual item limit – Daily deposit limit – Velocity limits

• Individual rules can be established for each client by the financial institution

Remote Deposit Anywhere: FI User Management FI Level Default Velocity Settings Mobile settings will only appear if the FI merchant account is configured for mobile deposit

Remote Deposit Anywhere: FI User Management Create Mobile Velocity Settings

Remote Deposit Anywhere: FI User Management View User: Create/Edit Velocity Settings Mobile settings will only appear if the FI merchant account is configured for mobile deposit

Remote Deposit Anywhere: FI User Management Create Mobile Velocity Settings

Remote Deposit Anywhere: FI User Management Reports – List Totals Mobile settings will only appear if the FI merchant account is configured for mobile deposit

Remote Deposit Anywhere: FI User Management Reports – List Exceptions Mobile settings will only appear if the FI merchant account is configured for mobile deposit

Remote Deposit Anywhere Solution Overview

Questions?