By Travis K. Kircher
Jim Block closely watches emerging mobile trends. As the Director of Global Technology for North Canton, Ohio-based Diebold Inc., Block said Diebold began exploring mobile banking seven years ago, when cell phone manufacturers first developed text messaging, an avenue Diebold executives say holds a future for banking. Diebold has obtained several mobile banking patents over the past two years, one of which addresses the possibility for the consumer to "call-ahead" ATM deposits or withdrawals.
For Block, the call-ahead feature is the most intriguing and the one Diebold expects to garner the most interest, initially.
"You would contact your bank with your cell phone - and that could be from anywhere you happen to be - and initiate a transaction via the cellphone," he said.
The user would tell the bank she plans to withdraw $200 from the ATM down the street. From there, the bank would initiate the transaction, so the system would be ready to spit out the cash as soon as the user arrives at the ATM.
Using a patented authentication process that verifies the mobile device from which the user calls and later initiates her transaction at the ATM - the mobile device actually communicates with the ATM - Diebold's tech eliminates the need for a card and cuts transaction time by several seconds.
In theory, Block said, a one-time password would be sent by the bank to the mobile device, which would then have to be entered into the ATM by the user. Another authentication method would make use of the mobile device's camera, which could verify that the correct user is at the correct ATM.
"You would take a picture [of a label or barcode attached to the ATM] and the fact that your camera transmitted that data to some authentication service in the bank would prove that you were at the physical location that you were supposed to be at to receive the transaction that you previously had ordered," Block said.
Why would consumers flock to such an application? Block said Diebold is banking on their insatiable thirst for speed and convenience. Although they would still have to stop at an ATM to make the deposit or receive the actual cash, he said the wait time will be shorter.
"Some locations, perhaps in the branch and perhaps on the sidewalk, could create 'express ATMs,' where the line is for people who are just there to pick up their previously ordered transactions," Block said.
The added layer of security also is an attraction.
"The combination of the inherent privacy of the cell phone, coupled with the example where a one-time password could be used to access the ATM, helps protect against threats like skimming and PIN spying," Block said.
But how likely is that type of mobile use to take off in the United States? Not very, at least not in the near future, according to a September 2007 report published by Forrester Research Inc.
In Raining on the Mobile Banking Parade, Catherine Graeber, a Forrester Analyst who covers e-business, channel and product management, said despite the fact that mobile-device ownership is growing exponentially in North America, consumer adoption of mobile banking applications is surprisingly limited.
"Just 3% of online Canadians and 4% of online U.S. consumers report that they already use a mobile device to access their financial accounts," Graeber wrote.
"And the outlook for future adoption is bleak: Only 7% of online Canadians are interested in accessing their financial accounts through a mobile device. In the U.S., interest is even more lackluster - just 5% of online consumers are interested."
Gregory Hanson, Vice President and General Manager of E-Commerce Solutions for Dayton, Ohio-based NCR Corp., agreed that the public has been slow to accept mobile banking.
"A lot of people today, quite honestly, who have phones with that capacity don't really understand that they have it," Hanson said. "So you'll see adoptions grow, I think, fairly slowly."
That written, NCR isn't waiting for consumer adoption to catch up with the tech. Like Diebold, NCR also announced plans in August to enter the mobile market through a deal with MShift, a provider of customizable wireless solutions.
NCR is now offering the MShift Mobile Banking Solution as part of its suite of Internet banking services, giving financial institutions the ability to provide their customers access to online banking services via mobile devices.
That kind of move could have a big impact, said Richard Crone, founder of Crone Consulting LLC. Crone is closely watching the mobile-payments space, and contrary to what Forrester reports, said consumers do want more mobile-banking options - it's merely that their financial institutions (FIs) don't offer any mobile options.
During a presentation earlier this month at Source Media's ATM, Debit & Prepaid Forum, Crone reported findings that reveal 50% of U.S. consumers would use mobile-banking channels, if their FIs offered it.
He added that Celent LLC reported 30% of U.S. consumers who bank online will be mobile-banking within three years. Allowing consumers to access their bank's online channel from their mobile devices is the first step, he said.
"We have three screens we should be concerned with," Crone said. "The Internet screen, the smart-phone screen and the 'little' (mobile) screen.
"Most businesses haven't done much with this, and most banks haven't done anything."
For NCR, integrating the mobile channel into the overall banking experience will allow banks and credit unions to potentially tap new customers and members, offer more tailored banking services and open up unforeseen doors of possibility.
"We started doing wireless cell-phone banking back in 1998," Hanson said.
"We had several thousands of people doing banking on mobile devices back then, but the problem was that you had all these small screen sizes, limited.
"Back then, cell phones had only two-line screens, making it difficult for banks to create a user-friendly interface," Hanson said.
Today, with the advent of smart phones, that's not so much an issue. "The carriers are now going to 3G and even 4G networks," he said.
"We see the bandwidth and we see the introduction of PDAs and your Windows-based computers that are also conducive to cellular-phone calling, in addition to all of the mobility tasks that you do on a normal PC. We think that the time is certainly right."
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