By Brad Smith
Monday, April 30, 2007
More banks have dipped their toes into mobile services such as account balance checks and transferring funds, although the market for such services remains unclear.
Banking with your mobile phone isn’t all that new, but wireless carriers and more banks are increasingly offering the ability to do more than just check account balances on your handsets.
Bank of America, Wells Fargo, Citibank and BancorpSouth are a few of the banks in the United States either with a mobile banking service or planning one. Similar to online banking, mobile banking allows customers to check balances and transactions, as well as pay bills and transfer funds.
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Newer mobile banking
applications include recent
account activity, fund
transfers and bill payment. |
Online banking itself hasn’t taken off, and there is some question how popular mobile banking might be. According to the research company comScore, online banking grew 9.5% last year after two years of double-digit growth. But comScore also said fewer than one-fourth of those who do bank online are interested in mobile banking, apparently because they didn’t want to pay higher cell phone bills. However, among those interested in mobile banking, comScore says, the leading service was checking account balances.
ComScore also said banks see online and mobile services as a competitive differentiator and a distinct reason more banks have started to offer these services.
Another analyst firm, Celent, has predicted that as many as 10% of consumers who use online banking services will use mobile banking by the end of 2007, although just over 1% of all bank customers use online banking now. Meanwhile, the Mercator Advisory Group says in a recent report that mobile banking fee revenues, which would be spread among banks, carriers, vendors and others, will exceed $1 billion in 2011. Mercator also is forecasting mobile payments volume to exceed $6.9 billion in the same time period.
“For mobile operators, mobile banking drives minutes of use and multiple fee opportunities,” Mercator’s study says. “For banks and payment networks, services fees and switching charges are available. For the first time, at least some of the interests of every element in the mobile ecosystem are served.”
IN THE FIELD
Mobile banking enabler Firethorn Holdings, which has deals in place or pending with BancorpSouth and Verizon Wireless, says a survey of BancorpSouth customers shows 30% plan on using mobile banking to pay all of their bills and 83% likely would recommend mobile banking to their friends.
BancorpSouth started offering free mobile banking services in March, but limited its use to AT&T subscribers with approved handset models. A bank spokesman says more handsets and carriers will be added later this year. Customers at the bank’s branches can check account balances, recent activity, transfer funds between accounts and pay bills. The service garnered several hundred enrollees in the first six weeks.
AT&T Mobility, formerly Cingular Wireless, has said it plans to offer mobile banking to customers at three other banks this year – Wachovia, Regions Financial and SunTrust Banks.
Citibank started offering its own free mobile banking service in April to its Southern California customers and says it hopes to expand the service. Customers also can check account balances and transfer funds, but can use AT&T, Verizon Wireless or Sprint networks initially. Citibank said at a press launch event it hopes to offer the service on more carriers and go nationwide this summer.
Citibank’s mobile banking technology was developed with mFoundry, which loads software on the handset to run the service directly through the bank. Citibank says the service is just as secure, or more so, than online banking. The software can run on more than 200 handsets with either Java or BREW application software.
MFoundry also says its technology can run on any wireless network in the United States, including MVNOs. Sprint signed on to mFoundry’s mobile banking and financial services in April, which links to any bank running mFoundry’s Spotlight Platform. The company says its mobile banking software also enables advertising and international usage. MFoundry also says it will have SMS and WAP mobile banking features this year.
Wells Fargo had a limited mobile banking service five years ago but signed up only about 2,500 customers in 18 months and shuttered the service. The bank, however, reportedly is working with ClairMail to launch a service later this year.
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Thompson: Seeking U.S.
systems integrators for
mobile banking. |
David Thompson, ClairMail’s marketing vice president, says he can’t confirm any discussions with Wells Fargo. But ClairMail did recently link up with the Canadian telecommunications company and wireless carrier, Telus, to offer mobile banking to Canadian financial institutions. Telus will act as a systems integrator. ClairMail also is seeking deals with U.S. systems integrators for mobile banking.
The Telus-ClairMail partnership will be pitched to retail banks, credit unions, brokerages, and credit card companies. Services to be offered include 2-way mobile alerts about unusual account activity, on-demand access to account information and customer service.
ClairMail, which started out offering technology to provide mobile access to enterprise data, has put that piece of its business on hold for the time being because there has been so much interest in mobile banking, says Thompson. He also cites research he says shows 40% of adult Americans would use mobile banking.
One of ClairMail’s bank customers has done a study on the ROI of using mobile banking, which showed a payback in less than three months, Thompson says. He says the bank’s customers even preferred using their phones over their PCs for banking. If that’s true, the future of mobile banking looks solid.