Frost Bank Launches Four-Digit PIN Login in New iOS App

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Forget the username and password.

Frost Bank launched Wednesday a smartphone app for Apple's (AAPL) mobile platform that allows its customers to log into their accounts by tapping in four-digit codes. The PIN, which is unique to each customer's iPhone, is designed to allow customers to access their accounts quicker, while adding in a layer of security for the Texas bank.

"People love this," says Jimmy Stead, Frost Bank's senior vice president of e-commerce.

The login technique, he argues, is more secure than user names and passwords because the approach requires two forms of authentication: the physical phone and PIN code. Stead compares the four-digit code login to other common two-factor authentication techniques, such as when a consumer withdraws cash with an ATM card or key fobs, a type of security token.

When a customer initially registers for mobile banking, that person must first provide his online banking user ID and password and the nickname of his phone so the bank can manage the app if the device is lost or stolen. Then, a user creates a four-digit login code that he will use in future visits. That PIN number will generate one-time security codes only visible to Frost Bank to verify the customer. "It's unobtrusive to the customer but stronger authentication," he says.

Frost Bank, which built the app in-house, is a banking, investments and insurance subsidiary of Cullen/Frost Bankers, Inc. (CFR), a financial holding company with $23.1 billion in assets.

"There approach is very innovation and probably very secure," says Avivah Litan, vice president and distinguished analyst at Gartner Research. "The bigger issue is whether consumers are comfortable."

USAA, of San Antonio, also allows members to access their accounts with four-digit PINs.

The development points to a larger trend of companies wanting to authenticate users with something other than usernames and passwords. ING Direct Canada is currently piloting facial recognition for authentication, for example, while other financial services companies are exploring using fingerprinting, voice recognition, iris scans, device fingerprinting as methods to login customers to their accounts.

The four-digit code login isn't the only feature setting the Frost Bank app apart from the banking herd: the iOS app, which landed in iTunes in early March, allows some consumers to deposit up to $25000 and certain businesses to deposit up to $100,000 on a daily basis through mobile remote deposit capture.

"We listen to our customers and it's pretty clear that if the check deposit threshold is too restrictive, it's less useful," Stead says. "That's the driving force behind why the limits are higher. …We would not have been able to do this if we didn't have several things in place."

Though new to mobile, remote deposit capture has been offered by Frost Bank since 2005.

Meanwhile, Frost Bank decided that incorporating visuals into the user interface was also something its customers would want. "The experience is unique," Stead says. "We think we were able to offer an elegant experience that combines beauty and function equally. …More and more people want a personal experience."

To that end, the bank weaved in Texas-themed photo imagery into the app's design and added a button labeled "contact," which allows customers to connect with customer service representatives once tapped, for example. "We aren't hiding the number," Stead says. "We're answering the phone."

Frost Bank's new app includes banking feature staples, such as: find ATMs and branches, view running balances and current transactions and transfer funds. The bank plans to launch an Android app next.

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