ING Direct lauds Websphere role in mobile banking app success

A 13-year relationship with IBM and its Websphere application integration server has been critical in helping ING Direct of Canada quickly build and operate a mobile banking application, a bank official said.

ING Direct launched a mobile banking application and a mobile banking Web site for Canadians in March on the BlackBerry and iPhone.

On June 7 it added the iPad, Charaka Kithulegoda, vice president of software development at ING Bank of Canada, told Computerworld.

The application relies on Websphere application servers.

The banking application has been a resounding success, with nearly 50,000 unique visitors so far, he said.

Canadian clients of ING Direct can use their RIM and Apple smart phones to check account balances, review transactions, transfer funds, get directions and hours of operations for ING Direct Save Your Money Cafés – and help in locating the nearest ATM.

The application is available for free download at

It was relatively simple to develop, since ING Bank of Canada, based in Toronto, had been using IBM services and Websphere a long time, Kithulegoda said.

“Our relationship with IBM goes back 13 years and with applications on the Websphere platform we have a partnership that helped us go from the mobile banking idea to implementation in only six weeks,” he said.

“If I was not already with IBM, I would certainly consider putting in Websphere to mobilize an application,” he added.

The mobile rollout is in its infancy, but Kithulegoda said he feels the application’s return on investment is already worth more than the costs involved.

Users can check account balances, review transactions transfer funds, locate ATMs, and buy and sell investment funds with the application.

ING Direct has no physical bank locations, so the mobile application has been a way of personalizing the ING banking experience, Kithulegoda said.

“It’s good for business,” he said.

Peter Aceto, president and CEO of ING Direct Canada reiterated the same message in an interview with earlier this year.

“This app is so ING. We came into the market saying we will save customers money, now we are saving them time,” he said. Aceto said the app was developed by ING internally.

ING entered Canada some 14 years ago offering customers then unheard of perks such as high interest savings accounts with no fees or service charges.

Aceto said ING launched the app in Canada because numerous surveys had shown Canadians are early adopters of mobile technology and because of the traction online banking has gained in the country.

“We think that Canadians will be using mobile banking more and more in the very near future.”

As far as IBM Websphere’s capabilities go, however, not all experts are as sanguine as Kithulegoda.

The use of Websphere for application integration to mobile devices has been criticized by some analysts, including Jack Gold of J. Gold Associates.

p>The analyst sees it as an expensive approach that can hold customers captive to IBM for the newest software features, while also requiring them to rely indefinitely on IBM services consultants for integration help.

Gold attended an analyst conference sponsored by IBM at the opening of the new IBM Mass Lab near Boston on Wednesday, and asked an IBM executive whether it would continue to require most of its enterprise customers to rely on IBM Websphere for mobile deployments.

Steve Mills, senior vice-president of IBM Software, answered Gold by saying that enterprise customers are free to build back-end application servers on their own.

He said IBM would not open up Websphere intellectual property in its software to allow certain connections to some other software products, including from competitors such as Oracle, which makes the Weblogic application server.

“I’m not doing enablement for [Oracle’s] Weblogic,” he said. “Oracle can do that themselves. For session control [and other functions]… I’m not going to share that technology with anybody.”

Mills said IBM has done well with Websphere, having deployed 50,000 installations in businesses with 1,000 or more employees, with thousands more installations in companies with fewer than 1,000 workers.

But Gold said IBM could have a bigger presence in the mobile software world if it didn’t tie so many mobile functions to Websphere.

He said IBM middleware is used by about 10 per cent of the enterprise market, a number that could be higher for a company as large and influential as IBM.

Marketing play

And not all observers are impressed by ING Direct’s mobile app either.

“I think [mobile payment] is more of a ‘nice to have’ rather than a compelling feature,” said Rob Burbach, senior analyst, financial insights and buyer behaviour practice at IDC Canada.

Burbach said ING is more into high interest rate savings, business accounts, GICs, and mortgages rather than transactional accounts, where a mobile banking app would be more useful. “It will be interesting to see if they push more aggressively into transactional banking.”

In an interview with earlier this year, Burbach said ING Direct’s mobile app rollout “could be more of a marketing play.”

However, surveys do indicate the environment might be ripe for mobile banking in Canada as well.

For instance, a 2008 poll by Harris/Decimapoints to growing cell phone usage in the country as a major driver for mobile banking adoption. Back then, the survey said more than 72 per cent of Canadian households had access to a cell phone.

Only 44 per cent did in the year 2000.

Mobile penetration is also getting deeper as each household has more than one cell phone, according to Harris/Decima. Mobile security as well as the quality of cell phones and range of styles have considerably grown in recent years.

“Queasy factor” remains a hurdle

Today more than 22 million Canadians have cell phones. Two years ago, at least one in four phones in Canada were smart phones, according to IDC.

A Mercatus study of the Canadian market indicates that nine per cent of consumers already have a mobile banking account and that about 20 per cent plan to start using one by 2011.

The technology is there but Burbach of IDC says the “queasy factor” remains a hurdle. “I think we will see widespread adoption of mobile banking when people start feeling more secure about conducting financial transactions over their cell phones.”

He also said consumers must be convinced that they need mobile banking in order for the service to take off.

On the issue of security, four months ago malware started infectingjailbroken iPhones belonging to online banking customers of ING Direct in Europe.

The “Duh” or Ikee-B worm exploits an SSH backdoor of the jailbroken iPhone in order to turn the device into abotnet.

There have been no reports of such attacks in Canada, according to ING’s Aceto.

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