10% of Mobile Banking Enrollees Are New to Wachovia, Bank Reports

Three months after Wachovia Corp. began offering a mobile-banking service based on a software application installed in customers' handsets (Digital Transactions News, Nov. 13, 2007), the Charlotte, N.C.-based banking company is seeing new enrollments in the service rise at an average of 40% per week, while 10% of enrollments have represented new customers. These were among early results from the program announced on Wednesday by Ilieva I. Ageenko, senior vice president and director of emerging applications for the bank, at an electronic payments conference in Dallas. Wachovia is among a handful of banks that have launched products in the past few months that allow customers to check balances, transfer funds, and pay bills on their mobile phones. Early results are closely watched by bankers and other observers eager to determine whether mobile banking will fare better this time around than it did in the late 1990s, when some banks introduced handset-based services only to see them founder because of such problems as slow network speeds. Some experts contend wireless networks and handsets are far more sophisticated today, setting the stage for more successful rollouts. Among the customers who have enrolled in Wachovia's service, which uses a software application from Firethorn Holdings LLC (which was recently acquired by Qualcomm Inc.) and runs on both the AT&T Mobility and Verizon Wireless networks, some 77% have been active for the past 30 days, Ageenko told her audience. Funds transfers between accounts is “by far” the most popular activity, she said, with some transfers ranging as high as $25,000. To Ageenko, this indicates a substantial vote of confidence. “Consumers are not afraid” to use the mobile service to move large sums of money, she said. What customers are asking for now, she said, is a broader array of devices and the addition of more carriers. Still, banks confront the question of how to make money from mobile services, she said. “Where is the revenue coming from?” she asked. “All the services are free and customers expect them to be free. Banks need to create a solid strategy to monetize the mobile channel.” Two avenues for doing this, she suggested, lie in mobile payments and mobile advertising.