This month we've explored several new features that promise to propel mobile banking into the mainstream market. Unlike developing nations, where mobile is the ONLY way to conveniently bank, in the U.S. and other online-centric countries, mobile has to compete with online for awareness and usage.

There doesn't seem to be a single killer app for mobile. But there is a growing list of things that mobile does better than online that will eventually tip the scales in favor of the new channel. Here's what we've seen so far:

• Location-based ATM/branch finders (here)
• Remote check depositing (here)
• Simple login with 4-digit pin (here)
• Insurance discounts after graduating from iPhone-based program (here)

The latest addition to the list:

• PayPal's Bump to Pay (see video below): Users of PayPal's latest iPhone app can transfer funds to each other merely by entering the amount and moving their phones within close proximity of each other (see screenshots below).

PayPal demos bump to pay

As David Eads points out at Mobile Manifesto, bumping to pay has some drawbacks in the real world:  

.....most of the time I want to send money to someone, I’m not standing beside them. And if I am, most of the time I would feel awkward actually touching the person. Imaging bumping someone for admission to a high school football game. Imagine bumping a street vendor for a newspaper or flowers. Imagine bumping a scalper for tickets outside the game.

My take: I agree with David that physically placing iPhones next to each other seems awkward today. But then again, so was writing paper checks back in the day when everything was paid for in cash/coins.

If so-called bump pay is super-convenient, fairly priced, and the perceived security issues are overcome, there's no reason why it couldn't become the predominant method of person-to-person payments. It's way too early to make any kind of prediction, I'm just saying, don't dismiss it yet.

David's closing remark is spot on:

The key for P2P is getting people comfortable with the idea of transacting electronically between individuals. Bumping and Zooming makes it more fun.

Bumping is now an integral part of PayPal's iPhone app

-----------------------------

Off-topic addendum: As much as we like new bells and whistles, bump-to-pay pales in comparison to the really big news at PayPal this week: the announcement that it's teaming with China UnionPay and Singapore's DBS Bank to offer payment services. The 2-year DBS deal will put PayPal in the hands of the bank's four million customers, 1.3 million of which are currently banking online.

How big are these deals? A good indicator is PayPal's plan to double its staff in the region to 2,000 employees. Wow, has any financial company anywhere in the world added 1,000 to its staff in the past two years?

-------------------------------

Note: For more coverage of mobile banking and payments seen the most recent issue from Online Banking Report.

The latest Online Banking Report: The Case for Mobile Banking is now available. It will mail next week to OBR subscribers. It's also available online here. There's no charge for current subscribers; others may download it immediately for US$395.

There is little doubt that mobile is the next online, not just in banking, but with many information-rich, time-sensitive services. Even in the online-centric United States, we expect mobile banking to eclipse online by the end of the decade. 

Another way to look at it: Starting from essentially zero just three years ago, more than half of the U.S. online banking population will be using mobile banking, by 2015. That's zero-to-40 million households in just eight years.

Most financial institutions should be making their mobile bets during 2010/2011. The report outlines ten ways that mobile banking supports overall strategic goals at financial institutions. It also includes our ten-year forecast for U.S. mobile adoption (note 1).

This report is number four in a series we've published on the mobile area during the past three years:

Note:
1. The mobile forecast was originally published last month in our year-end recap.

Last week I talked about how USAA is making the mobile experience better than online thanks to the magic of mobile remote deposit and PIN-based login. For the sake of discussion, I'm defining magic as anything you could not have imagined doing on your mobile phone two years ago (note 1).

The latest novel financial app: State Farm's Steer Clear program that provides auto insurance discounts "up to 15%" for new drivers (under age 25) that pass its safe driving program. Users can undergo the self-assessment program online or off, but the app makes it easier and with a built-in stopwatch (screenshot below) to track the required 20 practice drives. See how it works in the company's video below (press release here; iTunes link here). 

As much as I like it, the State Farm app doesn't quite make it into the magical category. Had it used GPS to automatically track the 20 practice drives, it might have passed the bar. I'm sure that's in a future version.

Regardless, it's clever, unique and positions the company well with the youth market and their parents that often foot the insurance bills. That's a good return on the small investment needed to port the program over to a mobile app (note 2).

Notes:
1. I am using two years, since that predates the opening of the iPhone App Store in July 2008.
2. Read more about the strategic advantages mobile banking can give your financial institution in our latest Online Banking Report published today.

Stories from our Finovate blog are covering the most innovative financial technology companies in the world, and more alumni news is available on our Finovate Twitter feed.

Half of Fast Company's 10 Most Innovative Financial Companies are Finovate Alums

Fast Company's list of the 10 most innovative financial companies includes five Finovate alums - FiLife, Intuit, Yodlee, Credit.com, and Simplifi. FiLife was not only #1 in finance, but also the only financial company to be ranked in the overall Top 50.

Finovate alumni commanded the top three positions, with Intuit and Yodlee following FiLife. Credit.com was #7 and Simplifi was #9 (full post here).

FiLife and Mint Top Finovate Alumni Traffic Chart

FiLife also has the highest website traffic among Finovate alums with more than 2.7 million visitors. Mint was second with 1.7 million. FiLife and Mint were also the fastest-growing alumni sites, gaining 2.6 million and 612,000 visitors respectively over the previous year.

And the zero-60 awards go to ThreatMetrix and Home-Account who both went from zero to nearly 200,000 unique visitors, a phenomenal amount of traffic for a financial company in their first year (full post here).

Firethorn App Provides Mobile Access to More Than 3,700 Financial Institutions

Firethorn has updated its mobile banking app to allow consumers to access accounts at more than 3,700 U.S. financial institutions. Expanding beyond its current list of integrated banking partners brings the company's app to a wider range of consumers.

Since its mobile app interfaces with existing online banking systems, Firethorn can provide consumers with mobile banking even when their bank doesn't support it. The app also gives users the ability to access account information from multiple institutions from within a single interface (full post here).

Jawalla Adds Skype and Twitter Alerts to its Online Banking Platform

Jwaala has added Twitter and (in what we believe to be a first) Skype alerting capabilities to its MoneyTracker BOB (Better Online Banking) platform. The addition gives Jwaala's clients the ability to offer consumer alerts through channels already familiar to their customers.

Alert systems are important to financial institutions because they provide personalized information to customers where and when they most need it. Expanding its alert capabilities helps Jwaala differentiate itself from competing platforms (full post here).

Here's a test that tells you when you've built a successful mobile app:

1. Place your laptop next to your iPhone/Android
2. Choose a task
3. Reach for the device that's easiest to use for that task 

If you don't reach for the mobile phone first, you still have work to do on the user experience. 

I've always chosen the laptop for banking, even though I've ported more than a dozen other routine tasks to the iPhone (note 1). The hassle of logging in with those tiny iPhone keys pushes me to the laptop. But as of Tuesday, USAA's latest iPhone app, version 2.2, has changed the equation, and there's no looking back. 

Mobile vs. online banking
The key to making mobile a profitable channel is to make the user experience BETTER than online. And USAA is the only U.S. financial institution doing that today.

USAA's biggest mobile "wow" is mobile check deposits (see Deposit@Mobile screenshot below) introduced six months ago for the iPhone. While it may not seem novel to those in the industry familiar with scanner-based remote deposits, the average consumer considers an iPhone check deposit to be almost magical. Other than a few small credit unions, no other major banking competitor offers it, so USAA continues to own mobile magic.  

But with Bank of America rumored to be readying a launch mobile deposits, which will no doubt be featured in Apple TV ads, (see latest one here), USAA needs to keep innovating. 

And this week, USAA delivered with a single-PIN login with authentication powered by VeriSign VIP service. The optional 4-digit sign-on process is available now on the iPhone and will be available in April for Android and "shortly thereafter" for Blackberry (note 2).

In a time when it's more tedious and less secure to log in online, USAA takes us back in time to a simpler day, when you could log in with just a few digits.

And by using techniques that authenticate the mobile phone during login, the bank says that mobile access is more secure than online.

Think about that for a moment. Mobile is MORE SECURE than online. With tens of millions of customers deathly afraid of logging in via their virus-laden PCs, imagine what that could do for mobile adoption.

It will take time to educate the market. Currently, most consumers believe the mobile channel is far less secure. But if they can be convinced the opposite is true, many will kiss online banking goodbye forever.

Notes:
1. According to yesterday's release, USAA has 1.3 million mobile users, 17% of its 7.4 million customer base.
2. Previously, USAA users were required to sign on with username, password and PIN. The simple sign-on process is optional for those not trusting the simpler process.
3. For more info on financial services opportunities on the iPhone, see our March 2009 Online Banking Report.

Apple today introduced its latest invention, a gigantic $499 iPod Touch called the iPad (inset shows iPad, Kindle, vs. iPhone; note 1).

It's a gorgeous piece of technology that will soon be the movie-watching, ebook-reading device of choice for the rich and famous. But what does it mean for the average financial institution?

Tactically, it should have almost zero impact. Your iPhone/iTouch app should work pretty much the same on the iPad. There may be some design tweaks your programmers will need to understand, but the basic functionality is the same.

It would make a wonderful giveaway item, either as part of a high-end business/private banking package (note 2), or as a sweepstakes prize.     

So those of you who already have an iPhone app launched, or in the pipeline, can stop reading now. But read on if you haven't yet hopped on the app bandwagon.

___________________________________________________________________________

The movement to apps, and away from old-school "browsing," is unstoppable. The iPad joins a growing list of new devices (Android, Kindle, etc.) that are app-primary, browser-secondary (note 3).

It's a massive shift that's happened in less than two years, beginning in July 2008 when Apple opened the iPhone platform.

The popularity of apps is changing how users tap online info. Even power laptop/desktop users are making dramatic changes in their information consumption. For example, within a few months of the Apple app store launch, I had already moved 12 of my routine info-gathering tasks to the iPhone. The speed/convenience of pressing a single button vs. navigating to a website via the browser is a significant improvement in user experience. More than a year later, my habits have changed little. 

The change from serving customers who were "online browsers" and are now "mobile app users" has profound implications for banking. Instead of talking to your customers in batch- mode with built-in time delays, you are now real-time, feeding data to customer on the go, where they need up-to-the-minute status on their cash situation.   

In many ways, the ROI for real-time banking (and here) is more dramatic than online-batch banking. The ability to stamp out POS fraud, to nip budding customer service nightmares, and just plain get closer to the customer, all bring nice returns on the mobile investment (note 3).

Notes:
1. Photo credit: TechCrunch post today.
2. For more info on using a dedicated device for small business customers, see our October Online Banking Report.
3. Groundswell author and Forrester analyst Josh Bernoff calls this the "splinternet."
4. For more info on financial services opportunities on the iPhone, see our March Online Banking Report.
5. Initial response online was mixed, 2,700 readers of CrunchGear, voted "thumbs sideways" today (link, results at 4PM Pacific below)

In November, we predicted that large financial institutions would each offer dozens of mobile apps targeted to various lines of business and/or customer segments (previous post). PNC Bank, Wells Fargo and Chase each have two apps in the iPhone store.

Three weeks ago, a fourth financial company added its second app: Nationwide Insurance.

The company originally launched an app (inset) geared towards its insurance customers in April 2009 (press release; iTunes store link). This app is designed to assist its insurance customers when they have an accident. The most recent version includes a toolkit, auto claim form, agent finder and even a flashlight.

Then in mid-December, the company released a second app geared towards automobile shoppers, Cartopia (screenshots below; iTunes link; press release). It helps buyers research prospective cars on the go.

By inputting a vehicle identification number (VIN), consumers can quickly access the following info on a prospective vehicle:

• Car specs (fuel economy, dimensions, weight, etc.)
• Average retail and wholesale prices
• 5-year cost-of-ownership estimates
• Original warranty info
• Safety info
• History of the VIN number, powered by Experian's AutoCheck (similar to Carfax report; limited to six free lookups each month; note 1)

In addition, users can calculate monthly loan payments with a built-in loan calculator. Nationwide also provides links for customers to call in to apply for vehicle financing and or receive an insurance quote. Unfortunately, there is no online loan application or insurance price quote engine.

Finally, the app contains space to keep notes and rate the cars you are considering purchasing.

Relevance to Netbankers: If you are in the auto loan and/or insurance business, getting your name in front of car buyers as they shop is the ultimate marketing coup. While you may not be able to emulate all the functions in Nationwide's app (note 2), even a simple loan calculator and note-taking area, along with links to your call center, could drive incremental business.

                                                                                    Cartopia #2 Main Loan info with link to
     Cartopia #1: Splash screen                          insurance quote (via voice call)

Notes:
1. I was unable to access the report on my test vehicle; the error message said it was temporarily unavailable.
2. Although the app is loaded with features, its UI is a bit clunky and the app is only rated two stars in Apple's App Store. Consequently, a slimmed down, simpler app, would appeal to many users.  
3. For more info on financial services opportunities on the iPhone, see our March Online Banking Report.

Mercantile Bank of Michigan is riding the wave of free publicity from being first to market (probably) with iPhone-based P2P payments powered by PayPal. That's a triple play in both alliteration and PR value. See the teaser ad on the bank's website below (first screenshot).

The new service, a joint effort from PayPal and S1, is expected to go live in early 2010. It will allow customers to send money directly from their iPhone to any other individual on the worldwide PayPal network. All the sender must know is the recipient's mobile phone number or email address. According to the five-question FAQ on the landing page (see second screenshot), the service will be available to all MercMobile customers and will be free of charge.

Mercantile Bank has become one of the most innovative banks we follow. Congratulations to CIO John Schulte and his team for leading the industry on several fronts and providing great material for Netbanker (previous posts here; note 1).

------------

For more on the P2P payments market, see our latest Online Banking Report, published earlier this week, Making the Case for Person-to-Person Payments. 

Mercantile Bank's powered-by-PayPal mobile P2P app (7 Dec. 2009):

Mercantile Bank of Michigan homepage (8 Dec. 2009):
Note: MercMobile P2P Payment teaser in lower left and home-based remote-deposit capture on the top banner.

P2P payments landing page (link)

Note:
1. Mercantile even earns its very own category at Netbanker: <netbanker.com/mercantile_bank_of_mi>. 

It appears that the Obopay/Citibank co-branded service is being shut down. From the sparse note on the webpage <citi.obopay.com> (see screenshot below), it doesn't sound like a temporary hiatus: 

As of Dec. 22, 2009, "Citi Obopay" will no longer be available.
If you would like to use the Obopay service go to www.obopay.com.
The service available at www.obopay.com has no affiliation with Citibank.

The companies have been working together on Obopay-powered mobile payment for more than three years.

Citi Mobile SVP Marylou Dowd said on Thursday in American Banker that the Obopay tests were concluded this summer. Not coincidently, Citi's mobile joint venture MMV announced last week that it was partnering with CPNI Inc. of Toronto to build a mobile P2P payments service.

Obopay's website still shows Citi Obopay on its Financial Institutions page (see inset above). But Citigroup, which invested at least twice in Obopay in the July 2007 C-round and April 2008 D-round, is not listed on Obopay's investors page.

The site was never publicized by Citibank. Traffic peaked at 7,000 unique visitors in Feb. before falling so low that Compete could not measure it after April 2009:

Source: Compete, 3 Dec 2009, link

For future reference, we've archived the website screenshots below.

Citi Obopay homepage (3 Dec 2009, 4 PM Pacific)
Note: The <citi.obopay.com> URL now redirects to the Obopay homepage.

How Citi Obopay Works page <citi.obopay.com>

Get Citi Obopay page <citi.obopay.com>

Citi Obopay Fees page <citi.obopay.com>

Note: For more info on mobile banking, see our Online Banking Report: Mobile Banking via iPhone (March 2009) as well as our earlier reports on Mobile Banking (Feb. 2007) and Mobile Payments (April 2007).

A few days ago, we predicted there would be tens of thousands of financial institution iPhone apps as the big banks released dozens to support their major business lines. PNC Bank and Wells Fargo were the two examples we cited.

There's another multi-app bank: Chase. In our search for an iPhone gift planner to replace the web-based Zions Bank service, we ran discovered the bank's Gift Planner (iTunes link).

Version 1.0 was released in time for the holidays last year (3 Dec. 2008), but it looks like Chase didn't take over ownership/sponsorship until release 2.0 in August. The app is supported by an excellent small website at yourgiftplanner.com that displays the app and solicits feedback.

The app and website are 100% Chase branded. The only indication that a third party is involved is a notation in the iTunes store that the app is sold by The Archer Group (inset), a Wilmington, DE-based digital agency.

Evidently, the app didn't show up on our radar because it's placed in the App Store Productivity category instead of Financial. The app doesn't appear to be mentioned on the Chase main website. A site search there came up blank.

Review: It's great looking app that can be used for any holiday. The app supports "shake for help," an advanced feature. The integration with your contact list makes it easy to add new contacts without typing, although you must wade through your entire list. And, the process of adding gifts is a bit tedious. You have to add a gift to the master gift list, then go to each person and add the gift to their profile. It would be better if you could simply type a gift on the fly.

iPhone users have been relatively unimpressed, giving the latest version a 2-star rating out of five; pretty low for a professional app (see inset).

It's a good branding tool for Chase, but it the app itself could use retooling.

Gift Planner iPhone screenshots (24 Nov 2009)

Gift Planner website (link)

Note: For more info on mobile banking on the iPhone see our March Online Banking Report.

Are you tired of hearing "there's an app for that" yet? Well, get used to it, we are still at the beginning of the great app rollout. 

Even as recently as our iPhone Banking Report published in March, I assumed most financial institutions would have a single iPhone app. One bank. One app. It's how the Web worked, for the most part.  

But when Starbucks unveiled a dedicated app just for its stored-value card (separate from the main Starbucks brand app), I realized that I wasn't thinking big enough.

For example, in August PNC Bank become the first U.S. financial institution to offer multiple apps when it released an app for its Gen-Y-focused Virtual Wallet. That was followed last week by Wells Fargo when it unveiled its cash-management app for larger businesses, CEO Mobile (screenshot below; press release).

Now, I believe that each major bank will roll out dozens of apps, perhaps hundreds, to support their business lines, major products and large segments. There will be an app for each major affinity credit/debit card, one for students, one for small businesses, one for large business, one for senior checking, one for home equity lines, and so on.

And, if that's not enough, there could be a dedicated app for each stock broker, loan officer and mortgage broker. There could be one app for every branch, neighborhood, or region. Right now the search-and-discovery tools at Apple would implode under the weight of all these apps. But they'll figure that out. It's worth billions to them. 

Today, more than 100,000 apps are available for the iPhone. But fewer than 20 are for U.S. financial institutions. It's conceivable that in the banking vertical itself, well over 10,000 apps could be developed, possibly many tens of thousands (see notes 1, 2). 

Wells Fargo is first U.S. bank with a cash management iPhone app (12 Nov 2009)

Notes:
1. They won't all be iPhone apps. The mobile market is too big to have it all consolidated at one player. 
2. It's also conceivable that we'll move away from the dedicated app framework, and users will be able to configure their phones with hundreds of info feeds without needing to install an app for each one. More like the iGoogle portal model.  It will be fascinating to see how it plays out.

The biggest surprise of the year in the world of alt-payments is PayPal's newfound reach into banking circles as evidenced by their agreements with S1, FIS, and FirstData announced at last week's Retail Delivery conference.

But a huge question remains: Will banks play ball with PayPal or will they provide the same functions via home-grown solutions or non-PayPal alternatives such as CashEdge, Fiserv, or Visa/MasterCard?

I don't think anyone has that answer yet. There are simply too many variables. But if you believe there's no way a bank would use a "powered by PayPal" solution, read this quote by Mercantile Bank of Michigan's CIO, who plans on launching the S1/PayPal person-to-person mobile service next year (note 1):

"(PayPal) is a network, it doesn't scare me at all. They're never going to steal significant deposits out of our bank and keep [them] in PayPal accounts. Visa and MasterCard probably look at PayPal as the enemy, and they probably should, but that's their problem, not mine."
   -- John Schulte, CIO Mercantile Bank of Michigan in a
       Nov. 10 article from Digital Transactions

Note:
1. You might remember Mercantile Bank from our May post lauding its fee-based consumer positive-pay service.

In an article in today's Austin Business Journal about the coming launch of mShift-powered mobile remote deposit at Randolph-Brooks Federal Credit Union, the CU revealed its penetration number in its EasCorp-powered, home-scanner-based service, eDeposits:

Total members: 300,000
Total checking account customers: 202,000
% of checking using remote deposit: 5%
Number of remote deposit users: 10,000 (derived)
% of members using remote deposit: 3+% (derived)

The San Antonio, TX-based credit union expects more mobile users than in-home users. The product, which debuted at Finovate on Sep. 29, is currently being tested with employees before it rolls out to select customers.

USAA was the first major financial institution to launch mobile remote deposits in August.  But WV United beat them to market in July earning our OBR Best in the Web award. And this week, speaking at BAI Retail Delivery, Bank of America's Doug Brown was bullish on the feature, leading many to believe that the giant would add the feature to its mobile offering at some point (see note). And if that happens, it's not inconceivable the feature could show up in television commercials, either from BofA or Apple.

Note:
1. In response to an audience question after his presentation, Brown said that the bank was seeing 1 million envelope-free deposits made at ATMs every day, and "there was an obvious use-case in mobile". Note that he did not specifically say, or even directly imply, that BofA would launch it, but he also didn't dismiss the idea. 

Once again, the first mover gets the attention. Bank of America, long a fixture in Apple iPhone advertising, now figures prominently in Sprint's marketing for the Google's Android marketplace.

In a whirling dervish of apps on the Sprint microsite, Bank of America's mobile banking app appears in the second set of four apps displayed (see screenshot below). 

Spring microsite featuring BofA app (link, 21 Oct 2009)

Android market has BofA mobile banking on the second page of top free apps (link)

Note: For more info on mobile banking via apps, see our Online Banking Report: Mobile Banking via iPhone (March 2009)

There was an interesting piece by Jessica Vascellaro in the Technology supplement of today's Wall Street Journal. The title says it all, "Why Email No Longer Rules....and what that means for the way we communicate."

The primary thesis:

• Old-school email is a passive way to communicate, more like a letter, and has been overrun by more information than the technology can manage.
• It will be replaced by more active services (e.g., Twitter, Facebook) that are akin to a conversation with filtering technology to keep noise levels down.

But Techcrunch's MG Siegler's take on the matter is even more profound. He argues that the winning technology will be something that combines both active and passive communication, such as Google Wave (see inset; short video explanation here). Users will be able to choose between active or passive, or anything in between, depending on the situation.

Relevance for Netbankers
The passive vs. active communication metaphor is a good one for banking too. Passive banking is the old way of doing things. We waited for our monthly statement, balanced the account, and walked in to the branch or called customer service if there was a problem, usually many weeks after the fact.

Passive banking is not a bad thing. As long as there are no problems or financial shortfalls, it's the desired state for most customers. 

Telephone banking, then online banking, made it much easier to keep closer tabs on your account. Instead of reviewing transaction activity once per month, most users log in at least once per week to review activity. This helps ease anxiety during the intervals between looking at your data.  

But it's still passive in the sense that a user deals with banking only when the choice is made to log in. And that passive nature limits the usefulness of online banking in situations where a user needs to pay attention NOW! For example, security issues, low-balance alerts, over-budget warnings, and so on.

Enter mobile banking. With text messages or direct-to-the-phone alerts, users can have an always-on, or active, connection to their accounts. This is great for those infrequent, yet urgent, events such as authorizing an unusual card transaction.

But most users will want to be in active banking mode as little as possible. So the challenge for financial institutions will be to make it easy for mobile users to balance "active banking" (alerts, warnings) with "passive banking" (logging in, requesting more data, changing settings and preferences).

Ultimately, companies that well manage this communication challenge will have customers for life.

Notes: For more info on mobile banking, see our Online Banking Report: Mobile Banking via iPhone (March 2009) as well as our earlier reports on Mobile Banking (Feb 2007) and Mobile Payments (April 2007).

As an analyst who covers new developments in online and mobile finance, I will forever be grateful to Apple for opening up the mobile-phone platform, thereby unleashing a rush of innovations sure to rival the Internet circa 1995 to 2001 (note 1).

The latest financial app is from none other than Mercedes-Benz. The luxury-car maker has several iPhone apps available to its fans, but the latest, which appeared in the App Store last Tuesday, is specifically designed for its finance customers (iTunes link to app). It's the first captive finance company with its own app, at least in the U.S.

Other than the striking homepage image, the app is pretty pedestrian so far. It allows registered users (note 2) to make a car payment, calculate the pay-off amount, and find dealers and customer service numbers. In other words, it's a lot like the company's website ten years ago (note 3).

But that's OK, for now. Financial brands should take advantage of the free publicity of the iPhone App Store and  post something, even if it's just a window to their Web app (worked for Bank of America).

Along those lines, SunTrust (iTunes link) is the latest megabank to join the store (last week), leaving US Bank, Capital One, BB&T, and HSBC as the remaining top-10 U.S. retail banks without their own iPhone app. Who will be the last one in?

Mercedes-Benz Financial's homepage includes iPhone link (6 Oct 2009)

iPhone landing page (link)

Notes:
1. For more info on the market, see our Online Banking Report: Mobile Banking via iPhone (March 2009)
2. Users must set up a profile online at Mercedes-BenzFinancial.com  before accessing their accounts via iPhone.
3. But I'm kind of surprised MB didn't include a payments calculator, standard fare at most car sites.

In 2006, we predicted that every major bank and credit union would someday have a blog (note 1). That prediction was looking downright awful until Twitter came along. The popular, and much-hyped service, is part blog, part social network, and part text-messaging.

Financial institutions have embraced Twitter much faster than blogging because it's low cost, drop-dead simple to implement, and relatively cost-effective to staff and manage. Our good friend, Christophe Langlois, who has been tracking social media implementations at Visible-Banking for several years, has identified 120 financial institution blogs worldwide. In comparison, Christophe is tracking more than 700 Twitter accounts. Similarly, Jeffry Pilcher's exhaustive Twitter directory at The Financial Brand lists about 600 Twitter accounts in use by financial institutions.

Vantage CU takes the Twitter plunge
Although Twitter can successfully be used as a simple one-way broadcast medium (i.e., microblog), it's also a powerful two-way and group communication service (note 2). Wesabe, in 2008, and Xpenser, earlier this year, were the first online PFMs to leverage Twitter for posting transaction info to user accounts. But St. Louis, Missouri-based Vantage Credit Union took that one step further by allowing users not only to query their accounts, but also to move money between them.

At the core, Vantage CU's Twitter service is little different than hundreds of SMS/text-message mobile-banking services already in use around the world. But for Twitter users, it allows account queries from anywhere a Twitter client is loaded: smartphone, laptop, or desktop (note 3).   

How it works
Vantage CU posted videos showing how it works. But if you are a Twitter user, you can skip the tutorial. You'll understand right away: After signing up for the service at Vantage (inset), simply follow the CU on Twitter (@myvcu) and send them a direct message whenever you want to see your balance, recent transactions, or to initiate a funds transfer.

While the process is relatively intuitive for Twitter users, the command-code language limits the usefulness. The results look like a throwback to the DOS command line circa 1985 (see first screenshot below). It would be much simpler if the CU offered plain English commands and account nicknames, e.g., "transfer $500 from wifechecking to mychecking" instead of "#trans f9 t0". Ideally, the CU would support short codes for its power users and plain English commands for everyone else.

That said, it's pretty simple to remember how to make a checking account balance inquiry, "#bal 9" (9 is the code for checking), which is the primary way the service will be used.

Website implementation
Few members will actually use Twitter banking, at least initially. The main reason to embrace Twitter is for the publicity and brand value, especially when you are first.  Vantage takes full advantage of its first-mover position, placing a headline on its homepage, along with a Twitter feed directly below.

Other things Vantage CU does right:

• Posted four how-to videos (although, the CU needs to choose a faster host for the videos because the Screencast-based videos run way too slow)
• Posted FAQs, instructions, and screenshots
• Wrote a blog post about the new service
• Proactively reached out to bloggers resulting in great initial coverage (Financial Brand, Everything CU, and Currency Marketing) which can help bring mainstream press coverage later
• Allows users to subscribe to the Twitter feed via RSS (directly from the CU's homepage)

Analysis
The PR value alone should more than justify the expense of Vantage CU's Twitter service. And if Twitter continues to work its way into the fabric of consumers' daily lives, the service could attract a decent following.

In keeping with our 10-year tradition of recognizing new online "firsts," we are awarding Vantage a 2009 Best of the Web award (note 4) for being the first in the world with full-service Twitter banking.

Vantage Credit Union homepage featuring new Twitter service (5 Oct 2009)

Notes:
1. See our Online Banking Report: Bank 2.0 (Nov. 2006).
2. For more info, see our Online Banking Report: Leveraging Twitter (May 2009)
3. However, text-messaging users would likely prefer to make balance inquiries directly from their phone's SMS function, rather than taking the time to open the Twitter app or website. The most likely user is someone already using Twitter who decides to do a quick banking inquiry while Tweeting. 
4. OBR Best of the Web awards are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. Vantage Credit Union is the 75th recipient since we began awarding it in 1997.

Two days ago (here), I wrote about Citibank's smartphone banking awareness campaign on its homepage. Coincidentally, ABI Research yesterday published a rating of 17 U.S. major retail banks plus a dozen community banks (see note 1) on "discoverability" and "accessibility" of their mobile banking services (press release).

Surprisingly, ABI rated Citibank "average." I'm not sure what Citi did wrong (note 2) to get a "C," but one common technique of all ABI's A-students (see table below), is a "mobile banking" link on the homepage (see screenshots below).

Observations:

• Wells Fargo is the only bank to publicize a short mobile URL, wf.com (see final screenshot)
• USAA is the only one of the six with an iPhone-optimized page rendered for users visiting its regular URL (see note 3) from the iPhone browser; this would be a minimal requirement for an A on our scorecard (if we were to make one)
• Two of the six A-rated banks, BB&T and Northeast Bank, were also rotating a mobile banner ad on the homepage (see screenshots below).

Here are the ABI Research ratings:

The A students (all screenshots from 10 Sep 2009)

BB&T

Eastern Bank

Fifth Third Bank

Northeast Bank

USAA

Wells Fargo

Notes:
1. Another community bank with great mobile awareness is Farmers State Bank (click on inset right for a larger screenshot). Thanks to Laurie Goodlock at the bank for the tip.
2. We've requested the full report.
3. wf.com visitors also see a mobile-optimized site in their iPhone browser
4. Reference: Online Banking Report on Mobile Banking (Feb 2007) and Online Banking Report: Mobile Banking via iPhone (Mar 2009)

Yesterday, Apple announced it has shipped 50 million iPhone/iPod Touches in the past two years. And they are not even the smartphone leader. You can bet that many (most?) new smartphone-owning-online-banking-using customers haven't a clue how to connect to their financial institution through their mobile. And even if they know how, there's still that nagging doubt as to whether it's a safe/smart thing to do.

Therefore, if you want to drive significant mobile usage, there are a number of steps to take (see note 1). But one of the most important is user education, especially through online information, screenshots, and demos. 

Citibank recently elevated general smartphone awareness to its homepage (see first screenshot below). Yesterday, the bank was rotating an "Introducing CitiMobile for Smartphone" banner across the top of the homepage. The banner led to an educational page (see second screenshot, note 2), that led to clear instructions on how to bank via a mobile browser:

• Open browser
• Go to citi.com (note 3)
• Log in using your same online banking credentials

While brevity is admirable, I think customers need a little more info than that. For a non-user, the process sounds almost too good to be true. The bank should elaborate on some key questions such as:

• Is it secure? (see update below)
• What does it cost?
• Does it work on my phone?
• What if I lose my phone?

Luckily, interested users can go to the well-designed demo that takes users through a semi-guided tour of the mobile banking functions. The Flash-based demo is partially interactive, allowing users to click buttons on a smartphone emulator (see third screenshot). After clicking on a new function, the demo takes over, completing the data entry and going forward to the next screen. Check it out here. 

Update (22 Sep 2009): An email from a Citi Mobile employee pointed out that I missed the security and other info in the right-hand column of the landing page below. I apologize for the omission. 

Citibank homepage (9 Sep 09)

Citi Mobile for Smartphones landing page (link)

Citibank mobile demo with interactive emulator

Notes:
1. For more info, see Online Banking Report on Mobile Banking (Feb 2007) and Online Banking Report: Mobile Banking via iPhone (Mar 2009)
2. The bank has separate pages for: Citi Mobile for iPhone and Citi Mobile for Other Models
3. Citi still has some work to do on optimizing the mobile Web experience (see update below). I navigated via my iPhone to its homepage (see inset) which looks terrible: The page is rendered impossibly tiny (requiring finger zooming), and because the two Flash-based animations don't work on iPhones, the top of the page is dominated by two empty boxes.

Update (22 Sep 2009): The site is now rendering perfectly on my iPhone. I see a mobile-optimized site similar to the Citi iPhone app. I'm not sure what was going on Sep 10 when I took this screenshot. It's possible I got the wrong page by navigating to Citi through the Google app. 

Have I mentioned that the iPhone is amazing? I'm not sure if it's because it's so useful having a computer in my pocket 24/7, or that it gives me so much material for Netbanker and Online Banking Report (probably the latter).

Now that we are beginning the second year of the App Store, we are starting to see some more interesting things on the finance front. For the first year it was all about tip calculators, balance inquiry, ATM locators, and manual-entry expense trackers.

This summer, we're beginning to see the bigger potential with the launch of remote check depositing from WV United Credit Union and USAA (which also loaded helpful auto insurance features into its app). And Apple's new OS 3.0, which supports push notifications, will be a boon to mobile banking apps.

But that's just the beginning. There will be an app for anything you might want to do with your finances. The latest: a free Home Loan Toolkit for prospective home buyers from ING Direct Australia. The app appeared in the U.S. App Store yesterday (here).  There's no mention of it on the bank's website yet, but Google pointed me to the well-designed microsite (here) supporting the app (screenshot below).  

It's pretty straightforward with just three functions:

• Calculators to determine how much you can afford to borrow and what the payments would be
• A call-me request form
• Average home prices by area

Screenshots from ING Direct Australia's new iPhone app (3 Sep 2009)

ING Direct Australia iPhone Home Loan Toolkit microsite (link, 3 Sep 2009)
Note: The five iPhone screenshots (above) rotate through the iPhone pictured below. Alternatively, users can scroll through the screens with the control under the phone.

-------------------------------------------------------------------------

Note: For more info on the native iPhone apps, see Online Banking Report: Mobile Banking via iPhone.:

I've written plenty about the importance of the iPhone App Store, both here and in Online Banking Report (note 1). But there's one subtle side benefit I hadn't thought too much about previously. 

Every time a new version of a native app is released, users must take action to download it if they want the new features. While this process used to be a nightmare in the desktop software days where users had to use floppy disks, CDs or large downloads to reinstall the software, it's an absolute breeze on the iPhone and usually takes less than a minute from start to finish. And there's no restarting the iPhone or choosing installation options. It's just a one-click process plus the input of your iTunes password if you weren't already logged in.

So why is this process a benefit? Because each time a new release is available a little icon shows on top of the App Store icon (see screenshot 1 below). Users then press the App Store icon, choose update, and they see a list of applications with updates available (screenshot 2). At that point users choose to update them all or look at them individually.

We believe most users are interested enough in their financial apps to take a look at the update, at least until the novelty of the mobile app wears off some years in the future. This provides financial institutions a free marketing opportunity to not only explain the new features of the app, but also deliver other marketing messages. You are much more likely to make an impression with your customers during the update process, compared to sending out a random marketing email.

In the three bank examples below, only USAA (screenshot 3) uses the opportunity to further cement its relationship with mobile customers, touting its new remote deposit capabilities along with several other enhancements. Wells Fargo (screenshot 4) takes a matter-of-fact, "we're fixing bugs" approach that is OK, but still misses the chance to communicate with users. But Chase (screenshot 5) completely annoys users with two sentences of marketing speak that says nothing about the update. 

Lessons for financial & mobile marketers: Whenever you release an update for your mobile app (note 2), take the opportunity to communicate with your customers as follows:

• Clearly explain the benefits of the changes to the app
• Highlight one or two related benefits of the app
• Mention any related news or promotions
• Strike a good balance between disseminating technical info and marketing new benefits

Screenshots

1. Main iPhone screen shows                        2. The Updates page shows the 4 apps
    that 4 app updates are                                       that have new versions available.
    available (right side halfway down).

3. USAA's latest update explains the specific changes made and provides several new benefits to using the app.

4 & 5. On the other hand, the Wells Fargo and Chase update messages are sparse. The Wells Fargo update appears to be a minor bug fix, so we'll cut them some slack for the terse message. However, Chase, with a minor update (2.0.1 update) to its major 2.0 release (released Aug 25), says absolutely nothing in 24 words of marketing-speak: 

We're listening -- You asked for a fully native iPhone banking application. This Chase iPhone app is built exclusively for iPhone and iPod touch users.

Seriously Chase, this is the best you could come up for the tens of thousands, if not hundreds of thousands, of iPhone users waiting for your updated app? At least the bank gets points for brevity.

                   Screenshot 4                                                             Screenshot 5

Note:
1. For more info on the importance of a native iPhone app see Online Banking Report: Mobile Banking via iPhone.
2. The same advice holds true for communicating online banking improvements as well, although the communication methods are different (email, newsletter, statement insert, blog, interstitials, log-off messages, etc.).

A few weeks ago, we noted a milestone at Apple's iPhone App Store, 1000 apps available in the finance category (U.S. store). I was been curious how that compared to Google's Android Market so today I did a quick comparison.

The Android market now has a respectable 211 apps in the finance category. However, few financial institutions have staked a claim. Only, Bank of America and Alliant Credit Union, had branded apps (see note 1, 2).

In comparison, the iTunes App Store has 11 U.S. banking apps and 3 from U.S. credit unions. That's up from 6 banks and no credit unions when we published our most recent report on the subject (see note 3).  See the the following table for details. Did I miss any? Let me know in comments or email jim@netbanker.com

Source: Online Banking Report tally, 24 Aug 2009

1. In addition, Qualcomm's Firethorn unit has an app that works with several dozen banks and card issuers including Citi, Chase, Wachovia, SunTrust and USAA. It's ranked tenth in the Android Market and 15th in the iPhone App Store. Also, in the Android Market, Visa has a beta app that works with Chase cards ranked #77. However, according to commenters, that test is ending in September.
2. There are another 15-20 international banks listed in the iPhone App Store.
3. Our Online Banking Report on iPhone Mobile Banking was published March 11, 2009.

The New York Times ran a positive piece on USAA's mobile efforts today, leading with the bank's innovative mobile remote check deposit service. A feature the bank announced in June and is rolling out this week.

USAA is the first major financial institution to use the iPhone's camera to allow customers to upload paper checks for automatic deposit. However, it was beaten to market by tiny WV United FCU, which launched a cruder version two weeks ago (previous post).

The San Antonio-based bank with 7.2 million customers, now has one million mobile users, a 14% penetration rate, up from 11% in May. It's the second U.S. financial institution (after Bank of America with more than 3 million; see note 1) to officially hit the million mark, though Chase/WaMu and Wells/Wachovia are believed to have passed that milestone last year.

Financial institution lesson: Mobile banking, and the iPhone specifically, still make a great story for the press (and customers). If you're first in your market with an iPhone app, or some other mobile milestone, let the media know.

Live demo of USAA's Deposit@Home iPhone app
Starts at 1-minute mark

Note:
1. 43% of BofA's mobile customers access via iPhone or iPod Touch. The bank does not yet support text-banking, so it's user base is skewed towards smartphone users.
2. For more info, see our Online Banking Report on iPhone Mobile Banking. 

Today marked an Apple App Store milestone of sorts, the 1000th application available in the Finance category (USA store). Finance is less than 2% of the total store, which now stands at 63,300, according to AppShopper.com. 

Lucky number 1000 was Easy Mortgage (iTunes link), a $0.99 mortgage calculator from Italian developer Nexus (screenshot below).

Four other new Finance apps debuted today, just missing the 1000 mark: 

• #997 MLM: A multi-level marketing guide from PTAJ Marketing for $2.99
• #998 Renting: A guide to renting a house or apartment from also from PJAT Marketing for $2.99
• #999 Forex: A guide to foreign exchange trading again from PJAT Marketing
• #1001 TaxTax: A $1.99 sales tax calculator from Canbuffi Web Development

Bottom line: These thousand apps are just the tip of the iceberg for the Finance category. It will likely grow to well over 10,000 during the next few years as most major banks and credit unions add their own apps to the mix. 

Currently, there are fewer than 50 financial institutions with their own dedicated app, including eight of the top 15 (most popular based on recent download volume): 1st (Bank of America), 2nd (Chase), 3rd (Wells Fargo), 4th (PayPal), 8th (E*Trade), 12th (Citibank), 13th (USAA) and 14th (multiple banks via Firethorn).    

For more info on the features and benefits of a good financial institution iPhone app, see our recent Online Banking Report: Mobile Banking via iPhone (March 2009). 

In what will surely be the first in a long string of similar headlines, the top of  yesterday's Wall Street Journal Money & Investing section declared:

BofA Plans to Cut 10% of Branches

The article, which has been picked up by nearly 100 news sites in the past 24 hours, reported that Bank of America was planning on reducing the size of its 6,000-branch network. There were no details on timing or whether the bank was retreating from certain markets or was simply pruning overlapping branches broadly.

But in later interviews with bank execs, it sounded like Bank of America was merely predicting a gradual shrinkage in its branch network over the next three years, and had no firm plans for specific closures. Here's a followup quote from president Liam McGee as reported by Charlotte NPR station WFAE:

"I think <CEO Lewis> was asked a question, 'Boy, could there be x-percentage less branches in the next few years?' And he was just saying, 'Yeah, could be, and if there was it would be in magnitude of this as opposed to a much higher number.'"

McGee says the bank is going through a 3-year evaluation process that could result in fewer branches, but that no particular number is targeted. He says customers' changing habits are driving the process.

What I found more interesting in the debate were some of the numbers the bank tossed out showing the growth of it's non-branch delivery:

• Nearly 50% of deposits are made in ATMs...up amazingly from 33% six months ago. The bank didn't say whether this was NUMBER of deposits or VALUE of deposits, but it's likely the former. Also, it's unclear if remote deposits made via scanner are included in the total. That new technology is making a significant dent in branch-based deposits at many financial institutions.
• 2.8 million customers are now using the mobile channel which was introduced in mid-2007. That's an average of about 120,000 new customer per month. However, growth appears to have accelerated slightly this year. In early Feb, the bank said it had 2 million mobile banking customers; so in the past 5.5 month, growth has been just under 150,000 new users per month.   
• The bank has a 60% market share in online bill payment; an amazing penetration for a bank with 12% of the country's deposits. 

Note:
1. See our Online Banking Report: The Demise of the Branch (April 2006), for more on the long-term trends in the mix of branch and alternative delivery.

A few weeks ago, I was lucky enough to tour the British Museum's exhibit on the history of money. And one thing that remains the same throughout the millennia, a concern about the security and authenticity of the various objects used to convey wealth.

It's no surprise that security is the number-one online banking concern of today's consumer. Had there been market research three thousand years ago, I'm sure security would have been at the top of the list of fears of the Chinese rich enough to hold a cache of cowrie shells (inset).  

So, until we figure out a way to eradicate crime, financial institutions need to address security concerns head-on and provide tools for consumers to take more control (note 1).

That's what I love about Addison Avenue FCU's launch of VeriSign's Identity Protection (VIP) security tokens. Addison Avenue members now have the tools to make their online banking extremely secure, should they desire to. And with set-up charges of $30 to $48 (waived for mobile) and an annual fee of $10 (waived the first year), the program is relatively self-funding (screenshots below).

As an added bonus, the "VIP Access" theme, even though it's powered by a security vendor, provides a nice boost to member relations. It also gives the CU an iPhone (link to app) and Blackberry presence it wouldn't otherwise have. 

Addison Avenue e2: The VeriSign program is one leg of a three-part effort dubbed E2, that the credit union launched today (press release; see third and fourth screenshots below).

The three core features:

• VIP security: as outlined above (link)
• E-deposit: remote check deposit via basic in-home scanner (link)
• Mobile banking: mobile web-based (link)

Addison Avenue security key landing page (link, 21 July 2009)
A short informational video brings the service to life.

VIP token options shown on VeriSign's website

Addison's three-part "e2" effort is highlighted on its homepage

E2 landing page (from homepage)

Notes:
1. Granted, most customers are not willing to spend the extra effort to bulletproof their accounts.  So extreme security measures such as this should be optional and carry a nominal extra fee. 
2. For more info on addressing security concerns, see our Online Banking Report on Security Marketing (published in 2005) and our more recent Online Banking Report on New Security Techniques published nine months ago.

In June, we reported on USAA's upcoming iPhone app that will support remote check deposits. But it looks like they were beaten to market by tiny WV United FCU headquartered in Charleston, WV. Haven't heard of WV United? They have just six employees, $11 million in assets, and 3,000 members.

But somehow they were able to pull off something that no other financial institution has yet to accomplish, accepting paper check deposits via a native iPhone application (iTunes link, see note 1 and 2). The application was added to the iPhone App Store on July 4, and the CU wasted no time in heralding the innovation with a homepage banner (see screenshot below).

The application could not be simpler. Users take a picture by pressing the button on the left (see inset), verifying that the image is readable, then uploading with the button on the right. WV United uses the member's mobile phone number to apply it to the correct account. The latest iPhone OS 3.0 is required.

The credit union also accepts deposits via in-home scanners using secure file transfers powered by LeapFile (co-branded site here).

It appears both services simply send images to the credit union where an employee manually converts them to ACH items. According to the E-Deposit customer agreement, the first 10 items each month are free; a $1 fee per item for the remainder of the month is charged. This allows for collection of a bit of fee revenue from small business members, while enabling most consumers to use it free of charge.

Certainly, fraud possibilities exist. But the CU's normal deposit-processing controls should mitigate most of the risk (see E-Deposit funds availability policy here). 

Mitek Systems introduced a mobile remote-deposit system last year (post here), but it's not yet in production at any financial institutions. 

Analysis: Although not a feature that will see widespread usage, mobile check deposits will prove convenient for certain customers, especially mobile small businesses. More importantly, it helps differentiate between online and mobile services.

So, for raising the bar in mobile banking, we are awarding WV United with our first OBR Best of the Web award for 2009 (note 3). In the 12 years we've given the award, WV United is by far the smallest financial institution to win. 

WV United FCU homepage with iPhone banner (11 July 2009)

iPhone app landing page (link)

Notes:
1. Sometimes it's nice to be small. WV United has six employees total, according to NCUA data. Most large banks would have a project team larger than that just to do the feasibility study on mobile remote-deposit capture.
2. For more info on the importance of iPhone applications for financial services, see our recent full report: Online Banking Report: Mobile Banking via the iPhone.
3. OBR Best of the Web awards are given periodically to companies that pioneer new online and mobile banking features. It is not an endorsement of the company or product, just recognition for what we believe is an important development. WV United is the 74th recipient of the designation since we began awarding it in 1997.

TowerGroup has just released a new research note discussing the growing adoption of mobile banking in the United States. The research unit of MasterCard is predicting a five-fold increase in active users (note 1) between year-end 2009 and year-end 2013.

In comparison, we (note 2) are projecting a four-fold increase. But either way, it's a phenomenal growth curve reflecting a market that financial institutions must pay attention to.

Following are the numbers Tower released; more details are contained in the full report (purchase here). I also compared to those that we projected in our Jan 17 Online Banking Report.

Please note: TowerGroup forecasts active USERS; we forecast active HOUSEHOLDS. There are about 1.9 adults (18+) per household in the United States, but often, not all of the adults in the household are active banking users, so it's a bit hard to compare the two figures. But if you assume 1.2 to 1.4 mobile banking users per household (note 3), we are pretty close this year, but TowerGroup is a bit more bullish five years out.

Sources: Online Banking Report, Jan 2009; TowerGroup, May 2009

Notes:
1. Active mobile users have used the service within the past 90 days.
2. See our Online Banking Report: Mobile and Online Banking Forecast or the Online Banking Report: Banking on the iPhone for complete details.
3. We assume the number of mobile users per household will grow over time starting with 1.2 per household in 2009 to 1.4 per household in 2013.  

My credit card number was stolen again. It's the third or fourth time since the Internet came along. It's annoying, and a little disconcerting, but not a major problem, thanks to efficient card issuers who take the info, credit my account, and send me a new card. On a ten-point "hassle scale," where 10 is having your hard drive crash, it's only a 2 or 3.

And my previous stolen cards resulted in little financial loss to the issuer, other than the cost to process the chargeback and reissue the plastic. In those cases, either the issuer caught the fraud before anything was shipped, or the items purchased were digital (online subscriptions) and didn't result in any lost inventory.

But this time was different. Someone used my card number to buy a PS3 gaming console and three games at a Best Buy in the Bronx. Assuming Best Buy follows proper procedures, Wells Fargo will be out more than $600 just for the merchandise. All told, with the cost of the investigation and processing, it's probably an $800 to $900 loss to the bank and merchant.

Wells Fargo is generally very good about suspicious charges and usually calls us. I've had the card for almost two decades, and it's been othe primary card for both my wife and me for much of that time. WF knows our purchasing habits better than we do.

Yes, we get to NYC at least once a year, but our charges are usually travel- and tourist-related ones in Manhattan. And we probably visit Best Buy in Seattle a couple times a year (we have teenage boys), so the gaming system charge is understandable. But it's highly unlikely we'd buy a system while visiting NYC, and we've never visited the Bronx, so the authorization request likely triggered flags.

But unless there was inside theft, the bank's authorization system evidently decided the $10 in interchange was worth the risk. Bad call this time, but probably right 99%+ of the time; otherwise, they'd be out of the card business.

What's mobile have to do with it?
But if Wells Fargo had a real-time connection to me via mobile phone, they could have texted me for an OK (similar to the screenshot above, which is a text-based activity request to Wells Fargo). If it really had been I who stood at Best Buy's register, it would have taken a second to reply "yes," and the transaction would have gone through.

Of course, in this case, I would have said 'no, I'm in San Francisco right now.' Or even better, in the not-so-distant-future, if I'd allowed the bank to track me via GPS, they would have known, without even contacting me, that I was 3,000 miles away from that store. Either way, the bank saves nearly a grand from that single text message. Multiply that by the millions of fraud purchases every year and you have serious money, billions by most estimates.

So yes, mobile banking (really mobile payments) does have a robust and tangible business case from fraud reduction and customer service savings. The technology is in the hands of the users now, and most know how to use it. So, let's get moving.

Note: For more information see our Online Banking Report on iPhone Mobile Banking. 

Day two of the Mobile Commerce Summit ran just for the morning (see Day 1 highlights), but anyone who overslept missed the highlight of the conference: the much-too-short panel discussion on revenue opportunities that started at 8:15 AM and ended at 9:00 (note 1). 

Panel: Mobile revenue opportunities 

• Drew Sievers, founder & CEO, mFoundry
• Joe Salesky, chairman & chief strategy officer, ClairMail
• Cameron Franks, director, Mobile Commerce Americas, Sybase 365
• Jayatsu Bhattacharya, SVP business development, Mobile Money Ventures (Citigroup & SK Telecom joint venture)
• Mustafa Patni, former director of mobile banking, WaMu

Observations from the panel:

• POS payment services: NFC at point of sale
• Value-added services
• Fees for mobile banking services: transaction, monthly, or annual
• Premium accounts with a rich mobile feature set
• Stock/investment trading (Citi Hong Kong is able to charge a premium for mobile trading)
• Bill pay: expedited payments
• Person-to-person (P2P) payments
• Much of the revenues will be indirect, from deepening and improving customer relationship
• Remote deposit capture for businesses
• Merchant advertising: offers to customers as they shop
• Loyalty programs: driving customers to certain merchants with alerts, offers, and discounts
• Lots of cost-saving opportunities: self-service customer service, moving bill payments to on-us transactions, loyalty program management, security, fulfillment, marketing, call deflection

Panel: Smartphone impact on the customer experience 

Armin Ajami, VP retail Mobile channel, Wells Fargo

• Almost half of smartphone users use the mobile Web daily (source: ABI research, Feb. 2009)
• 18% of U.S. consumers have smartphones
• 263,000 apps now available for smartphones, predicted to grow to about 700,000 by 2013
• There are 27 different app stores today
• Mobile-optimized website <wf.com> launched in July 2007, text banking launched Oct. 2007, native iPhone app launched May 2009
• Funds transfer on mobile-optimized websites takes 2 minutes with 5 clicks, no zooming or scrolling vs. 10 minutes via iPhone mobile browser with 7 clicks, 5 zooms, 7 scrolls and 10 minutes

Alain DeSouza, sr. mgr., market development solutions marketing, Research in Motion

• Globally, 12% to 14% of mobile phones sold now are smartphones; in North America, it's now above 20% (22% to 26%)
• Blackberry app store officially launched April 1, 2009
• Not excited about putting NFC chips into handsets (adds cost); will do it when it makes business sense (last year it was a top-5 opportunity, this year more of a top-20)
• P2P transfer is not a killer app, but could be important for adoption
• Be careful not to waste bandwidth in your app development

Note:
1. Note to conference organizers: Never start a session at 8:15 AM after a Thursday night in Las Vegas.

About 100+ folks gathered in the brand new M Resort near Las Vegas for the third annual Mobile Commerce Summit by SourceMedia. Jeff Dennes from USAA and Jim Simpson from City Bank of Texas, both provided an extraordinary amount of metrics on their mobile rollouts (details below).

The biggest innovation of the day was iPhone-enabled remote check-deposit capture soon to be available from USAA (official launch June 25; see picture below). 

Session highlights
Jeff Dennes, executive director, mobile money & movement, USAA:

• 7.9 million logins so far this year vs. about 7 million in all of 2008
• Highest week to date, 476,000
• 4.8 million USAA members own mobile; 1.5 mil use it to access Internet
• 20% say mobile is primary channel
• 11.4% of members using USAA mobile
• Why so much usage: no branches, members trust USAA, extremely mobile military-oriented customer base, more technically capable than average
• Have SMS, Firethorn downloadable app, WAP <mobile.usaa.com>, native iPhone app
• Native iPhone app released 2 weeks ago: Went to number 1 in first week with 55,000 downloads; 45,000 logins in first week, 93,000 in second week
• iPhone app built in-house and has patents filed
• Will be launching first iPhone remote deposit-capture app on June 25 (see photo above); tune in to the bank's webcast at 7 PM Central time at <budurl.com/usaaannouncement>
• Current iPhone app has insurance functions: filing a claim, roadside assistance
• Personal financial management functions coming soon
• With mobile rollout, are seeing call volumes going down
• 35% of access to mobile site comes from iPhone, 35% from Blackberry
• Will be building app for Blackberry; others as demand warrants (e.g., Pre)

Jim Simpson, VP IT, City Bank of Texas

• Mobile banking is powered by ClairMail (use Jack Henry for core processing and online banking)
• Launched 17 Oct 2008 with balance, history, funds transfers, "call me," near-real-time alerts (not batch) including reward-checking status/summary (sent out 7 days before end of checking cycle telling users how they stand on meeting necessary activity levels
• Have microsite: www.citybankmobile.com
• Made a major cross-channel marketing effort at launch: TV, print, radio, in-branch, and so on; used it to differentiate themselves in competitive Lubbock market
• 10.2% online banking penetration
• 64% use weekly
• Average age is 32
• Average account balance on primary account is over $5,000
• More than 3,000 active users
• Limited use of mobile browser site, bnkngo.mobi; text-message banking is much more popular (also have gocitybank.mobi); get 5,000 balance requests via text messaging each week vs. 25 or 30 mobile Web logins
• Real-time alerts (vs. batch) is one of the key benefits that users like; they often can text message a confirmation of the transaction while still standing at the checkout counter; not always that fast, sometimes can be a few minutes later
• Coming: End-of-day, text-based account summary, "payit" loan payment via text (in response to text alert), iPhone/Blackberry apps
• How to make money? Adding ad-supported links within text messages; e.g., link back to the restaurant where the transaction originated

Ginger Schmeltzer, SVP, SunTrust

• Currently at 2.5% penetration of online banking users powered by Firethorn
• 33% access via iPhone; 33% via Blackberry
• Have an RFP out now to find vendor(s) to increase functionality
• See real benefits from using mobile channel to decrease fraud

Patrick Reetz, VP & director, online banking, M&I Bank

• Rolled out mobile in Oct 2008 powered by MShift
• Within 11 days, achieved one-year goal of 2% penetration of online banking users (longer term, their initial goal was 10% by YE 2010)
• Currently have 7% penetration

Ellen Johnson, SVP retail online services, Huntington Bank

• Have just under 25,000 users of mobile Web banking, launched in June 2008
• Number of users of text banking surpassed mobile Web in April, launched 6 months ago
• Mobile banking customers are 38% more profitable; text banking, 13% more profitable
• Call center contacts per active user dropped 3.4% in first 6 months
• Have a mobile microsite for marketing

Juli Anne Callis, president & CEO, National Institutes of Health Federal Credit Union (previously at Keypoint Credit Union)

• At Keypoint Credit Union, even usage between iPhone and Blackberry access
• Keypoint powered by mShift and will be using mShift at her new CU
• Launched on Facebook Nov 2007 (OBR Best of Web winner)
  

Amy Johnson, channel manager -- CEO Mobile, Wells Fargo

• Launched 2 years ago (April 2007), and Wells Fargo remains the only major U.S. bank offering full corporate mobile banking
• Mobile Web-based system
• No charge except certain text messages (and those fees may go away)
• No set-up process -- just log in at mobile site with existing online credentials
• Will not disclose usage, but are targeting top-tier customers: top 10%-15%
• Access: 30% iPhone, 50%+ BlackBerry -- no Android so far
• $2.5 billion in wire approvals via CEO Mobile in 2008

Kevin Morrisson, AVP card products, H&R Block

• Using text messages to defer calls to call center (currently receive 80 million annually), especially people checking to see if their refund has arrived.
• Program was piloted this year and is expected to roll out nationwide later this year. Found dramatic decline in voice calls from test group.
• Mobile program powered by Metavante/Monitise joint program. 

Rebecca Mann, director of strategic alliances, Western Union

• Using mobile to replace either the sending or receiving part of a money transfer
• Partnering with US Bank for international remittances

Lisa Stanton, CEO, Monitise America

• Can do more secure services within an app compared to mobile Web or SMS

Matt Krogstad, VP business development, M-Com

• Critical for banks to be point of registration and source of funds
• Should be able to register outside online banking -- via call center, ATM along with mobile phone
• In Australia, mobile money transfers was slower to take off, approx. 18 months after adoption of mobile banking

Clint Heyworth, attorney, consumer finance group, Chambliss, Bahner & Stophel

• One-to-one relationship with phone (e.g., you have it with you) makes it better for security compared to PC where others have access
• Not a lot of legal differences between delivering banking services via mobile vs. online
• Don't expect to see specific regulation regarding the mobile channel; will likely be the same regulations as for online banking

Tom Wills, senior analyst, Javelin Strategy & Research

• Security is single biggest factor inhibiting mass consumer uptake
• Only 500 pieces of malware have been identified so far in mobile vs. thousands of new ones every day online
• 47% of respondents are uncomfortable with mobile security (Mar 2008 data)
• Main concern is hackers, mentioned by 73% of those above
• Expects anti-virus software makers to build mobile versions

Rebecca Sausner, editor, Bank Technology News

• Total revenues for mobile banking vendors this year will be $26 million (source: Aite)

Sean Moshir, CEO, CellTrust (also mobile banking sub-committee co-chair of Mobile Marketing Association)

• 66% of consumers still not yet comfortable using mobile device for financial transactions (source: 2009 KPMG Global Consumer Survey)
• 7% said they would pay a nominal fee to access online banking services via mobile phones (source: 2009 KPMG Global Consumer Survey)

More than 10 months after the iPhone App Store launched, two U.S. credit unions have joined the application marketplace, which numbers more than 40,000 in the U.S. store alone.

The first was Texas Dow Employees Credit Union (TDECU), whose ATM and shared-branch locator, Culoc8, launched on April 29, according to the company's Twitter page (below, link).

The TDECU app (see inset) is unbranded and can be offered by other CUs to their members. 

Eaton Family Credit Union is offering CuLoc8 to members on its website (see below).

------------------------------------------------------------------------------------------------

Yesterday, Tech CU, became the first credit union with a full-featured branded native iPhone app (App Store link, see note 1). The app (see below) includes full online banking functionality and an ATM/shared branch finder (second screenshot). The credit union also added something we haven't seen yet, an iPhone optimized feed of its blog, Money Savvy (third screenshot). Nice touch.

Tech CU has offered a mobile website since Sept. 2007. 

Note:
1. America First Credit Union was the first CU with native iPhone support via its participation in Firethorn's shared mobile banking app which launched in Nov. 2008.

Twelve hours ago, Wells Fargo became the last of the "big four" banks to release a native iPhone app in the Apple App Store (see screenshot below; note 1). The bank, which has long been a pioneer online, let Bank of America reap much of the branding benefits of their association with iPhone banking for the past two years.

But we are glad to see Wells Fargo available and enjoyed checking our balance via iPhone for the first time. At just 0.1MB, the application was a quick download and compatible with my first-generation iPhone. There's no need to first visit the bank's website, as the app can be immediately used with your normal online banking username/password (see note 2).

While it won't win any design awards, it's simple to use with the typical online banking functions: balance inquiry, transaction listings, funds transfer, bill pay and GPS-enabled ATM/branch finder. Only the 12,000 Wells or Wachovia ATMs are listed in its database.

During the initial signon, the app encouraged users to create a short account nickname for easier reading on the small screen. And the bank also prompted me to sign up for text-message banking, something I hadn't used at Wells before. When I agreed to do so, a six-digit confirmation code was texted to my phone, which I entered back into the app. 

There is no mention of the new app on the Wells Fargo site.

Wells Fargo listing in Apple iTunes App Store (18 May 2009; link)

Notes:
1. Big four U.S. banks: Bank of America, Citibank, Chase/WaMu, Wells/Wachovia.
2. We'd previously registered our mobile number, which may have eased the activation hurdle.  

Last week, USAA released astounding figures on its mobile banking usage: The 10-month-old service is already used by 11.4% -- about 800,000 -- of its 7 million members, making USAA one of the largest mobile banking providers in the country (press release; see note 1).

The mobile platform has bagged more than 13 million logins in ten months, about 3% of its nearly 500 million annual customer contacts (note 2).

With the introduction of its own native iPhone app last week (note 3), USAA now supports the three primary methods for mobile access (see screenshot below):

• mobile website at <mobile.usaa.com>
• text-message banking (see inset above)
• downloadable app for iPhone (link to app in iTunes) and other phones (via Firethorn)

Only Bank of America, with 2.6 million mobile users, has publicly revealed a larger mobile base. That makes USAA number two among known user bases. However, it is highly likely that both Chase/WaMu and Wells Fargo/Wachovia have cracked the one-million-user mark and are second and third largest. 

USAA's mobile landing page (18 May 2009)

Notes:
1. On a side note, USAA posts its press releases in blog format which allows visitors to comment and/or subscribe via RSS.   
2. The 3% is approximated from data in the press release: 470 million customer contacts in 2008 and 13 million mobile logins since the service was launched in summer 2008.
3. Since last fall, USAA users could access their accounts via Firethorn's multi-bank iPhone app.

Yesterday, Intuit launched its first native app for the iPhone, Quicken Online Mobile. It's already risen to number four in the Finance category (note 1), and will likely hit number one given the number of Intuit fans using the iPhone. Currently, E*Trade's new Mobile Pro claims the top spot.

Intuit has incorporated some interesting features including this user-friendly "what's left until payday" feature. Users can access a graphical map of their future balance level (below) and get a warning (right) if the account looks like it will run out before the next payday.

Intuit also uses the GPS/location-based capabilities of the iPhone with a built-in ATM finder (click on inset for larger view). And finally, users are able to input transactions on the fly to get a real-time look at the impact to their budgets on the latest expenses.

The two-minute YouTube video (link) is worth watching to see how to position your iPhone PFM as a mobile financial assistant (speaker is Intuit product manager, Barron Ernst):

There are a number of personal finance apps available on the iPhone platform including Mint, Wesabe (announced Tuesday at FinovateStartup), MoneyTrackin, iBearSoft Software, and dozens more. 

Notes:
1. Quicken's mobile app is number four in the free apps section of the iTunes Finance apps section as of 8:30 AM Pacific time, 2 May 2009. It has 73 user reviews with an average 4-star rating (excellent). In comparison, Mint which launched its iPhone app in December has nearly 13,000 reviews.
2. According to VentureBeat, Quicken Online passed the 1-million user mark in mid-April.

Apple must be one of the more lucrative advertisers these days at the Wall Street Journal. Apple has bought the back page more times than I can count to show off the iPhone and more-importantly, the diversity of applications available (see inset, note 1).

Lately, Apple has run "theme" ads showing applications related to a single category. Last week (Thurs, 9 April), the back of the A section showed personal finance apps (see left column below). Yesterday, the apps all supported small business and ran on the back of Marketplace (B) section (see right column below).

The only app to make both lists: personal finance superstar, Mint, which even scored top billing in the personal finance page, occupying the upper-left corner, where it's blurb would likely score the highest readership. 

The Apple website also has themed app guides. The managing money page (see screenshot below) features again features Mint, which gets the biggest graphic, Bank of America, who's app was featured in dozens of Apple ads in 2008 and earlier this year, Bloomberg, Gas Cubby, iXpenseIt, Save Benjis, and Home Finder.

Bottom line: Financial institutions should think about how to add similar money management functionality to their mobile and online offers. As Aite's Ron Shevlin pointed out in a comment here last week (emphasis added):

.....(the FinovateStartup participants) you talk about are helping people manage their financial lives, while the banks are [still] focused on helping people manage their financial accounts.

Big difference.

Table: iPhone apps listed in recent WSJ ads (clockwise from upper left)

Apple's Money Management page on its Website (link, 16 Apr 2009)

Notes:
1. My apologies for the image quality, taken via iPhone naturally.
2. For more info, see our latest Online Banking Report: Mobile Banking via iPhone.

A few weeks ago there wasn't a single dedicated ATM finder in Apple's App Store, and now there are three, not counting the bank-branded versions (more on that below). MasterCard is the latest entrant with a cute app called ATM Hunter (see inset; iTunes link) launched six days ago.

The free app can lead you and your iPhone to any of more than one million ATMs worldwide. The app automatically senses your location and lists nearby machines. And it's integrated with Google maps so you can map the location with a single click.

Unlike other ATM finders, MasterCard's version has a helpful filter to zero in on the following ATM types:

• surcharge-free
• drive-thru
• wheelchair accessible
• 24-hour
• deposit sharing

It also has a "share" function (upper-right of second screenshot below) that allows you to text the ATM location to a friend or to yourself for later reference. 

Here's what's in the app:

                         Main page                                   List after "location" search

              Filtering by feature                                           ATM detail

The launch is supported with a webpage at MasterCard's Priceless.com (see screenshot below).

Bottom line: It's an excellent app that should prove popular; however, I wonder if MasterCard is encroaching a bit on its banking clients' turf. Location-based ATM/branch finders are one of the cornerstones of a retail bank's mobile application (note 1). If customers are already using MasterCard's app, they have less reason to go mobile with their own financial institution.

On the other hand, the vast majority of financial institutions that don't yet have their own mobile app can safely recommend MasterCard's app and keep customers from using a banking competitor's app. 

MasterCard's ATM Hunter landing page (link, 10 April 2009)

Notes:
1. For more info, see our Online Banking Report on Mobile Banking: iPhone Edition.
2. Apple is approaching 1 billion downloads since the App Store opened last July. The company is celebrating the coming milestone with a $15,000 gift to the person that downloads lucky 1 billion. It also has a huge ticker on its website (below) that counts to the big number in real time (here).

Billion-download counter at Apple's website (10 April 2009, 6 PM Pacific)

Apple's new iPhone operating system was announced last week. There are more than 100 new features that will make the phone even more valuable plus 1,000 new APIs to keep developers innovating like mad. The new OS will be available "this summer."

Most changes are relatively minor, but two are significant for online banking and personal finance apps:

• Push notifications: Apple currently offers this feature only on its built-in email and SMS application (see screenshot below). But with OS 3.0, application developers can push notifications to the iPhone without the app being launched. For banks, that means you can show users when a new transaction, message, or alert is available to view.
  
• In-app purchases: This is probably less important for financial institutions who generally don't charge transaction fees for mobile or online services. However, non-bank financial apps can now charge transaction fees for value-added services such as an expedited payment or a credit score. The transactions are processed via Apple so now customers needn't provide the app developer their credit card number.

Bottom line: We believe every financial institution large enough to offer online banking should support the iPhone platform. With OS 3.0, it's even more important to be in the App Store. For more information, see the latest Online Banking Report on Mobile 3.0 -- iPhone Edition (see announcement post).

iPhone home screen (30 March 2009) >>>
Here's my main iPhone screen showing push alerts (clockwise) for new text messages (11), new emails (196), voice mails (6), and application updates (2).

In a completely unscientific poll of 123 LinkedIn users I conducted about two hours ago, I found they overwhelmingly prefer the online channel over all others when accessing bank transaction data (see notes 1, 2, 3).

I was expecting mobile to be higher. But unless you have a new-generation smartphone and your financial institution supports mobile, it's unlikely to be your first choice. So given that mobile's only been widely available in the United States for about a year, a one-in-ten preference is a strong start. 

I also expected a bit more interest in the other choices: ATM, voice and social network, which only drew 3% of responses in total. Social networks went 0 for 123, showing that it's not yet viewed as a place to review financial data (note 4), at least among LinkedIn users. In a much differently worded poll of Facebook users a year ago, we found that 13% willing to view their bank balance within the social network.

Q. All else being equal, how would you prefer to access bank transaction data?

Source: Netbanker/Online Banking Report poll of 123 U.S. Linked:In users who self-selected to respond to poll while logged in to Linked:In; fielded between 1 and 2pm on 1 April 2009 using in-network polling tool.

Notes:
1. The question is strictly limited to 75 characters, I couldn't make it as precise as I would have liked. For instance, I would have like to add "assuming its secure" and "your personal" to "transaction data." It's possible some respondents were thinking more about global banking data than their own personal transactions. The poll also displayed "by Jim Bruene, Owner, Online Banking Report" in the lower-left, potentially biasing results.
2. LinkedIn users are given opportunities to respond to polls while logged in to the service. There is no financial benefit to taking the survey, but they do get to see results after taking it.
3. There were significant differences based on demographics, for instance women were almost twice as likely to select "mobile." And zero men, and 4% of women, chose voice call as the preferred method. But due to the small sample size, these demographic breakdowns don't hold much weight. There also appears to be some mathematical errors in the demographic splits, so I'm not going to cite them further until Linked:in cleans up it algorithms.
4. An interesting result, given the poll was conducted within a social network among social network users. Actually, "the branch" beat social networks, drawing one "write-in vote" in the poll comments (it was not one of the five choices). 
5. For more info on mobile banking see our latest Online Banking Report on Mobile Banking 2.0 -- iPhone Edition. 

While working my way through the RSS backlog tonight,
I found a post from Rob Findley at The Bank Channel, I wish I'd seen a week ago. It would have made a nice example in our latest Online Banking Report on the iPhone and other mobile applications. 

Last month, Dutch giant ING released a Google Android mobile application called ING Wegwijzer (see translated page below), that goes one step beyond the iPhone's GPS-enabled ATM finder apps.

In the ING (Netherlands) version, you have three choices of how to view the nearest ATMs (see below):

• List
• Map (regular or satellite)
• Camera

The camera option is very cutting edge. Users point the camera in their G1 mobile phone camera (inset) and the app overlays a pointer to the nearest ATM (see below). The application works for all ATMs, ING-owned and others, but only in The Netherlands. 

The application was developed for ING by SprxMobile using technology from Australia's Austria's Mobilizy.

I saw a Japanese startup demonstrate a broader mobile shopping app at TechCrunch50 last September, the Sekai camera from Tonchidot, but this is the first production app I've seen using the technology.

Bottom line: This is probably overkill in terms of a mobile ATM finder. However, it shows the power and versatility that's rapidly being engineered into mobile phones.   

ATM location as pointed out by ING app running in camera viewfinder

ATM locations also displayed via typical mapping

ING landing page for the Wegwijzer (link) (Google translation, 18 March 2009)

This is a report I've been meaning to write for a few months, but it kept getting pushed back for more pressing (Growing Deposits in the Digital Age) or timely (Year-end Wrap and Forecast) reports.

But a few days ago, we put the finishing touches on the latest Online Banking Report. It will be mailed to subscribers by the end of this week. It's also available online here. There's no charge for current subscribers; others may access it immediately for US$495.

--------------------------------------------------------

Mobile Banking 2.0: iPhone Edition
How to build a smartphone app even
your CFO will love

In the report (press release), we outline the reasons why every financial institution should consider an iPhone app, even if it's just a simple surcharge-free-ATM/branch finder like 1st Mariner Bank (iTunes link; see note 1) or a one-screen interface to your mobile website, essentially what Bank of America started with last year. Being on the iPhone is like having a website in 1995. Just by being there, even if it's crappy, you are ahead of the curve. And for the rest of time, you can brag that you were an early adopter of all things mobile.

And the icing on the cake, you get to slap Apple iPhone pictures all over your website. Baltimore, MD-based 1st Mariner, a bank that doesn't appear to even support basic mobile banking (note 2) has the most iPhone-ish website in the land (see screenshots below).

The report also looks at:

• Mobile banking application market (Apple's App Store, RIM's Blackberry App World, and Google's Android Market)
• Mobile banking forecast (U.S.)
• 33 features to consider for your mobile banking app
• Leveraging iPhone hype to increase interest in financial products and services
• Legal issues in mobile banking from our guest columnists at Chambliss, Bahner & Stophel
  

1st Mariner Bank homepage (16 March 2009)
Note: Nice job with the St. Patty's day theme too!

1st Mariner iPhone landing page (16 March 2009)

Notes:
1. The 1st Mariner app, built by PointAbout, identifies the nearest of 16,000 surcharge-free MoneyPass ATMs. It also features other integrated apps for local weather, lowest gasoline prices, accident alerts, traffic (powered by MapQuest), grocery stores, and Zagat restaurant listings (but not reviews or ratings).
2. Ironically, if you navigate to the bank's website on your iPhone, you cannot even see its iPhone homepage graphic (shown above) because the graphic is Flash-based which is not supported by the iPhone's Safari browser

Financial institutions vary considerably in how easy they make it to move money in and out of bank accounts.

On the one extreme is U.S. Bank, which still requires a retail customers to visit a branch to initiate an electronic payment (note 1). Plus, if you come in after the wire transfer deadline, 2 PM I believe, you can set it up to go out the next day, but you still have to call back and reconfirm before 2 PM the following day. When asked why they needed a phone call after I've already appeared in person, shown my ID, and signed multiple documents authorizing the transfer, they responded in all seriousness, "to make sure you are still alive."

Then there's University of Wisconsin Credit Union, who not only assumes its members are alive, but also wants to keep them satisfied.

The credit union's novel Money Link service allows anyone to send money to a UW CU member via an email-enabled system similar to PayPal but free of any fees and branded by the CU. The service can also be accessed via UW CU's mobile banking. 

Transfers from outsiders take 3-4 days for the ACH items to clear. But member-to-member transfers occur in real time. It's a great way for students to get money from mom and dad in time to thwart that Monday morning overdraft.

The CU also supports full inter-institutional account-to-account transfers online. There is no cost to move money into UW CU, but there is a $2 fee for outgoing transfers.

Members who can't wait for the 3 to 4 days for an ACH to clear, can elect the the Express Service that offers one-day turnaround for $10. The Express service has a $2,000 limit where the Standard Service can be used up to $10,000 (see inset).

Bottom line: This is the type of transfer service most consumers expect from their bank or credit union. It's amazing that it's still not supported at many financial institutions, including some of the majors.

Note:
1. Referring to wire transfers here initiated in the Seattle area. There could be other procedures in other areas of the bank's footprint. Also, customers can CheckFree-powered online bill pay to pay any U.S. resident or business within 5 days. 

It will be a long time before the new mobile application markets, Google's Android Market and RIM's Blackberry App World, get anywhere close to Apple's App Store in breadth or depth. Currently, there are 162 apps listed across all categories in the Android market and 88 for the Blackberry (North America), compared to more than 25,000 for the iPhone (U.S.).

However, Blackberry already has tied the iPhone in one sub-category, big-name U.S. financial services companies. As of today, each has four. Bank of America is the only one supporting both.    

*Blackberry App World also has an Obopay mobile payments app with ties to Citibank.

Financial institution opportunities: The list of participating financial institutions won't stay short for long. You must support iPhone and Blackberry users, the sooner you do so, the more free publicity you can garner. For more information, see our latest Online Banking Report, published today, Mobile Banking 2.0: iPhone Edition.

Blackberry App World Finance & Banking section
(9 March 2009, 10 PM Pacific)

It will take years before the mobile phone fulfills its promise as a true mobile payments device. Or will it?

If you don't mind a bit of a work-around and you limit your purchases to MasterCard PayPass-enabled merchants, you can pay by cell phone today thanks to Blaze Mobile.

How it works:

1. Download the Blaze Mobile Wallet at the Apple App Store (iTunes link), cost $1.99 (note 2).
2. Sign up for a Blaze pre-paid MasterCard issued by MetaBank
3. Affix the MasterCard PayPass RFID sticker to the back of your iPhone
4. Wave and pay at MasterCard PayPass terminals

Granted, few people will go through this trouble just to buy an Arby's sandwich without pulling out their plastic (note 1). However, it shows that the technology is available today to enable at least some mobile payments. And for financial institutions, it provides a cool way to differentiate debit and credit cards.

Notes:
1. According to MasterCard, there are 463 PayPass locations within 25 miles of my Seattle location. 
2. The wallet also works on other mobile platforms, see the company's website.
3. Previous post on paying via credit card stickers (here).
4. For more info see our Online Banking Report on Mobile Payments.

Earlier today, Citibank launched a dedicated iPhone app (iTunes link) powered by mFoundry. Previously, certain Citi cardholders could use the Firethorn iPhone app, but there was no App Store listing under the Citi brand.

The app, which is free to download, is currently number 10 in the App Store Finance (free) category. It will likely rise to the top, at least briefly, as Citi customers download the app.

The app is featured on the Citi homepage today (see first screenshot below) and is front and center on the Citi Mobile landing page (second screenshot below). The bank has also posted a nine-screen demo of the app here (see inset).

Anyone that's ever used a mobile website will appreciate the Citi login screen (see inset below). A jumbo-sized numerical keypad is included below the signin area to make typing the PIN easier on the small screen.

The Citi application does the usual four functions:

• check balances
• transfer funds
• pay bills
• find Citi branches and ATMs

The bank wisely informs users that their iPhone access can be deactivated immediately in the event of a lost or stolen phone by calling its toll-free number.

With this launch, four of the 10 largest U.S. consumer banks have a dedicated presence in the Apple App Store: Bank of America, Chase, and PNC Bank.

Citibank homepage features the iPhone app (2 March 2009)

Left: Landing page for Citi Mobile (link, 2 March 2009)

The Citibank application page in the iTunes App Store (link, 2 March 2009)

Note:
1. See our Online Banking Report on Mobile Banking for more information on the market. 

You'd think that seven months after Apple launched the App Store for the iPhone, it would no longer be news when a U.S. bank adds an application to the store.

It's not like a cost-prohibitive slotting fee is involved. Developers pay Apple exactly zero dollars to be listed in the store (note 1). Apple's revenue is from the 30% share of any fees charged for an app. All the bank apps are free, so that's not an issue.

But it is news since the addition of PNC Bank two weeks age (app here) brings the grand total of bank-specific apps to four, five if you count PayPal. Even if you include the several dozen banks supported by Firethorn's multi-bank app, there are still no more than 40 banks supported (note 2). And there's not a single credit union, yet. 

Here are the five App Store participants in order of their appearance:

• Bank of America and PayPal were both in the App Store when it first opened in July 2008 (post here)
• IBC Bank (powered by mFoundry) launched in Sept. 2008 (post here)
• Chase Bank launched Dec. 2008 (post here)
• PNC Bank (powered by mFoundry) launched late January 2009

Wells Fargo has an iPhone app, but it's not yet shown up in the official App Store.

PNC mobile banking app
PNC's entry is a full-featured app powered by mFoundry. Along with balance and transaction activity, it includes bill pay, funds transfer, and an ATM finder with location-based capabilities. Users must enable mobile banking from within online banking in order to use the app.

The app has risen from number 17 in the Finance category a week ago to 13 today (note 3). However, the app has not yet made it to the PNC website (note 4).

PNC iPhone App screenshots (11 Feb 2009)

Notes:
1. The app does need to be approved by Apple, a process that can take weeks or longer.
2. Users can also track thousands of financial institutions through Mint or PageOnce.
3. Bank of America is #1, Chase is #4, PayPal is #5, Mint is #6, Firethorn is #9.
4. A PNC.com site search for "iphone" yielded just one result, an iphone listed in a mobile banking compatibility table. (Off topic: Note to PNC Bank, your site search doesn't function in Firefox 3.0).
5. For more information on the market, see our Online Banking Report on Mobile Banking and the latest forecast in last month's Online Banking Report Online & Mobile Forecast.

MoBank, the U.K.-based mobile banking and payments said to be launching this month, is creating some buzz on the other side of the Atlantic (stories here, here, and here).  Given the pedigree of its two founders, Steve Townsend and Dominic Keen, who blazed many online banking trails at Egg and First Direct, it should provide a glimpse of the future of mobile finance.

The company is establishing a call center on the Isle of Man, run by Steph Gregg, a veteran of Egg, First Direct and Vodafone. Melanie Hunter is head of marketing, and David Rubin is head of mcommerce.

The company was named to Red Herring's top-100 global start-up list last month (here) along with FinovateStartup alum ClairMail (demo video here).

It appears at launch the service will support bill payment and certain mcommerce activities, such as purchasing movie tickets. An iPhone app is expected at launch. Users will register their credit/debit card(s) with the service. The company plans to expand into mobile banking and money-management activities in the future. 

The company has raised more than $1 million according to news reports. The company was founded in 2006 and presented at The Essential Web conference in June 2007
(p. 43, here) and had four employees at that time.

Here's how the company described itself 18 months ago:

MoBank is creating the world's first mobile-led online bank. The company believes that, for some sections of the population, small screen devices will become the channel of choice for most banking and payment services. moBank's business model is based on providing a free-to-use basic banking service with paid-for add-on features. Furthermore, moBank's users are enabled to participate in a range of unique, value-generating m-retail activities.

What's innovative: It sounds like a mobile-based account aggregation and bill-pay service, similar to Mint on the iPhone. But it could also contract directly with one or more banks like SmartyPig has (previous coverage). But as ING Direct proved, optimizing on a new delivery channel can pay off with great word of mouth and positive press.

MoBank pre-launch homepage (6 Feb. 2009)

Note: For more info on the growing market, see our Online Banking Report on Mobile Banking.

Bank of America has been making the rounds with the press touting the runaway success of its mobile banking solutions. Major stories ran in American Banker and The Wall Street Journal this week.

The bank, with 29 million online banking users, reports numbers just shy of the 2-million mark in mobile. That's up from one million early this summer (post here). While it's still less than 10% of online banking customers, it's an impressive number considering fewer than 4 million mobile banking households exist in the entire country (see note 1).

Several other interesting stats from BofA:

• More than 40% of active mobile bankers --  someone who's logged in within the past 90 days --  use an iPhone or iPod touch. That's about double the usage you'd expect given Apple's 23% share of the U.S. installed smart phone base (note 2, 3).
• The bank believes the mobile channel is driving some new business to the bank with 8% to 10% of mobile bankers, almost 200,000, having signed up for the service within 90 days of opening a BofA account (note 4).

Source: ChangeWave Research, survey of 3,800 cell phone users fielded Dec. 9 - 15, 2008 (link)

Notes:
1. See our latest Online Banking Report: Online & Mobile Forecast for more details.
2. The 23% figure does not include iPod Touch.
3. One other bank provided its usage numbers to the WSJ: Mississippi's BankPlus reported 4,000 users with 60% of the usage (2,400) coming from iPhone users.
4. That number doesn't seem all that surprising. You'd expect new customers would be somewhat more likely to sign up for new delivery channels than the existing base. And given typical banking churn, 10% to 20% of a bank's customer base are new every year.

The latest Online Banking Report: 2009 to 2018 Online & Mobile Banking Forecast is now available. It was mailed yesterday to subscribers. It's also available online here. There's no charge for current subscribers; others may access it immediately for US$495.

The report includes our latest 10-year online banking and bill pay forecast. This year we again bumped our long-term usage forecast to 6%, up from 3%, to reflect a more robust outlook for adoption, primarily from mobile-only users. For example, we are now projecting 71 million U.S. households banking and/or paying bills online by 2013 compared to last year's forecast predicting 66 million for the same period.

Mobile banking (see note 1) access is included in the overall online banking numbers, but it's also shown as a separate line item. Based on the new open-platform standards ushered in by the iPhone and App Store, we increased both our short- and long-term adoption forecast by 10% to 20%. For example, by year-end 2011 we now predict there will be 18 million U.S. mobile banking households. A year ago we forecasted 16 million.

We also included a revised forecast for U.S. peer-to-peer lending. We cut back our short-term estimates by more than 50% due to regulatory and economic constraints on the business. A full 10-year forecast is included in the report.

Top ten innovations & trends of 2008
The report also includes a summary of the top ten innovations of the past year including the surge in mobile banking demand and the marked increase in traffic to personal finance speciality sites such as Mint and SmartyPig.  

Note:
1. A mobile banking household is one where someone has used a mobile device to access bank or credit card account info within the past six months. Includes text-based queries, but not simple broadcast alerts.

When researching yesterday's post on BofA's iPhone app, I searched Google for "Bank of America mobile banking" and ended up at the bank's mobile banking news blog (see screenshot below).

This is the second blog the bank has launched in recent months. The first supports its MIT Center for Future Banking (post here).   

While purists may claim this latest effort is not really a blog because there are no community features such as comments, it's updated infrequently (5 posts in 3 months, see note 1) and appears purely promotional in nature. The bank doesn't even refer to it as a blog. The official title is: Mobile Banking Media Center for Bank of America.

But it's laid out like a blog. The content is arranged in reverse chronological postings, with categories/tagging/permalinks. The variety of content includes YouTube videos, and you can subscribe via RSS feeds.

That's a blog to me, and a very good one at that. While the core audience consists of press and analysts, it's a great resource for anyone interested in the bank's mobile offerings. And as my search yesterday proved, Google has rewarded it with a high organic result, the first position on my search. That can potentially save the bank hundreds of thousands of dollars in search-engine advertising.

Bottom line: Call it what you will, but BofA demonstrates one of the most effective uses of the blog-like format: supporting PR and educational efforts for a new strategic effort (mobile banking) in an easy-to-follow and easy-to-administer format (see note 2).

Notes:
1. There are five posts on the homepage, but if you drill into the top categories, you'll find some older press releases.

2. For more ideas, see our Online Banking Report on Bank 2.0 Techniques. 

3. BofA's new Blackberry app is shown at the top of this post.

Bank of America, which has been at or near the top of the Finance category (free apps) in the iPhone App Store since its July 11 launch, was back at the top today (12:45 PM Pacific). Mint, which has been number one since its Dec. 22 launch, moved to number two.

Contributing to the rise in the App Store standing is BofA's purchase of a feature spot in the iTunes store (see screenshot below). The release of a new version Dec. 28, is also helping the download count. 

The BofA application now leverages the location-based capabilities of the iPhone, automatically showing nearby ATMs without inputting a Zip code (see video below, posted in the BofA mobile media center here).

iTunes App Store main page (20 Jan. 2009)

Note: For more info on the market, see our Online Banking Report on Mobile Banking.

No one knows for sure how Apple compiles the list of its top-selling iPhone apps, but it's related to how many are sold during the past few hours. I've seen speculation that the measurement period is 2 hours (see note 1).

But there is no doubt about the benefits of rising to the top. The winner receives prime exposure in the iTunes Store and on the iPhone itself (see screenshots below).

I've checked the Finance category rankings dozens of times since the store opened in July, and the top app had always been Bloomberg with Bank of America usually the runnerup.

But Friday, a new top seller emerged in the Free list in the Finance category (note 2), Chase Mobile  while Bloomberg and BofA were each knocked down a spot to numbers 2 and 3. The Chase app was released just one week ago (12 Dec). But by Saturday morning (20 Dec), Chase had already been replaced at the top by online personal finance startup Mint, which released its iPhone app Monday (15 Dec), but it didn't show up in the iTunes store until 1 AM Friday.  Mint stayed at the top all weekend and is still number one now (10 AM Pacific, 22 Dec).

In the screenshot below and right, you can see the free publicity derived from holding the top spot. Also, note that you should put your name into the application. Bank of America, ranked number 3, neglected to include its name in the title, so it loses some branding value. Although, they would have to use BofA to fit into the space.  

Chase App (link to iphone App)
The Chase app itself is attractive and is similar to Bank of America's with a login button to the website and an ATM/branch-finder utility. As of this evening, 64 reviews have been posted with an average 3.5-star rating out of five, slightly better than the 3-star rating of Bank of America's iPhone app with similar features.

Mint App (link to iPhone app)
As expected from a company that is carefully using design to help distinguish it from the pack, Mint's new app is great looking. Across all aggregated accounts, the mobile app shows account balances, transactions, and progress towards budget goals. A nifty alerts icon on the bottom provides a convenient way for users to keep tabs on important info on the go.

Another difference from most banking apps: Mint lets users choose whether they want password protection enabled after their initial login. If you choose to log out, then the app erases all data in memory, and you must log back in next time. If you choose not to log out, then your data remains visible until the next visit with no login required (note 4). This is a great convenience, but something that may not be allowed at regulated financial institutions.

Some users have reported trouble with the app on older phones. On my first-generation iPhone running version 2.1 software, the Mint app wouldn't download. But once I upgraded the iPhone software to version 2.2, it downloaded flawlessly and all functions worked perfectly. In Mint's forum, some users were reporting problems with the Budget feature, but it seems to work fine for me (forum thread) (note 3).

Top Apps in the finance category of iTunes' App Store
(7 PM Pacific, 19 Dec 2008) 

 Top free finance apps list displayed on iPhone:
          at 7 PM Pacific, Fri. Dec. 19                               at  2 PM Pacific, Sat. Dec. 20         

Chase Mobile iPhone app                    Mint iPhone app main screen
main screen (19 Dec 2009)                          (19 Dec 2009)

Notes:
1. That 2-hour window could be about right. When I made this screenshot, the new Mint app was at number 10; two hours later (9 PM) it had risen to number 5 (see screenshot above). By 9 AM Saturday morning (20 Dec) it had risen to number 1.

2. The App Store divides the top apps into two categories, free and paid. The top 20 free apps are listed on the right side and the top 20 paid apps are listed on the left. The apps in the middle are listed by newest first.

3. These operating system incompatibilities, a real problem in pre-1995 online banking services, had largely been left behind when banks embraced the Web in the mid-1990s. Unfortunately, mobile banking will add to your tech-support costs. 

4. Mint also reminds users that they can choose to lock their entire iPhone for extra security.

5. For more info on the market, see our Online Banking Report on Mobile Banking. 

Like much of the Internet, many free iPhone apps have embedded advertising as their revenue model. The most popular tip calculator, and third-most-popular app in the finance category, CheckPlease, added advertising across the top of its calculator in its version 3.3 release (Nov. 12).

The current sponsor? Bank of America mobile banking, which has the second-most-popular finance app in the iPhone App Store. The advertising is handled by Mobclix, an advertising network focused on the iPhone and Android markets that debuted at TechCrunch50 in September. In a half-dozen visits, I've seen only the BofA ad. But the developer, Hardy Macia, says he's seen several movies advertised on the app. 

Clicking on the BofA ad (first screenshot) takes users to the BofA landing page (second screenshot on right) hosted within the App Store environment, i.e., the pages are not displayed within the normal Safari environment. The only navigation options are:

• Learn more (see 3rd screenshot)
• Download (see 4th screenshot)
• Visit bofa.mobi
• Close (the X in the lower-right) which takes you back to the CheckPlease app

CheckPlease is a product of Catamount Software which has developed mobile personal finance software since 1994, when it launched PocketMoney for the Apple Newton. PocketMoney is now available for the Palm and iPhone. The company just added an ad-free version of CheckPlease for $0.99.

The free CheckPlease iPhone app has been downloaded more than 200,000 times according to its developer and owner of Catamount Software, Hardy Macia.

      CheckPlease iPhone App                       BofA landing page

          Learn More page                                 Download page (note 1)

Note:
1. Surprisingly, the buttons on this page are not clickable. To download the BofA app, iPhone users must close this screen and open the App Store button on the home screen(s) of their iPhone.

I've communicated with Privier founder Charles Polanco a number of times over the years. He's a Wachovia alum who's been working on a financial startup for several years. The company launched a suite of payment services on Oct. 16 that aims to get the plastic card out of the ATM business (press release).

Privier's value prop is straightforward and compelling: Enable money transfers from any device at any time with the cash delivered through the worldwide ATM network.

The system initiates transfers in three ways:

• ATMsend: ATM to ATM
• iTransfer: Web to ATM 
• mPayment: Mobile phone to ATM

In Privier's model the ATM card is replaced by a one-time authorization code that recipients key into the ATM to withdraw transferred funds.

Analysis
From a usability perspective, it's a great idea. After all, what's not to like? Consumers need to send cash. ATMs have cash. Why not let folks authorize a remote ATM withdrawal from the comfort of their own home or office. A proposed fee in the $7 range beats most alternatives for long-distance money transfers.

However, from a practical standpoint there are two massive roadblocks to overcome:

• Retrofitting ATMs to accept a keyed-in code instead of a mag stripe for authentication
• Convincing banks to add ATM-transfer capabilities to Web, mobile and telephone services

It will likely take an organization the size of Visa, MasterCard, or Bank of America to pull this off. To ensure that those behemoths work with it, Privier has a portfolio of patents pending on the business process. 

What it means for Netbankers
It may take decades, but eventually, the Web married to mobile will eliminate the plastic debit/credit card; however, unless you are a major bank or payments company, this isn't likely anything you need worry about for a number of years.

A better short-term solution for smaller financial institutions is to enable P2P funds transfers using PayPal so you can send money to anyone with a PayPal account (see note 1).

Privier's Web-based interface for sending cash to an ATM (5 Nov 2008)

Note:
1. See our latest, the Online Banking Report 2009 Planning Guide, for more info on project priorities for this year and beyond. 

I check the Finance applications in the Apple iTunes store at least once per week to see which of the companies we track has posted an app. But I missed one of the most popular finance apps, because it's categorized under Productivity.

An iPhone application called A Personal Assistant (iTunes link) from PageOnce has been downloaded more than 200,000 times according to the publisher. The application is an account aggregation service that automatically downloads balance and transaction activity from financial, billing, and other service providers.

In an interview on FastCompany TV (here), co-founder Guy Goldstein said that 65% of users are checking financial accounts through its account aggregation app. Assuming 100,000 total active users, that would imply more than 60,000 iPhone users tracking financial accounts via the PageOnce app (see inset).

That would likely make PageOnce the third largest provider of banking info to the iPhone, trailing only BofA and Firethorn (see note 1).

During the FastCompany interview, Goldstein identified one focus to be banking and bill pay transactions, and said that plans are in place to add bill pay functionality to the app.

Palo Alto-based PageOnce opened to the public in July. The company also offers a Web-based version of the account aggregation service (screenshot below), but sees its core audience being smartphone users. The company launched a Blackberry version a few days ago (see homepage below, company post here).

Implication for Netbankers
Because mobile website navigation is relatively more difficult, the allure of having all your personal and financial info in one place is stronger for smartphone users than for website users. 

However, users are still very concerned about handing their passwords to an unknown startup such as PageOnce. But convenience-minded consumers will do it if there are no viable alternatives from trusted brands such as banks, credit unions and card issuers. If you work at a financial institution, and you still have development dollars available, move the iPhone app up your priority list.

Or partner with someone that already has an app and get your brand on that precious screen. PageOnce is actively looking for partners and has already announced three, none in the financial sector.

PageOnce homepage (5 Nov. 2008)

Notes:
1. Firethorn added a mobile banking app two weeks ago (post here) that has risen to fourth most popular, behind Bloomberg, Bank of America, and Check Please, a tip calculator (see previous coverage here).

2. For more info on the mobile area, see our Online Banking Report on Mobile Banking.

Verizon Wireless mobile phone users can now download PNC Bank mobile banking directly from the Verizon Wireless site (here). The free service, powered by mFoundry, is housed in the Features & Downloads area (see first screenshot below).

However, unlike Firethorn's mobile banking app which carries a "recommended" endorsement from the wireless carrier (see second screenshot), the PNC Bank app is found only via site search (see last screenshot). The PNC app is currently not available via browsing the business apps.

Users may click on the Send to Phone button, a shortcut that sends an application directly to their mobile phone for easy downloading. Both mobile banking applications are free.

PNC Mobile Banking app on Verizon Wireless site (3 Nov 2008)

Search results for "banking" at Verizon's Tools & Applications area
(3 Nov 2008)

Firethorn's mobile banking app is recommended at the Verizon site
(3 Nov 2008)

Note:
1. For more information on the market, see our Online Banking Report on Mobile Banking.

Firethorn (owned by Qualcomm) has a new iPhone app called Mobile Banking for AT&T Customers. The app is currently ranked number eight in the finance category of the Apple iTunes App Store (see screenshot below). Of the transactional services, only PayPal and BofA's Mobile Banking are higher.

The application can be used to access online banking at any of the ten financial institution holding companies, and their subsidiaries, currently supported by Firethorn:

• 1st Bank (Colorado)
• America First Credit Union
• Arvest
• BancorpSouth
• Caroline First
• Mercantile Bank
• Suntrust
• Synovus
• USAA
• Wachovia (now owned by Wells Fargo)

The Firethorn application has 27 reviews so far and has scored a 4-star average (out of 5), much better than the typical finance app (see previous coverage here). The main complaint is lack of coverage for the user's bank, which is not the fault of the app.  In comparison, Bank of America's app garnered 434 reviews and a 2.5-star rating.

I downloaded the application today and, unfortunately, I don't have an account at any of the financial institutions; however, that will change next week if they hit the dates contained in the Featured Providers page.

Here are coming-soon financial institutions:

• Citi Cards (Citibank) "coming Nov. 1" (previous press release here)
• Chase Bank "coming soon"
• Regions Bank "beginning this fall"

A few hours ago, I talked to a friend who'd just purchased the T-Mobile G1 phone this morning in Atlanta. He was pleased with it so far and said he was impressed to see Bank of America available on day one through Google's Android Market.

Apparently, BofA was the only app in the Finance section this morning (see inset). However, that will change rapidly as the store opens to other developers next week. Thanks to Alan Martin for the screenshots.

The bank's Android app looks like the other mobile versions. It includes online banking access and an ATM/branch locator that uses built-in, location-based services (see pictures below).

I also read several blog reports of successful downloads  of the BofA app. However, when visiting the Android market website, the BofA app is not shown amongst the 40-some programs currently available. Apparently, the public market website is different than the app market accessible through the phone. I guess I'll have to hit the T-Mobile store tomorrow to see for myself.

Congratulations to BofA for again beating its U.S. competitors in mobile deployment. It now has a three-peat in recent smartphone application launches:

• First iPhone application in Apple directory (non-native) in Nov. 2007
• First bank with iPhone native app via app store in July
• First bank with Google android app in app market

For more info on the market, see our Online Banking Report on Mobile Banking.

The last of our mobile demos is from Carlo Cardilli, SVP business development & sales, at mFoundry. 

mFoundry is a mobile banking provider founded in 2004. The San Francisco-based company has worked with Citibank among others.

What's New
mFoundry just launched the second native banking app, available through the Apple App Store. The demo showed a fictitious bank, but the bank that launched the app with mFoundry is IBC.

The iPhone app has full online banking and payments capabilities. It also has an ATM/branch finder that uses the location-based or GPS capabilities in the iPhone.

Next we have Awele Ndili, CEO of mShift.

Founded in 1999, mShift is one of the oldest mobile banking providers and now supports 120 clients.

Today, mShift is showing its new mobile business banking solution with full payment capabilities.

Active Messaging System was also demo'd. It's a new multi-channel alert system that enables alerts to text, voice, email or fax.

Eventually the distinction between mobile and online banking will disappear as the devices and services converge (see note 1). But until then, mobile banking, because it's perceived as cutting edge, is more interesting to many customers. That's why Bank of America, Chase, Citi and many others have featured mobile banking in on- and off-line media (see previous coverage here).

But it's not just a mega-bank game; any financial institution can play up its mobile capabilities. Texas-based IBC Bank, in the top-100 with $11 billion in assets and more than 200 branches, flaunts its mobile capabilities with a large banner on its homepage (see screenshot below). The mobile banner currently rotates with an identity-theft-protection pitch.

IBC Bank homepage featuring mobile banking (2 Oct 2008)

IBC Bank releases iPhone app
Last week, IBC became just the second U.S. Bank to release a native iPhone app in the Apple iTunes App Store. The mFoundry-powered application was the 36th most popular finance app yesterday, out of about 120. Following is a screenshot of the application's entry in the App Store. Bank of America, which launched its app on the first day of the App Store, is the other App Store participant (see previous coverage here).

mFoundry will demo its latest innovations at our Finovate Conference Oct. 14. Video of its previous demo is here.

Note:
1. For more info, see our Online Banking Report on Mobile Banking.

I'm certain most major PFM providers will have an iPhone app within the next six to 12 months. It's a valuable product extension from a functionality standpoint (see note 1). Even more important are the marketing benefits from blogger/press coverage and the App Store listing itself. 

Mint posted a blog entry last week reviewing ten iPhone finance apps. The post drew two dozen comments, most asking when a Mint app would be released for the iPhone. Mint Product VP Aaron Forth replied, "We are busy working on one now."

Most of the better-funded PFM companies are likely working on an iPhone app, but the approval process at Apple can easily take a month or more (one developer's story is chronicled here). So we expect to see them trickle out over the coming months.

The first established online PFM to make it into the iPhone App Store is Moneytrakin', the Barcelona, Spain-based