Jeff Peiffer was tired of waiting for his bank to offer an app for his phone. So he made one himself, put it online-and watched as it become one of the top finance downloads for Android handsets.

The success of Peiffer's software offers an important lesson for financial companies that have not yet developed apps for phones using Google Inc.'s operating system: Android users are among the most active mobile banking users.

Many banks are not meeting that demand, however, and observers say that by neglecting that market banks are training people to be more accepting of third-party software, an approach that could cost them users in the long run and, in the wrong hands, might also open the door to fraud. Peiffer introduced the Android Banking app in February. It initially let customers of JPMorgan Chase & Co. (where Peiffer banks) view balances, transfer funds and pay bills. He has since updated the app to support customers of PNC Financial Services Group Inc., BB&T Corp. and, as of this week, Huntington Bancshares Inc. Peiffer says he adds new banks based on demand - next up is Fifth Third Bancorp.

In late June, Android Banking was No. 4 in the Android Market's list of top financial apps for sale; Peiffer said it has bounced around the top 10 recently, but is often in the top five. More than 5,000 people have downloaded the $2.50 app.

James Van Dyke, principal and founder of Javelin Strategy & Research, said Peiffer's success is a sign that the market for mobile banking is moving faster than banks have been responding. "Banks have been a little slow to understand the pace by which mobile is unfolding. It's kind of like the early days of online banking."

Banks that do cater to Android users have seen strong demand, with adoption rates by customers exceeding those for apps designed for Apple Inc.'s iPhone or Research in Motion Ltd.'s Blackberrys. A March survey from Javelin further determined that mobile banking users on Android handsets log in more frequently than iPhone users.

Peiffer's success also raises tough security and trust questions for banks. Aaron McPherson, a research manager for payments at IDC Financial Insights, says banks should be aware of where their customers are typing in their passwords. "I don't mean to get on this guy's case, but I would never, ever use an app that was not approved by my bank," McPherson said. Instead, banks may consider working with an established aggregation provider like Intuit, McPherson said.

Peiffer says that despite his own financial interest in keeping his apps online, he would be happy to see more pushback from banks. "If they have their own official app and they want me to pull support ... I'm fine with that," he says. "My real goal is to help encourage these banks to put out an official app and stop neglecting" the Android system.

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