MOBILE IS IN MOTION

Credit Union Management, Jun 2008 by Bankston, Karen

It's a good time to take a second look at wireless access.

Well-informed people know it is impossible to transmit the voice over wires and that were it possible to do so, the thing would be of no practical value. (Boston Post, 1865)

The problem with television is that the people must sit and keep their eyes glued on a screen: The average American family hasn't time for it. (The New York Times, 1939)

There is no reason for any individual to have a computer in his home. (Ken Olson of Digital Equipment, 1977)

As these quotes compiled by the Web site sysprog.net demonstrate, innovation often inspires naysayers-until it catches on. Mobile banking, or account access via Web-enabled cell phones and other handheld devices, may be the latest technological advance to disarm skeptics, as wireless network capability, hardware availability and consumer comfort levels finally begin to converge.

It's not that there's no reason for skepticism. Many credit unions among the early adopters of wireless access abandoned the delivery channel or saw interest dwindle because the technology didn't live up to expectations. These days, however, some of those CUs may be looking to reintroduce the service, and those that hung on are seeing more interest and new options for functionality.

For example, America First Credit Union, Ogden, Utah, introduced a WAP (wireless application protocol) version of mobile banking in 2001. It was a big hit at first and even brought in new members. "But after a while with the technology what it was, it slowed down considerably-just too slow and cumbersome," says Rich Syme, senior vice president for the $4.3 billion credit union with 456,000 members.

A few members of America First CU (www. america first.com) still use its mobile banking option, but the credit union expects a surge of interest as it unveils a new, faster application from Firethorn Mobile (www. firethornmobile.com). A major marketing launch was planned for May.

To sign on, members will need to go to the home banking site to register their phone and phone number; download a small application, or "applet," to the phone; enter a code to activate; and choose a PIN. The applet installs the menus on the phone, so only data specific to the member's account is transferred back and forth. That makes for quicker transactions, Syme notes.

Quicker access and an already-equipped membership-a recent survey by America First CU indicates that 80 to 90 percent of its members have cell phones and 13 to 15 percent already have data plans-should translate to greater acceptance and a steady increase in demand for mobile banking access.

Members will be able to do many of the same transactions they currently do on line-check account balances, transfer funds, review histories and pay bills through CheckFree (www.checkfree.com), which is integrated through Firethorn.

Syme says he's especially impressed with the security of the new system, which incorporates several authentication measures: something you are (in the form of challenge questions), something you know (a PIN) and something you have (the phone).

"If you register your phone and then try to use someone else's, you won't be able to get into the system," he notes. "And if you lose your phone, you can just go in and shut down access or register a new phone via home banking."

America First CU will be watching the launch closely to see how members with other cell phone providers than AT&T and Verizon, which have certified the Firethorn system, fare with the new application. "It might be a bit more cumbersome for them to download," Syme says. "But we have tested a number of those devices and we just added Blackberries, which is a big deal for us."

MARKET POTENTIAL

The market potential for mobile banking is clear. According to Plunkett Research (www.plunkettresearch. more than 900 million cell phones-or should we say "multipurpose personal communication devices"-will be sold worldwide in 2008, many of them Internet capable. About 13 percent of all American households today have abandoned land lines in favor of cell phones, and 9 million people are wielding Blackberries.

Respondents to a December 2007 survey by the Pew Internet Project (www.pewinternet.org) said they would find it harder to give up their cell phone than to live without the Internet, TV or a land line phone.

Such numbers, along with high-profile rollouts of mobile access by big banks, are attracting the attention of CUs that want to be able to respond affirmatively when members start asking, "Can we do that, too?"

"The capabilities of the cell phone have increased so significantly that it makes the user experience of passing data back and forth more appealing," suggests Kenton Potterton, executive director of CUES Supplier member PSCU Financial Services (www.pscufs.com), Tampa, Fla. "The browser interfaces and WAP are much more secure today, and the penetration of mobile phones in the population makes for a large potential audience."

CUs have three main options for providing mobile access to members, Potterton explains. The first, known as SMS, involves text messaging; members submit a code signaling an account balance query and the balance is returned. The same technology can be used to send alerts at members' request when their balance reaches a certain level or when they receive a direct deposit, for example. Gen Yers comfortable with text messaging are the demographic most likely to embrace this system.