Monday, August 23, 2010

Mobile Banking Coming To Your Smartphone

While customers seem to want more flexibility and control over their money, security has been a big issue on smartphones. Nevertheless, there are Apps being created for iPhones, Android and other mobile devices, that allow customers to check balances and transactions by sending a text message request. Bank of America for example has signed up 5 million of its customers since its mobile service debuted in 2007.  

Wells Fargo on the other hand has launched a multiple platform strategy allowing customers to access their accounts by:
- sending an SMS to a short code;
- going on the Bank's mobile website;
- or by using mobile Apps (iPhone, Android, Blackberry or Palm). 

Wells Fargo credit card customers can sign up for a text alert every time their Visa card is involved in a transaction.  So depending on how the customer feels like engaging Wells Fargo has produced a number of options, which is a clever strategy that allows the market to evolve as per the customer needs and wants.  Even if you are not comfortable with mobile banking per se, at least the text message alerts are a way to stay on top of any fraudulent activity almost immediately.  

True mobile banking with the ability to swipe your phone and complete a credit card transaction is also coming. Bank of America is currently testing such a system. It is a sophisticated technology requiring the installation of a chip in your smartphone and a software application. The chip emits a radio signal that is received by a device at the retailer. Customers either tap the device or wave their phone nearby.  This pilot program starts in New York City in September 2010. 

I still have to wonder what happens when you lose your smartphone?  You not only lose your personal data but it seems like you lose all your credit cards too - in one fell swoop.  This seems like a perfect opportunity for the bad guys to snatch your phone. Having some sort of Pin number to complete the transaction makes sense to me.  And while you can remotely call your phone to wipe out the data, a thief can still do a lot of damage with that mobile credit card before you are able to activate a 'destroy sequence'.  What are your thoughts?  Convenience or sheer madness? 

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