Back in January, I revealed that the mobile banking industry was in a period of rapid transformation. And yet, most investors were completely unaware.

Fast forward and not too much has changed.

Sure, Google’s (Nasdaq: GOOG) launch of its highly anticipated near field communications (NFC) application – Google Wallet – has people buzzing about the potential for mobile payments.

But as my colleague, Justin Fritz, recently revealed, mass-market adoption for NFC isn’t happening as quickly as predicted.

[ad#Google Adsense 336×280-IA]However, the same can’t be said about another niche of the mobile banking industry.

Specifically, remote deposit capture (RDC).

What’s that, you say? It’s simply a technology that enables consumers to deposit checks into their bank account by snapping a picture of them with their mobile phone.

Talk about convenient! So it’s no wonder why over 200 financial institutions presently offer RDC services. And more than a thousand institutions are expected to offer them within the next year.

Heck, a recent industry report from AlixPartners LLP went as far as pegging mobile RDC as possibly “one of the most important retail-banking innovations of this decade.” And I agree.

The good news is that there’s one company at the epicenter of this boom.

The even better news is that it operates behind the scenes, providing the technology that powers RDC services. So very few investors even know it exists. Especially since the stock didn’t trade on a major exchange until July.

But don’t let the company’s relative obscurity deter you because it promises to be short-lived. Plus, the upside potential for the stock is legitimate and significant.

Three Compelling Reasons to Own Mitek

The company I’m referring to is San Diego-based, Mitek Systems (Nasdaq: MITK). Founded in 1983, the company represents my favorite way to play the mobile banking boom for three straightforward reasons.

~ Immediacy: Mitek provides a technology that consumers want and, more importantly, are using right now. So there’s no waiting around required for this tech trend to take off. It’s happening.

~ Pioneer & Industry Leader: Mitek literally created the mobile RDC market with its patent-protected ImageNet Mobile Deposit software. It was the first product of its kind, and it has quickly become the industry standard.

If you have any doubts about this $267 million market-cap company’s dominance, chew on this: Over 40 financial institutions use its technology, including six of the top 10 U.S. retail banks, as well as Charles Schwab, Fidelity Investments and PayPal.

~ Unmatched Competitive Advantages: Mitek is a first-mover… a consummate innovator… it touts hefty research and development spending…. it boasts superior, patent-protected technology (in early June it was granted four more patents by the U.S. Patent and Trademark Office)… and it conducts business from a blue-chip client list. Add it all up and no other company is better positioned to profit from the mobile banking boom.

The Time to Act is Now

As CEO, James B. DeBello, says, “We continue to see an unprecedented level of interest in mobile deposit [technology].”

And it’s easy to understand why if you take five minutes to check out the videos on Mitek’s website, which demonstrate how its technologies work.

Put simply, Mitek’s products are innovative, easy-to-use and convenient. And such a formidable combination is already translating into considerable growth.

In the most recent quarter, sales increased 259%. And the company swung to a profit.

Shares are responding in kind, jumping more than 80% this year. Not too shabby considering that the S&P 500 is actually down 1% on the year.

Even after such an impressive move, though, it’s not too late to jump onboard. Sales and profits are just now ramping up for the company. Not to mention, only two analysts cover the stock. But Wall Street won’t remain clueless forever.

Bottom line: As the mobile banking boom accelerates, Mitek represents my favorite way to play it. Plenty of upside remains for the stock. So don’t miss out.

Ahead of the tape,

— Louis Basenese

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Source:  Wall Street Daily