She has been on your TV set for about a year now. If you grew up in the 1970s, the girl in the commercial might remind you a bit of “That Girl.” You know — the one with the girl with the new job and the Citi Mobile account and the really cool, seamless banking life.
The play on the old show is really quite smart. It makes it seem like mobile banking is something that has been around for a long time and something that people obviously do. It makes it seem very comfortable. It is a perfect marketing strategy after the disappointing first efforts at mobile banking of the late 1990s.
Most industry watchers will agree that the early wave of mobile banking applications largely fizzled due to limited uptake. “While we heard a lot about mobile banking in the early part of the decade not a lot really happened,” said Charul Vyas, Emerging Technologies Analyst at TowerGroup. “There were many shut downs due to limited use. But now there are real usage numbers. In 2007, there were 1 million mobile users of banking applications.”
Vyas’ research examines the impact new technologies have on the financial services industry as well as adjacent markets, including retail merchants and digital commerce.
Here and now
Now that mobile banking has arrived, it is perfectly logical to make people feel comfortable with it. If a 20-something in her first job like the girl in the Citi Mobile commercial relies on mobile banking, why shouldn’t everyone?
“Uptake is now strong and more banks are more aggressively advertising and informing customers,” commented Vyas. “The main drivers are a combination of young users who grew up on wireless and the fact that network latency has improved, yielding an increased comfort with mobile data services. It is a combination of the maturing market and the youth user that are driving growth. It is definitely a step in the right direction, there is a more general comfort with accessing financial information on the handset.”
In an industry that loves to declare and proclaim technology evolution benchmarks, 2008 has been dubbed by many to be the year of mobile banking. The pieces are definitely in place.
In the case of the Citi Mobile application, it can be quickly downloaded onto a Citibank customer’s cell phone. “Citi Mobile represents the next generation of technology that delivers a new level of service to our clients,” said Charles Prince, chairman and CEO, Citigroup Inc.
The company said Citi Mobile offers convenient, on-the-go banking services with advanced mobile technology compatible with more than 100 mobile devices across major U.S. wireless carriers. The application runs on mFoundry’s mobile financial platform. According to mFoundry, the Citi Mobile launch in 2007 was the first nationwide wireless banking solution for the consumer market.
Strong start
mFoundry’s Co-founder and CEO Drew Sievers said adoption of the Citi application was strong right out of the gate. “We hit our annual goal for Citi within about six weeks of launch.”
Sievers said the most popular features are balance inquiry, transfers and bill payment. “Mobile banking phase one includes account balance inquiry, account history, transfer, find ATMs and contact customer service,” he said.
Drivers
What is driving cellphone users to use their phones for banking? According to financial research and advisory firm Celent, the same factors that drove 40% of households to online banking: ease of use, control and convenience.
In a recent report, Celent said that 2008 would be a “build” year for mobile banking services with most banks launching some form of mobile banking service in 2008. The research firm expects the more aggressive banks to expand mobile banking services beyond basic functionalities (e.g., balance inquiries) to more advanced functionalities (e.g., bill pay or intrabank transfers).
Celent said the uptake of mobile banking services in 2008 will be near 10% of online banking households.