The Handheld Bank

As consumers' lifestyles grow ever-more mobile, they increasingly are demanding financial services on the go. To meet customer expectations -- as well as improve productivity and client wallet share -- banks are beginning to roll out mobile and wireless banking applications.

In the battle to stay connected with consumers, banks have leveraged technology advances to develop and enhance distribution channels, from ATMs to interactive voice response systems and even online banking. Now, financial institutions are tapping the potential of wireless networks and mobile devices to serve their customers. As a result, these solutions are helping banks to deliver critical account information and strengthen customer relationships. >>

According to Oyster Bay, N.Y.-based ABI Research, 245 million mobile devices shipped in the third quarter of 2006. And the telecommunications technology research firm reports that the global mobile devices marketplace is on target to reach 1 billion units by year-end. Realizing that almost every banking customer uses some sort of mobile device, financial institutions are rethinking how to exploit these units and wireless networks to foster more customer interaction.

While early mobile solutions caught the attention of financial services firms over the past five years, the "technology just was not ready," says Paul Race, director of innovation marketing for Dayton, Ohio-based ATM manufacturer NCR. Race tests emerging technologies at NCR's Global Research Center for Research and Development for Self-Service Business in Dundee, Scotland. "As we start to emerge from the stage of disillusionment, technology is getting more robust, bandwidth is stronger and customers are more accepting," he says. Like any emerging technology, however, "wireless solutions will only work if consumers see their benefits and adopt them," Race adds.

As statistics prove, few individuals leave home without a cell phone, PDA (personal digital assistant) or other personal wireless communications device. And as more customers rely on mobile devices, it is not surprising that they are managing more daily tasks while on the run. "Mobility is increasingly important in people's daily lives, and these 'mobile' people expect to incorporate the management of their finances into this lifestyle," says Frank Georgi, global lead, CRM financial services, Internet and mobility practice for Accenture in Munich.

That said, banks are in the hot seat as more of their customers are requesting mobile banking services. The trend is so strong in Europe that "research indicates that 25 percent of all U.K.-based banking customers would be willing to switch to another bank if it offered them a comprehensive mobile banking service for free," Georgi reports.

But consumer demand is not the only driver behind the mobility trend in banking. Mobile solutions are expanding internal opportunities for banks as well. "Rather than invest thousands of dollars into stationary PCs, banks can expand the power of their enterprise by leveraging existing wireless networks," asserts Richard Rushing, chief security officer for AirDefense, an Alpharetta, Ga.-based provider of wireless network security solutions.

And wireless applications seemingly are endless. They can empower the workforce, or service customers both inside and outside of the branch. More important, wireless and mobile applications enable banks to create a new marketing channel and extend their brand in new ways. "They allow banks to differentiate themselves in the marketplace and offer their customers more freedom and flexibility," Accenture's Georgi says.

Thus, banks are partnering with technology vendors and delivering more applications via mobile solutions. "The key is to create a two-way channel [wherein] users can deliver and access information in a secure way," says Joe Salesky, CEO of mobile messaging solutions provider ClairMail (Novato, Calif.).

Unleashing the Power of Mobility

The easiest way for banks to whet their appetites for mobile applications is to untether their workforces -- a task that is becoming more important as more associates become mobile, according to Ed Martino, director, finance industry, Sprint. "The number of employees working outside of the office in mobile locations has increased dramatically over the last couple of years," he relates. "Enterprises need a way for these associates to remotely reach into the back office and access databases and mission-critical information," he adds. "Thanks to wireless-enabled laptops and consumer handheld devices, employees can conduct business from a hotel, home or a remote office."

Chicago-based Northern Trust ($52.6 billion in total assets) is no stranger to the mobile workforce. Whether conducting perspective sales or servicing existing clients, Northern Trust's relationship management associates are never far from their BlackBerrys or other handheld devices.

"All PDAs are password-protected and hooked to our server," says Diane Spradlin, the bank's senior vice president and director of enterprise relationship management. "These units keep associates connected to their calendars and e-mail, and deliver information to their fingertips," she adds. "They can also access details about customers rather than carry reams of paper files."

Northern Trust's internal and customer portals are getting renewed attention thanks to wireless networks. "Northern Trust's internal portal provides sales and client servicing partners the capability to access client and prospect information by bringing up a real-time view of the customer," says Deb Dworman, VP, Northern Trust.

And mobile solutions can boost profitability for banks. "Customers are no longer forced to make a trip into the bank," explains Sprint's Martino. "By allowing associates to go to the customer, wireless networks and mobile devices are a catalyst for profit growth."

Loan officers, for example, no longer are tethered to their desks in a branch. "With 220,000 loan officers available in the industry today, they need access to data while on the road," says Shane Hughes, cofounder, president and CEO of Waltham, Mass.-based Pyxis Mobile, a wireless software provider.

While meeting with customers in their offices or homes, for example, loan officers can use wireless laptops and printers for loan origination. "They have access to customer information and can deliver a quote on the spot, enabling customers to make an investment decision," Sprint's Martino says.

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