Those of you who read our Mobile Money & Banking blog are familiar with Brandon McGee, a frequent contributor. At the end of the year, we decided to consolidate the mobile blog with NetBanker, not because there is any less interest in mobile banking, but because it made it easier to search, read and write. All prior mobile posts have been added to NetBanker. 

Going forward, you'll read Brandon's insights right here on NetBanker. Mr. McGee is is vice president and senior product manager directing the mobile efforts at a major U.S. bank. He is a genuine industry insider who knows exactly what's on the minds of financial service pros as they contemplate the various mobile options.

In addition to his own Mobile Banking blog (here), Brandon is organizing a new industry group called Bankers Alliance for the Mobile Arena (BAMA). For information on how to sign up, read his blog post here.

To track his posts here, either select "McGee" from our Topic list in the top navigation bar, or use the site search in the upper right and input "McGee."

On October 22nd Wells Fargo announced that they would be adding an SMS component to their retail mobile banking solution. For those still unsure about the future of SMS in the mobile arena, let me remind you that it was merely six weeks ago that Chase announced their SMS solution.

However, that is not the most intriguing aspect of the story. What captured my attention is that Wells Fargo seems to have strategically positioned itself as the leader in mobile banking. In fact, WF has quickly and systematically laid the foundation for a very robust mobile offering. To recap, let's take a look at their announcements over the last six months:
    10/22/07 - Wells Fargo Launches Mobile Text Banking Service
    9/18/07 - Wells Fargo Launches Mobile Banking for Small Business Customers
    7/24/07 - Wells Fargo Launches Mobile Banking - Newest Way for Customers to Bank Anytime, Anywhere
    6/20/07 - Wells Fargo, Visa Launch Mobile Payment Pilot
    5/17/07 - Wells Fargo First to Offer Mobile Banking for Business Customers

Retail or business, browser or SMS, banking or payments, Wells Fargo seems to have a mobile solution that's either live or in development. Plus, don’t think for a minute that their solution is complete. Eskander Matta, SVP Wells Fargo Internet Services Group, said “...and this is just the beginning – we will continue to build a comprehensive mobile banking channel with solutions tailored to our consumer, small business and commercial customers.”

I guess what I’m trying to say is - keep an eye on Wells Fargo!

Note: Wells Fargo's PR strategy is right out of the textbook. The press releases are spaced approximately four weeks apart and contain just a single component. That keeps Wells Fargo in the news and top of mind. In broadcast advertising, it's called flighting.

Brandon McGee is vice president and senior product manager at The Huntington National Bank. He is not only the real deal, a genuine industry insider, but also knows exactly what's on the minds of financial service pros as they contemplate the various mobile options. For more great content, check out his blog, Mobile Banking.

Here is a copy of the press release just distributed:

Each month there is a new report published on the topic of mobile banking adoption (see my Mobile Banking blog for more on the recent Forrester report.) At first glance, there appears to be a wide variance in projections -- from enthusiastic to pessimistic. Yet, as you dig deeper and look at the definitions and methodology, I conclude that the various researchers have arrived at very similar projections.  

To illustrate, below are five reports published by the most well-known and highly respected vendors in the financial research industry. By reading the clips below you can see that three reports predict a low penetration number, while the other two reports suggest a more robust adoption. However, it is critical to understand the “base” for each estimate. Some researchers report adoption as a “percentage of total households,” while others project the “percentage of online banking users.”

Now, let’s perform a couple of calculations using with the assumption that 30% of households utilize online banking.

Glass is half empty:

Only 8% of people are interested in Mobile Banking.

(100,000 Households x 8% Adoption) =                                                 8,000 users

Glass is half full:

More than 30% of people are interested in Mobile Banking

(100,000 Households x 30% Online Banking Clients) = 30,000

Even though the headlines suggest very different outlooks about the future of mobile banking, the market penetration predictions vary by just 1%.

So, if you have been asking yourself, “How can two valid surveys return such different results?” The answer: they usually don’t. By looking at the forecast detail, you'll often find very similar projections. For more details on the estimates, refer to the following links:

Additional Research on Mobile Banking:
Mobile Banking - Getting it Right This Time - Javelin Strategy & Research

Brandon McGee is vice president and senior product manager at The Huntington National Bank. He is not only the real deal, a genuine industry insider, but also knows exactly what's on the minds of financial service pros as they contemplate the various mobile options. For more great content, check out his blog, Mobile Banking. 

AT&T has just launched a new page on their website dedicated to mobile banking.
It does a great job: 

1) Using the banner image to address the clients number one concern "safety"
2) Creating brand value for their participating institutions by including their respective logos.

This is a truly unique benfit of the Firethorn solution.

Brandon McGee is vice president and senior product manager at The Huntington National Bank. He is not only the real deal, a genuine industry insider, but also knows exactly what's on the minds of financial service pros as they contemplate the various mobile options. For more great content, check out his blog, Mobile Banking.  

It's official  - Chase is now promoting their mobile banking solution. View the full press release here.

As I have written before on my blog, Mobile Banking, all financial institutions benefit when the large U.S. banks begin promoting the channel; what follows is another perfect example.

Here is a well-designed, interactive demo from Bank of America. The bank did an outstanding job illustrating various situations where mobile banking can save time.

The demo covers the critical topics including:

• View Balances
• Pay Bills
• Transfer Funds
• Find Locations
• Security
• Get Started

In addition, the demo effectively incorporates a good cross section of target users:

• Jeanie – young, on a budget, needs to view her balance before a shoe purchase
• Jim – a white collar professional, traveling on business, needs to pay a bill
• Samantha – a busy mother of two, needs to transfer money to cover a bill
• Jake – a traveling student, is out of money and needs to find a branch

If you recently either have launched a mobile solution, or are preparing to do so, I highly recommend that you develop an interactive demo. It will help facilitate client adoption and reduce costly inquires to your already-busy call centers.

Last week, we received a tremendous comment/question from one of our readers, an officer in the risk-management department at a very large U.S. financial institution. His question, “I may have overlooked it, but did not see too much discussion around mobile banking fraud threats, such as mobile malware and smishing. Are these threats real? If so, what controls are financial institutions putting in place to mitigate these risks? Are there other mobile banking risks on the horizon?” 

That's a great question. Yes, threats of malware are real, and I expect to see the number of attacks grow exponentially greater over the next 18 months. However, so far only a handful of attacks have been recorded. See Wikipedia for a listing of mobile viruses.

The next question, “What controls are financial institutions putting in place?” The majority of financial institutions with mobile banking are using a vendor product; therefore, they are relying on the tools built in to the solution. In my previous entry on the subject (see Mobile Banking), I explained that after reviewing solutions from numerous vendors I believed they all had done a top-notch job making information security the number one priority. So, unless you are going to follow Bank of America and Wells Fargo down the path of an in-house WAP solution, you should find that the vendor has already addressed the issue on your behalf (see note 1).

That said, there is one HUGE security risk not receiving the attention it deserves and that is – THE CUSTOMER. As with online banking, the most critical element in reducing fraud is to simply educate the customer. Education can take a number of forms, including awareness campaigns, security checklists, recommended settings, and providing examples of how other clients have been deceived.

One good resource is the Microsoft page:  

Also, there are a number of companies already providing mobile antivirus security software including (note 2):

Bullgard
MyMobiSafe
Symantec
UMU
AirScanner
Kaspersky
F-Secure
Trend Micro

And as my Apple friends already know, the iPhone utilizes the OS X platform. While there is no guarantee, the accepted belief is that viruses are not an issue for Apple and that security software is not needed (note 1).

I hope this provides a better understanding of the mobile security environment. I encourage others to comment or send questions.

Notes:
(1) This is an opinion and not an implied guarantee of security or performance.
(2) This is in no way an endorsement of the product(s) or guarantee of performance. These were the top search results for the keywords “mobile antivirus security.”

When you first begin researching the mobile banking landscape, one of the challenges is understanding the interchangeable words used to refer to the three mobile banking options: Here's a quick primer:

The terms listed below are usually referring to a mobile banking solution accessed by typing or selecting a previously used URL into a Web browser on a mobile device. This method does not store any information on the handset, and is most similar to traditional online banking conducted on a personal computer.

• WAP Solution (Wireless Application Protocol 1.0 – 2.0)
• Thin Client (Lean Client)
• Browser Based Solution
• WML Solution (Wireless Markup Language)
• XHTML-MP

I'm not saying these terms all mean precisely the same thing. Clearly there are differences between WAP and XHTML; however, for the purpose of this article it is important to know that many people in the industry use these terms interchangeably.

The following terms apply to a mobile banking solution that is actually a software program. Currently, the program must be downloaded to a mobile phone. But by year-end, it is expected that some phones will come with the software already installed. For example, the Firethorn mobile banking solution will be installed or pre-loaded onto phones sold by AT&T.

• Rich User Experience (Rich UX)
• Downloadable Application (Downloadable App)
• Custom Application (Custom App)
• Thick Client (Fat Client)
• Applications designed in (BREW, Java, .Net, and MIDP2.0)

The final method generally is called one of two terms. Both revolve around sending text messages to what is called a short code. Think of a short code as simply a unique phone number for text messages. The financial institution publishes the number to customers just like their toll-free voice line.

• Short Message Service (SMS)
• Text Message Banking

If you would like to learn more about the current status of mobile banking, or if you are wondering about the future of mobile banking, I recommend reading “Leveraging the Third Screen” published by Online Banking Report (see screenshot above), the parent of the Mobile Money & Banking Blog.

Now, down to business. Whether you buy into the hype or not, mobile banking is one of the hottest topics in the financial industry today. There are hundreds, perhaps thousands, of financial institutions trying to decide what, how, and when to adopt mobile delivery. One of the best ways to determine where the market is going is to simply watch the big guys.

So, earlier today as I was updating my personal blog, Mobile Banking, with the recent news about Wells Fargo, I thought it would be a good time to summarize the mobile strategies of the top-10 U.S. banks. The following table includes mobile banking availability and whether they've selected a downloadable app (Rich UX), a mobile website (WAP), and/or text-message solutions (SMS):

Analysis
So, what does all this mean? Not much ... yet. The word on the street is that there are still a lot of announcements pending, and not just from the uncommitted banks. A number of the mega-banks are rumored to be implementing multiple solutions to provide a more robust offering and hedge their bets. The next six months could bring substantial change to the above chart. Stay tuned — it’s going to be a wild ride.

1. In the United Kingdom, HSBC is charging a fee for mobile delivery. For more information, see my recent Mobile Banking post here.

2. The Monilink website lists RBS as a provider “coming soon” to the United Kingdom.