Managing finances through your cellphone is the next big tech trend turning the corner in North America. Whether it’s a Web 2.0 biz called Geezeo or Bank of America going mobile, many services are changing the way we handle our money.
Digital Journal — Picture this scenario: Shopping at your favourite electronics store, a sudden impulse compels you to buy a new LCD TV. But do you have enough cash in your bank account to purchase that goodie using debit? And if you whip out your American Express, maybe it’d be smart to check your credit card balance before risking more debt.
Coming to the rescue is mobile banking, which allows cellphone users to find out their account balances by typing simple text messages or accessing Web apps on the phone. So in the electronics store, you can send an SMS message to a Web 2.0 service and within seconds you’ll receive a message back with the amount in your savings account, for instance. Or you can go online through your phone and access information on various accounts, making sure that LCD TV purchase doesn’t bruise the wallet more than it should.
Sounds futuristic? In fact, mobile banking has arrived and is expected to grow in popularity every year. By the end of 2007, 25 per cent of existing online banking customers will adopt mobile banking, according to research firm TowerGroup. The interest already exists: Compete found nearly 30 per cent of existing online-banking customers were keen to try out banking through cellphones.
The major banks are hopping on board this new trend. In March, Bank of America launched mobile banking for 21 million of its online customers, allowing them to check account balances, pay bills and transfer funds through their phones. Bank of America is opting for the wireless application protocol, or WAP, approach — it’s basically a poor man’s Web, favouring text-based pages over graphics-heavy pages.
Citibank, on the other hand, introduced Citi Mobile, which lets customers download software to their cellphones. Users can then access accounts by typing in a special access code, giving them the ability to see if cheques cleared or where the closest ATM can be found.
And the Washington Post reports, Charlotte, N.C.-based Wachovia will launch a third-party mobile banking application with AT&T, starting sometime in the fourth quarter. This new service will enable simple bill payments, which few other solutions provide.
Some mobile-banking companies, like Geezeo, let users check their account balances by sending a text message to a predetermined number. Another text message will inform users of the info they request.
Let’s say this all sounds appealing but you don’t want to pay high data charges when you access the Web on your phone. A Web 2.0 startup business called Geezeo wants to make mobile banking even simpler — its online financial interface allows users to access all bank accounts and credit card via text message. Available free to American customers, Geezeo works with any text-enabled cellphone without requiring any software.
“Overdraft fees are crippling people, but now you can get real-time info about your accounts,” Shawn Ward, co-founder of Massachusetts-based Geezeo, told Digital Journal. “Customers need to know what’s in their account when they shop.”
The startup, launched two weeks ago, has already partnered with 6,000 financial institutions to provide users with the most updated info on their accounts. The service aggregates account balances and available credit in one place, and will eventually roll out several other features. Geezeo co-founder Peter Glyman hints the company will introduce transaction categories (so you’ll know what was spent on gas each month, for example), money transfers (you’ll be able to move funds from one bank to another), and, if the market demands it, payments for everyday items.
“The credit card is a dated technology and will disappear like the VCR did,” predicts Ward, making a bold statement on how mobile banking can topple other forms of routine payment.
Geezeo is also stretching its brand past the mobile banking service. Its website will act as a social-networking community where users can share money management tips and anecdotes. “We want to build a product where people can come back to, where they can use something intuitive,” Ward says.
So far, mobile-banking’s main appeal falls squarely on seeing what money is where. A recent survey by comScore Networks found 84 per cent of respondents wanted to check their balance using a cellphone, while 55 per cent were interested in transferring money. Are balance inquiries the number one priority for a reason? Are we paranoid about seeing financial data on our phone?
The Geezeo founders say any secure information is hidden behind an encrypted connection, and the company goes one step further by filtering data from system log files. And Big Bank services like Citi Mobile use 128-bit data encryption, the same kind used for Internet banking security. And if a phone is lost suddenly, Citibank says it can close mobile access within minutes.
All this security protection and innovative technology under the hood means mobile banking will likely win more attention in the next few months. Ultimately, it may work as a much-needed complement to online banking.
Today, checking funds through your cell is just a small hill in the mountain-range of financial services: only 400,000 consumers are using mobile banking out of almost 240 million cellphone users in the U.S, according to a TowerGroup analyst.
But if money management can migrate from bricks-and-mortar to the PC, then it’s not far-fetched to see a future where millions of people check their account through a text message, or even buy that LCD TV after punching a few keys on the most ubiquitous device in society today.
