Financial companies, discovering that people who bank by phone don't always bank online, are changing how they look at mobile services.
Once considered just a component of online banking, mobile services that function independently of PCs are emerging. Banks have realized that mobile phones are a delivery channel in their own right.
"There's a whole group of customers for whom text banking is very attractive, and these are customers whose lives don't revolve around a PC," said Arah Erickson, Wells Fargo & Co.'s head of retail mobile banking.
"It's very hard for those of us whose lives do revolve around a PC to even imagine."
Like many banks, Wells initially offered mobile services as a feature of its online banking site. To access account balances and other information through text-message commands sent from a phone, customers first had to sign up online.
But the San Francisco banking company said last week that any customer can now sign up for its text-message banking services, whether they use the Web site or not.
Erickson said the shift resulted from a realization that there is far less overlap between text users and online users than the company had originally assumed.
When Wells introduced its mobile banking service three years ago, online customers "really made sense as the primary launching point," particularly as the new service was paired with a mobile version of Wells' Web site, Erickson said.
But some mobile users took to texting heavily. Erickson said the average text user sends about 19 text commands a month.
This group's habits further indicated that they did not necessarily consider themselves online banking users — if text messaging replaced anything, it was customers' use of Wells' automated voice system, not its online banking system.
As the service evolved, Wells realized that those customers considered texting to be not a useful feature of online banking but a channel all its own. "It's really been a process of listening to our customers. Launching, and then listening to our customers," Erickson said.
Today, Wells customers can sign up for the text service through a mobile Web site presented on their cell phones. This is the only time users need any kind of Web access, Erickson said. From then on, Wells customers could make simple inquiries, such as account balances, without ever touching a computer.
People who send a text message to check their balances receive the answer by text.
Text banking customers typically include anyone whose job offers them limited computer access, such as nurses, teachers or construction workers, Erickson said. It also appeals to younger customers, whose lives often revolve heavily around cell phones and text messaging.
But even those definitions are not so clear-cut, Erickson said. To many, text banking may simply be the easiest option available at the time.
"Even if you have a PC in your home … the PC's on the other side of the living room and I'm on the couch, and I'd rather check my balance right here," Erickson said.
FSV Payment Systems Inc. of Houston, a prepaid card processor that primarily offers payroll cards, has made a similar observation.
Internally it calls its product a "bank on a card," because it strives to offer its unbanked customers many of the features they might find at a bank. These include products such as a savings account and line of credit, but it also includes offering banklike levels of access to customers: online banking, online bill pay and text message inquiries.
Jonathan Palmer, FSV's president and chief executive, said that although his audience could access its balances online, "a very large percentage sign up for text messaging."
Mobile services allows the payroll card users to have the same level of control other people gets through online banking without having to hover over a computer to do so.
"They are using it to simply be notified every time the card is used," Palmer said. Text message banking is "used, simply, to manage money."
The popularity of the feature among prepaid card users might suggest that text banking is most popular among the unbanked or underbanked, but Erickson does not see it that way.
At Wells, use of text access "doesn't translate, necessarily, to customers with less products," she said. In fact, Wells Fargo has found the opposite, that text users are often among its best customers, who have multiple accounts with the bank.
"I don't think it's a clear story about just appealing to a specific group," Erickson said. "There could be a lot of pockets of folks" who prefer text access to online access, she said.
Donald MacCormick, the vice president of product and engineering at ClairMail Inc., said the Novato, Calif., financial technology vendor's text banking service is currently used by all of its customers as a feature of online banking — but that attitude is quickly changing.
Many bank clients have begun to realize that text messaging and online banking don't go hand in hand, MacCormick said.
With text message services, "people are starting to talk about it as a feature of the product, rather than a feature of online banking," he said.
Banks are taking steps to make mobile a separate channel, MacCormick said. For example, some banks want to make it possible to enroll in the text service through a call center instead of a Web site, but those discussions are in the early stages.
MacCormick was hesitant to project when such a switch would take place, but was certain some banks would make the switch by yearend.
ClairMail is also seeing signs that some features from the mobile channel are migrating to other parts of the bank. One customer, which MacCormick would not name, is testing a card product that would require customers to sign up for security and fraudulent activity text alerts.
Nicole Sturgill, the research director for delivery channels at TowerGroup, a research firm in Needham, Mass., said banks will "have mobile banking customers who are not necessarily online banking customers," so making online banking enrollment a prerequisite could be a deterrent to some people who want to bank by text.
"I've heard a lot of people talking about the fact that it's not necessarily the same crowd," she said, though Wells is among the first banks she has seen to separate the two channels.
Sturgill said it makes sense that mobile — even the text-only version of mobile — is perceived as a distinct channel. For a channel to find an audience "doesn't necessarily mean that each channel has to be all things to all people," she said.