I spoke with mFoundry CEO/Founder Drew Sievers last week. If you want to get energized over the possibilities of mobile commerce, this is the guy to talk to.

Although mFoundry already has more than 100,000 users of its mobile application, we were most interested in its recently announced deal with Citibank. The bank is set to launch a full mobile banking application in Q1 2007 that encompasses both SMS-based banking and what we call True Mobile Banking (TMB), a banking application running on the mobile device (see definitions here).

While mFoundry's CEO cannot confirm which functions Citibank will use, the vendor's mBanking platform includes the following: 

• account inquiry
• transaction summary
• funds transfer
• bill payment
• ATM/branch locator
• password generator

The platform also supports advertising and service functions (download spec sheet here).

How it Works
The mFoundry approach uses both text messaging for alerts and simple inquires and a complete downloaded application that mimics Web-based online banking (i.e., True Mobile Banking). With True Mobile Banking, the user's phone carries a unique identifier that is registered with the bank (factor one); and before receiving data or initiating a transaction the user must log in with a password or PIN (factor two).

When the user logs in, current balance and recent transactions are automatically downloaded and displayed, satisfying most user needs within seconds. The application times-out after a certain length of time and more importantly, no data is retained on the device itself, so security is nearly perfect. If the phone is lost or stolen a call to the bank will deactivate the service, although as long as the password or PIN has not been revealed, there is little security risk. 

Analysis
As mentioned in our post three weeks ago (here), it's taken nearly a decade for me to jump on the mobile banking bandwagon. Earlier efforts were too hard to use and had limited appeal, primarily to a small group of PDA-toting geeks.

However, now that even basic mobile phones can use the service (see note 1) and top brands such as Citibank, Cingular, and MasterCard are poised to pump millions into educating the market, mobile finance should take off rapidly (see note 2). 

End Notes:

1. mFoundry says its service works across more than 200 different phones at the five major carriers, AT&T, Cingular, Sprint, T-Mobile, and Verizon. Sure enough, even our relatively inexpensive 2-year-old Sanyo is on their list of supported phones.
2. In order to download the mobile application, users select their carrier and phone type from sliding menus (see screenshot below, from mFoundry's My Mobile News).

2. The next issue of our Online Banking Report will contain a mobile banking forecast.