Big banks look for geek love

NEW YORK (CNNMoney.com) -- Americans may still be frustrated with the nation's top banks, but the technology that large lenders are dangling in front of consumers may keep some from leaving.

Bank of America (BAC, Fortune 500) customers, for example, can now deposit checks at an ATM without having to fill out a deposit slip, as a result of the company's recent conversion of nearly 14,000 cash machines into "envelope-free" ATMs.

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Financial firm USAA allows customers to deposit a check from their mobile phones by using a "remote capture" of an image of the check.

Meanwhile, JPMorgan Chase (JPM, Fortune 500) has made waves with a nearly identical service that lets people deposit cash directly into an ATM.

Wells Fargo (WFC, Fortune 500) unleashed its own flurry of tech-driven initiatives over the last year, including a new mobile service that allows customers to transfer as much as $1,000 to another Wells Fargo account holder from their BlackBerry or iPhone.

"Our promise is to be available anywhere and everywhere our customers expect us to be," said Arah Erickson, head of Wells Fargo's retail mobile banking division.

Big banks have long relied upon cutting-edge technology as a way to retain existing customers or win over new ones. These days however, "gee-whiz" banking products like an iPhone application or smart-ATM have taken on even greater significance.

Offering greater convenience may help soothe consumers who have become outraged over bailouts and big bonuses. But embracing new technology also makes good business sense for banks looking to cut expenses.

A customer that uses a teller to make a deposit, for example, costs the bank $1.34 on average, according to research firm TowerGroup. That same deposit made at an envelope-free ATM costs just 59 cents.

"That saves a lot of money," Bank of America CEO Brian Moynihan said during a conference in New York last month, discussing the bank's recent success in getting more customers to conduct transactions at its recently-updated network of ATMs.

Many of the nation's top banks have been scouring for ways to cut costs as well as find new revenue streams as a result of the crisis and as the federal government has steadily unveiled a variety of new restrictions, including limits on their credit card operations.

Interestingly though, most banks have been reluctant to expand the ATM much beyond its role as a cash-dispensing and deposit-accepting machine, resisting such available technologies as using the ATM to sell concert tickets or help a customer pay a parking ticket.

"We want it to be as fast as possible for the customer," said JPMorgan Chase spokesman Tom Kelly.

Many experts instead suggest that perhaps the biggest push will come in mobile banking. Nearly half of all iPhone users, for example, already do much of their day-to-day banking by phone, according to a study published last fall by Javelin Strategy & Research.

That number however, is expected to balloon in the coming years with 99 million U.S. adults conducting some sort of bank transaction from their mobile phone by 2014.

Top lenders like Wells Fargo and Citigroup (C, Fortune 500) already offer cell phone users a means by which to pay their bills by phone, check their balance or locate the nearest ATM.

It is widely believed that these and other banks will soon allow customers to make a deposit by taking a picture of a check with their smartphone, a burgeoning industry practice called "remote deposit capture."

Financial firm USAA was among the first to offer such a service when it launched its mobile check deposit product "Deposit@Mobile" to its predominantly military customer base last summer.

Some consumers have been reluctant to embrace such new technologies partly over concerns of having their account information compromised. But whether you have an account with a big lender or not, mobile banking and smart ATMs will at some point become the industry standard.

In fact, some ambitious community banks and credit unions, which have historically not had the economies of scale to implement such cutting-edge technologies, are now capable of offering products to rival the big guys.

San Antonio, Texas-based Randolph-Brooks Federal Credit Union, for example, which is a little more than one one-thousandth the size of Bank of America, has already announced plans to offer a mobile deposit product to its customers, noted Red Gillen, senior analyst at the consultancy Celent.

Customers at Mercantile Bank of Michigan, which operates just seven branches, can just as easily transfer funds as Wells Fargo customers with its MercMobile service.

Gillen said many of the latest technologies, particularly online services like an iPhone or BlackBerry application, don't require a budget-busting investment by smaller banks.

"It really serves to level the playing field," he said.