VIENNA, Va. -
"I am not convinced that all of the planets of the universe have aligned properly at this time" to support the success of banking by cell phone or PDA, said Franklin Myers, -Innovation Center, at $30-billion Navy FCU here.
Myers' sentiments are echoed by the millions of consumers who use mobile devices, but who aren't using them to bank, according to a number of national research firms.
Security is questionable, say consumers. Vonda Burkhart, chief financial officer at the $50-million Employees Credit Union in Dallas, agrees.
"I'm not sure the security protections are in place," she explained. "There are already enough requirements to pass risk audits for Internet-based services; therefore I'm concerned that mobile banking would add costs and stress to staff members."
"Being a small credit union, we are struggling with compliance issues," added Tootie Holmes, manager at $11-million IEC FCU in Springfield, Ill. "We won't offer mobile banking until we see a larger growth in online users."
It's one thing if mobile banking vendors provide sufficient identify verification and data encryption, but credit unions still have to think about the security of member devices, which are more easily lost or stolen than desktop PCs, and of the security of the wireless connection used to transmit data.
Perhaps security concerns have made mobile banking unattractive to Employees CU members: "We've certainly had no requests for mobile banking," Burkhart said.
But don't look only to members for advice on whether to launch the service, said George Kings, VP-information services at the $790-million Los Angeles Firemen's CU (LAFCU).
"Credit unions may ask themselves, 'Do our members need or want this service?' " Kings explained. "But the answer isn't clear, because most members don't know it's available."
Still, LAFCU is also holding off on mobile banking, said Kings: "We have other competing priorities planned for 2007 and 2008."
If Kings had the time and the money, however, he said he'd go forward with the service. "It's a good time purely from a competitive standpoint," he said. "With many of the large institutions implementing solutions, it's only a short matter of time before credit union members will notice."
At Navy Federal, Myers just isn't feeling the pressure from big banks. "Mobile banking is not a competitive imperative at this time," he said. In the coming years, however, new mobile devices and better security will "heat up" the market.
Currently, members can access Navy FCU accounts via handheld devices, but the display is sketchy, Myers said.
That's one of the reasons members at $7-billion BECU can't yet bank via mobile devices, according to Howie Wu, virtual banking director at the Tukwila, Wash.-based credit union. "Due to mobile technology, we've waited to even consider moving towards that channel," Wu said.
The technology is getting better, Wu continued, in part because of the competition from the banking giants. "The channel has recently gained a lot of traction in the financial industry from a transactional standpoint as seen through the adoption by big banks."
Which will lead BECU to deploy mobile banking by 2009, he said. "Mobile banking will become a standard channel of convenience."
more
Read more about mobile banking at cujournal.com and search the following bolded terms in the archive:
* CUs Hot And Cold On Mobile Banking, on CU successes and failures with mobile banking.
* Not Reinventing The Wheel, on Washington State Employees CU's practical approach to mobile banking that relies on the OFX standard for data transfers.
* Mobile-Device Access To Accounts Still Not Seen As Priority, on a study that shows consumers still see mobile banking as an "emergency application."
For Info On This Story
* BECU, www.becu.org
* Employees CU, www.ecudallas.org
* IEC FCU, www.iecfcu.com
* Navy FCU, www.navyfederal.org
* Los Angeles Firemen's CU, www.lafirecu.org
