NetBanker 2.0

Apple's iPhone to provide even more reasons to bank on the go

Yesterday, I wrote about how new downloadable search apps were likely to spur mobile banking adoption as users grew more accustomed to using their phones for more than voice calls (see post here).

Today, a potentially bigger driver was unveiled. The much-anticipated Apple iPhone which was such big news that the company's homepage was given over to a single image of the iPhone (see screenshot right).

Given Apple's recent track record, the combo iPod/phone/camera/browser may do even more to spur adoption of mobile services than the Google/Yahoo/Microsoft offerings (see note 1). 

Why? Because its user interface appears to do an excellent job of exposing the non-phone functions. While the same can be said of Blackberrys and Treos, this phone, co-marketed by Apple and Cingular, is expected to be a mass-market hit along the lines of the iPod (see note 2). As one blogger put it, "Apple didn't unveil a phone today, they unveiled a $500 fashion accessory" (see note 3).

While the built-in Safari browser and magnification function will spur mobile browsing and banking via standard and WAP websites, there is no indication if and when the iPhone will support True Mobile Banking via downloadable third-party applications. The demo phone on the Apple website <apple.com/iphone> does include a stock tracking widget (see inset).

However, given Cingular's involvement in mobile finance, with pilots underway with MasterCard, BancorpSouth/Firethorn/ CheckFree (see our coverage here), we expect that banks will have the opportunity, likely at significant cost, to add a widget to the phone (see our Wells Fargo iPhone mockup at right; see note 4).

Bonus prediction: Within two years one of those buttons on the iPhone will activate contactless card payments via MasterCard, Visa, or American Express.

Notes:

1. Apple's iPhone will ship with integrated Google and Yahoo search.
2. Apple is forecasting 10 million unit sales in 2008, but at least one analyst has already called that low according to today's Wall Street Journal. Worldwide iPod sales are expected to be 40 million units in 2006. However, no one expect the iPhone market share to get anywhere close to the iPod's 80%. Competition is far more advanced and intense in phones than it was in MP3 players.
3. I can't recall where I read this, still looking for the attribution.
4. We added the Wells Fargo logo to the iPhone image; the bank has no known relationship with Apple or Cingular.

BancorpSouth mobile banking trial

While doing a little end-of-year cleaning, I came across these screenshots from November. They are from Google's cache of BancorpSouth's <bancorpsouth.com> website on Oct. 22, 2006. The pages are no longer available online.

They detail the bank's efforts to recruit 400 volunteers to test mobile banking from their Cingular cellphones. This is the program engineered by Firethorn Mobile (see previous post here.)

The first page below explains the trial, and the second page is the application required to participate. To be eligible, customers had to meet the following requirements:

• Be BancorpSouth online banking customers
• Be current Cingular Wireless customers
• Use a Motorola V-series or SLVR phone
• Have Internet access from this wireless phone

Participants who completed all three surveys doing the 4- to 6-week trial were to receive a $100 Visa gift card.

See the screenshots below for more details (click to enlarge).

Main BancorpSouth explanation of the mobile banking trial (click to enlarge)

Application to participate (click to enlarge)

Has mobile banking finally arrived?

During 11 years of publishing Online Banking Report, we've written about 500 words on so-called "mobile banking."

Even though it was a much-hyped topic in the late 1990s, our answer when asked about mobile banking was, "Fix your Web-based banking, add email alerts, and mobile will take care of itself."

But it looks like times may be a-changing. Cingular is throwing its considerable muscle into a phone-centered service using Firethorn's <firethornmobile.com> new platform (see homepage right), and the U.S. market for wireless services is enormous (per MasterCard & Cingular during their Nov. 16 presentation at BAI's Retail Delivery Conference):

• 2 billion mobile phone users worldwide, including 218 million in United States (per Cingular)
• Nearly 80% of U.S households own one (per Forrester)
• $660 billion of revenue for voice, messaging, and data services
• 75 million U.S. mobile phone users sent a text message in September (per M:Metrics, 20 Nov. 2006)

Even more interesting, ClairMail shared market research showing that nearly two-thirds of U.S. consumers aged 18 to 34 have used text messaging during the past three months, demonstrating that even in the laggard U.S. market, a core group of consumers is ready, willing, and able to use the phone for more than just voice calling.

Analysis
There are three main reasons why mobile banking's time has arrived:

1. It works on common phones: Previous generations only worked on a subset of high-end PDAs; now most mobile phones can handle mobile banking.

2. It has a business case: Mobile banking can both increase fee income by being a core component of a Premium Online Banking service (see Online Banking Report #109) AND lower costs by migrating voice calls away from the IVR and into self-service.

3. The youth movement: Younger consumers interact with each other in real time via text and instant messaging. There is little doubt that they will value the same type of interaction with their bank.

We'll be looking at this subject in much more detail when we publish our first exhaustive report on the subject in January (see Online Banking Report in late January or early February).