Is mobile banking a go?

Cell-phone technology might be ready

Eight years ago, mobile banking -- that is, banking via cell phone -- had the consumer-finance sector abuzz. It was the next big thing, the industry said, and some insiders predicted that banking by cell phone would become more popular than banking by computer.

Those forecasts, of course, fell flat. Consumers weren't ready, and neither were the phones. And the banks that had thought otherwise, including Bank of America and Wachovia of Charlotte, shelved the mobile-banking idea.

Now, the banks say, things have changed. And for the second time, they're placing bets on mobile banking.

What's happening

With mobile banking, you don't need a computer to check balances, pay bills and transfer funds among your accounts. All you need is a Web-enabled cell phone.

Bank of America, Wachovia and BB&T of Winston-Salem, among the biggest banks in the Triangle market, have rolled out m-banking programs in recent months. Most other big banks, including Citigroup, Wells Fargo and JPMorgan Chase, have also jumped on board.

This time, they're promoting it as a supplemental service.

"You're not really going to replace a paper statement with a mobile device," said James Van Dyke, president of Javelin Strategy & Research of California.

Instead, Van Dyke and others predict, consumers will mostly use mobile banking when a computer isn't available and only for simple, urgent tasks.

If you're on the bus and remember that your cable bill is coming due, you can pay it. If you're at the mall and your child calls asking for money, you can bail her out by transferring a few bucks to her account. If you're at a restaurant and don't know whether you have enough in your checking account to cover a second round of drinks, you can find out (and, the banks hope, move money from your savings if you don't).

"Our customers really like the convenience of being able to access their accounts and pay their bills 24 hours a day," said Bank of America spokeswoman Betty Riess, referring to customers who use online banking. "With mobile, it extends that convenience ... to being able to access your account from virtually anywhere."

For all the talk about convenience, the banks have other reasons for pushing mobile banking. It gives them another platform for advertising. It gives consumers another reason to stick with their bank, because they have intertwined their cell phone with it. And it can save the banks money because, presumably, fewer people will bother the call centers with their questions.

"Mainly those calls are just people wanting to know what their balance is," said Nick Holland, a senior analyst at Aite Group in Boston. Each call, Holland said, typically costs a bank $14.

Will it work?

In other parts of the world, mobile banking is old news. That's partly because the soil for m-banking is richer in countries where computers aren't abundant. Fundamo of South Africa has had mobile-banking customers in Africa for at least six years, according to Aite Group.

In the U.S., where mobile banking is in its nascent stages, it's hard to pin down the number of people who are using it.

Aite Group estimates that there are 1.5 million mobile banking users in the U.S. It predicts that number will rise to 35 million by the end of 2010, citing faster networks, more advanced phones and more willing consumers as its reasons.

Bank of America, which began offering mobile banking nationwide in May, said it had signed up 616,000 participants as of Dec. 31. "I'd say we've been very pleased with the response," Riess said.

But not everyone is buying the hype of Mobile Banking 2.0.

"We hate to rain on this parade, but here's the reality: Today's consumers still aren't very interested in mobile banking," said analyst Catherine Graeber at Forrester Research in Massachusetts.

Most consumers, Graeber said, don't view their banking tasks as so urgent that they can't wait until a computer is available.

Security worries are a factor.

"Consumers always associate security concerns with new technologies," said Van Dyke, though he expressed confidence in the safety of m-banking.