Surf’s Up: Mobile Banking and Marketplace Timing

Should credit unions plunge into the world of mobile banking now, or should the industry wait until the technology has a proven track record?


This is an update of an original article which was published on 7/9/2007

Should credit unions plunge into the world of mobile banking now, or should we wait until the technology has a proven track record?

The growing wave of interest in mobile banking over the last year stems from a recognition that the cell phones, which increasingly resemble full-fledged computers, offer a gateway to new convenience in financial services. The iPhone has now sold millions of units since its debut last year and is perhaps the best example to date of a “converged” mobile device. These millions of users have already experienced how the added convenience of mobile internet access can fit within their daily professional and personal lives. Mobile personal finance is highly relevant to this medium.  We know from research studies that internet home banking ranks among the top considered web destinations for consumers. This desire to access account information and conduct financial transactions will follow in the mobile device for all the same reasons.

If there is one thing to learn from internet banking which should be applicable to this situation, it could be that “timing is everything.” For this reason, credit unions should be looking at the financial institutions that have rolled out mobile banking platforms and asking “Why are they all so focused on this now?” Mobile payment technology, including person-to-person (P2P) and near-field-communications (NFC), clearly seem to offer the best potential ROI given new promised revenue streams. However, while the potential is enormous, it may still take several years before the widespread use of mobile payments via cell phones aid in point of sale transactions in a significant way.

It is unlikely the big banks, who all rushed to release their own mobile banking platforms last year, know what the mobile payments landscape will look like in another two or three years time. Usage data is being analyzed and trials are still being conducted. However, most recognize that 1) cell phones will almost certainly play an important role in future banking, and 2) a mobile platform with an already significant user audience will help position the financial institutions to be ready for future mobile payment services and other capabilities as they are conceived and deployed.  

This is similar to more traditional web strategy; having a platform and audience in place makes it a lot easier to deploy an extension of that platform in the future. This was the credit union experience with first generation home banking and subsequent extensions: bill pay, loan processing, e-Statements, A2A, and more.  This is not to say it is impossible to launch a stand alone mobile service later in the future when all the pieces are in place, but it will likely be more difficult than it will be for other institutions already entrenched in the mobile banking market.

The future of mobile banking will allow for an immediate way to validate a transaction, avoid a fee, or move money with minimal effort at the point of sale. Like it or not, it is coming. If you can believe that this device is how information will be accessed and transactions processed in the future, then it seems reasonable to suggest that the time is now for credit unions to begin engaging and learning with our interested members.  In other words: First, build up the platform. Second, acquire experience along with members about mobile banking. Third, extend services into new mobile banking areas as they are available.

At the very minimum there are first mover learning opportunities that can be gained from hitting the ground running now.  At best, we have an opportunity to completely redefine member value with technology once again, though the ultimate form of convenience. Just imagine: anytime, anywhere access to my credit union and funds in the palm of my hand. 




July 9, 2007


  • I feel as though I am missing something with the mobile banking trend and recent increase in articles. I am confused as to why credit unions would invest in a separate mobile banking platform when, as you just mentioned, the iPhone (and others to soon follow) bring the web to a new level. I''ve played around with a friend''s iPhone and I went straight into my account via my credit union''s website online banking and paid my car payment. As these new phones bring the web up to par, I dont understand why the need to invest in separate platforms for mobile banking when these phones basically do the same thing for free. Am I missing
  • Exceptional article!!! Japan has been using the mobile web through DoCoMo for over the past year. In fact according to DoCoMo, more Japanese access the web from thier mobile devices than their home computers. Western Europe is far ahead of the U.S. and Canada with mobile banking. Its amazing the Americans, and Canadians have taken so long to catch on! The .mobi domain extension is long over due for the North American market. Thanks for an excellent job!!
    C Robinette
  • Good, thought provoking article. Mobile devices clearly enhance the Web channel’s capabilities for members to engage with information. Already getting great traction as an access point to the Web, mobile devices will only get more powerful and users of all generations will soon expect the flexibility they afford. I am also pretty sure that they will expect the services and customer care to provide a seamless and consistent experience as they move across all access points, which will only be realistically possible if governed by a broad strategic vision. Giving the members what they want is generally a good idea, but only when it makes good business sense.
    Chuck Van Court
  • Timely and straight on article. Your recent webinar on Mobile Banking was excellent. I highly recommend it to any credit union entertaining the foray into Mobile banking. Some stats shared: 42% of the attendees were not planning to offer mobile banking. I bet they are at the drawing board now, figuring out how to do it. Why? Look at these numbers. 73% of the American population have cell phones that percentage climbs to 90% for ages 18-24. 84% of cell phones in circulation today are internet capable. 110% of the population of England own cell phones. OK ... so if you are considering Mobile Banking - run, do not walk to your domain registrar and purchase your .mobi domain name now.
  • Scott, Great article! Yes, mobile is here, it''s the future, and we have to play to survive. As the technology is developing, albeit rapidly, there are significant indicators of how this will play out. You mention one of them, the sensationalized release of Apple''s iPhone. Sure, the iPhone is suffering first-release stumbles but the real significance of the iPhone is what it isn''t. Simply said, it''s not WAP. Its the real web, via the browser Safari. This is significant. Mobile-based financial interactions will be mediated through the "real web", not some subset of functionality. This is a key indicator, and one that merits attention. Whatever mobile banking will become, understand that the interface will be pure-web. I guess first principles are applicable here. Take the web seriously, as this is the channel you will be communicating with your members AND conducting transactional business. The device is secondary, but it sure appears from all industry indicators that mobile enabled devices (do we have to call them phones?) will certainly play big.
    Dave Mayette
  • Since most credit unions are using third-party vendors for their transaction software and online banking software, in regards to mobile banking, wouldnt the credit unions be at the mercy of their vendors? Data conversions are very expensive so switching to a vendor that implements such software first, would be most unlikely. I''m confused with the whole mobile banking experience as well.
  • I have spent some time with the iphone and am stilling feeling misserably let down with the experience! To best sum up my experience with "true web browsing": If you would take a sheet of paper and lay it on your desk in front of you flat. Now take a clear drinking glass and put it on the paper. Now look down through the glass, and all you can see of that page is what is through the glass; that is your iphone "screen". Yes you can eventually see the whole page, if you move the glass all over the paper, as Apple claims...but you have to keep scrolling up,down,left and right....and repeatedly the site refreshed itself in the phone, leaving me to start back up in the upermost lefthand corner to begin scrolling again to try to find where I was last at. Dismal experience....I think I am now also permenantly cross eyed. Touching on Comment #5.... Although only .mobi sites are guaranteed to work on your mobile device (no matter who the manufacturer is), its really not an alternate platform to work on, its simply a few extra pages written in XHTML (similar to HTML) and placed on the same server as your main website. The difference is your .Mobi domain name would only point to those XHTML pages. Its not as if your rebuilding your website. Nice article and great comments.
  • I agree with Chuck. At the heart of this discussion is the simple fact that most current web presentation and functionality is in serious need of optimization. This discussion proves that it just might be a good time to reassess current web strategies and functionalities. It''s appropriate to invest in this optimization as this ultimately better serves the membership. In todays world - and I literally mean today - specifically crafted mobile interfaces address current street reality. Tomorrow''s coming pretty darn fast. I''m not a betting man but I think the next release of the iPhone, and probably from this point forward, most other moblie devices will come even closer to pure web interaction, that is if you have really powerful eyeglasses!
    Dave Mayette
  • Existing Web pages designed for personal computer displays are generally ineffective on a small mobile display – including the iphone. To be effective and used, application access extended to mobile devices must be optimized for mobile devices (display, navigation, use of javascript and cookies, etc.) and messaging should really support SMS (text) messaging. Sure some isolated functionality might be passable through mobile devices, but you can be sure that for most services and support this approach will fall woefully short for the foreseeable future on the vast majority of support and services consumers will expect from their mobile devices.
    Chuck Van Court
  • No, you are correct. Read Comment #!. The future play will be pure web.
  • Your Mobilearth solution with an optimized view seems to take the mobile experience to the next level. I too, was very frustrated with trying to ready web pages on the iphone. It is not as easy to scroll around the page as the commercials make it seem. To be able to optimize a mobile banking view using the same URL means less cost for financial institutions and ease of use for the customers.
  • The Mobilearth solution allows an institution to offer the next level of multi channel web and mobile banking to their customers. Mobilearth detects the incoming connection characteristics and presents the appropriate customer view. PC web browsers, Blackberry''s, Trios, PDA''s, regular cellular phones all receive their own optimized view. The benefit to the customer is that they only have to remember one web URL address for their bank and it works not matter what they use to perform their web banking. Customers can view account details, history, transfer funds, pay bills and enable or disable transaction and account balance alerts. Mobilearth also has a text messaging solution to allow customers to access banking info or request the call center phone them by sending a text message and receiving a real time response from the bank. The text message solution also allows a Marketing Dept to create their own custom text message campaigns to inform their customers of new products, services, contests, ATM locations, etc. The solution is running in production and we are currently working with a credit union implement the solution. For more information please visit