“iPhone is the most popular model used … along with iPod Touch,” said Douglas Brown, senior vice president for mobile product development at Bank of America in Charlotte, N.C.
“The iPhone just has such an incredible interface and ease of use to discover content,” he said. “Apple introduced the App Store just one year after launch, and just look at how people have rallied around the platform.”
Brown said mobile banking adoption at Bank of America has been “very strong” since first launched in May 2007, with 2.7 million customers today.
In Alberta an separate initiative is underway to allow customers to soon be checking their bank balances with a text message as the province’s largest home-grown financial institution is set to roll out a mobile banking service.
Brown spoke about the value of mobile banking, as well as its future in an interview with Computerworld. Here are some from that interview:
Last I heard, Bank of America had passed the 2 million mark for mobile banking. Is that correct? We have 2.7 million mobile users, which is very strong. That’s because I think it’s a useful application and provides practicality for customers. They get it and it’s intuitive to most folks. When we designed it, it was to make it easy to use.
It runs on a number of smartphones and other devices, but how many? We designed it to be comprehensive from the get go, so it runs on 800 different handsets, which covers the smartphone fleet and the majority of feature phones. That includes every very kind of OS – the iPhone, RIM, Android, and mobile Web access for others.
So users of Windows Mobile devices have to rely on mobile Web access for your banking app, even though Microsoft takes great pains to say how many devices they run on and how huge they are globally? Yes, so far, but we are excited for the Windows Mobile 6.5 launch later this year. That might open up a direct interface for us. Windows Mobile is in the 20 million devices range, and definitely an OS of some substance.
So is Bank of America building these mobile interfaces? We invented the interfaces in-house, and our architectural design is unique, which allows the flexibility to support diverse platforms. We certify support for new devices to make sure they keep in sync with Bank of America — to make sure we stay in front of every product. We have built an infrastructure that gets information on new devices. We have a small but skilled teams based in San Francisco, Chicago and Charlotte, N.C.
There seems to be a race going on among banks to offer mobile banking services. Do you believe Tower Group’s recent forecast that there will be five times as many mobile banking customers in the U.S., more than 53 million, by 2013? Five times as many in 2013? Yes, I think that’s viable and achievable. With our 2.7 million, our customers have a whole new level of convenience. Online desktop banking is very convenient, but even more convenient when made mobile.
How do you compare with other banks? We’re told we have the largest market share. We started in May 2007, and it took us 13 months to get our first million, and nine more to get the second million.
Tower Group said you have 25 per cent of your online banking customers doing mobile banking as well. Is it that high? It’s not that high, but it’s in the double digits.
What mobile banking and bill payment functions can I perform with a wireless device at your bank? Today you are able to securely log in and access all of your accounts, and manage, as in read-only, all accounts. You can make bill payments, or e-bills, to pay any of your designated payees. You can also transfer funds to any of your own accounts or accounts of other Bank of America customers.
So what sorts of capabilities are coming in the next few years. For instance, will there be near-field communications (NFC) like Japanese transit riders use to pay their fares by waving their phones near the turnstyles? We are aggressively pursuing expansion, with pull payment capabilities to use the phone as a retail credit card. So we are looking for capabilities around physical payment with near-field communications. We are exploring things but we are exploding so fast, that we are not sure this NFC concept will win for certain. Still we are aggressively looking for portfolio capabilities.
On the Tokyo subways, 25 per cent of the riders use the mobile wallet, but there are other verticals, like transit and stadium ticket-taking where quick speed and convenience matter.
What might be inhibitors of NFC and other expansion concepts? NFC involves a complex business model. You need electronic readers at the retailers and the capabilities in the handset. The handset has to have a readable chip, and very few have that today. We also need a mechanism for provisioning the phone for debit and credit card use. We have pilot launches, and we’re looking ahead to broader uses.
There seems to be growing competition between banks and wireless carriers that might want to be like a bank to their customers since they have the wireless networks and the accounting systems already. Well, I can’t speak for the carriers, but we let customers choose. Customers want to do business with the bank brands they trust, and we’ve not forced them into closed wall gardens. We are meaningful to how people like to spend and manage money.
How much do potential mobile customers still worry about the security of their transactions? We knew security was important to customers from the start. Our research shows that people are still very concerned about security. We address that in three major ways. One, we don’t store account information on your phone in case you lose it. Two, we certify different devices, and keep a full list, to make sure every handset has the right level of 128-bit encryption. With proxy connections in mobile, we make sure the connection path is not compromised. Three, we have an anti-phishing mechanism through Site Key, which sends you a custom image so a customer knows when logging in that it is Bank of America and safe. It’s the Site Key we use for online banking applied to mobile. And we also have an online mobile banking guarantee, which means you are ensured to the amount of your accounts.
You were one of the first banks to work with iPhone, which has taken the smartphone market by storm. How has that worked out? The iPhone is the most popular device used by our mobile customers, along with iPod Touch, and makes up 40 per cent of my customer base. It’s dominant.
Why? The iPhone just has such an incredible interface and ease of use which people use to discover content. Web clips bookmark on the front screen. Apple introduced the App Store just one year after launch, and just look at how people have rallied around the platform. Apple looks at us as a great developer.
So why would Bank of America not allow the iPhone to be used by its employees as one of its company-supported devices? It’s a different set of requirements for the customer and the enterprise user, that’s all.
Many bankers globally, even the Gates Foundation, talk about how mobile devices will help those with limited access to banking and financing. That’s because in some countries, the wired infrastructure is not there, or banks aren’t available where the people are. Is getting more Americans who may live in underserved areas part of your goal with mobile banking? It is, very much. We have not just mobile banking, but the largest ATM network, so when you put those together, we do see ways to reach the underbanked. They may be the ones who need to manage a bank balance more tightly than others, so mobile turns out to be a great tool to manage finances. We’re not interested in just being the mobile bank, but we want to extend banking to a broader set of needs.
So I see the value of getting an alert on my phone if my bank says I’m about to be overdrawn. Do you provide that kind of service? Alerts, yes we have 38 different kinds of alerts. Mobile makes it more convenient around managing finances. You can manage it better.
Is your platform set up for stock trades? We’re not trading from the platform, but you can see your Bank of America investment account. It’s read-only.
What else is coming, if not NFC right away? Mobile is also a way to make banking better. One is that you are location aware, so you can find ATMs and physical banks.
Are banks cooperating in rolling out mobile banking among themselves, so I could soon transfer funds between banks by mobile phone? We want to keep our competitive edge, but we cooperate on various aspects, including standards.
So are the Obama bank reforms going to affect mobile banking very much? I think I’d rather not speculate.