One issue banks have struggled with as they develop mobile banking apps is: how to get new customers on board?  Banks generally require customers to be online banking customers before they will allow them to use mobile banking.

The version 2.0 iPhone app BBVA Compass is launching today is the first to let customers enroll in mobile banking directly from their phone, even if they don't have an online banking account. "That's a fundamental change, because for most banks you have to be an online banking user" before you can use mobile banking, says Alejandro Carriles, executive vice president and director of mobile and online strategies at the $65 billion-asset bank, which is based in Birmingham, Ala. "With online banking penetration from 40% to 60% of users, that means you're leaving out 40% to 60% of your customers that are not online banking users. Younger generations are going to skip online banking altogether. They're going straight to mobile."

The new BBVA app has a simple button that says, "Register for mobile banking." Where other banks have wanted to allow mobile registration but have been frightened by security issues, Carriles says the security issues, and the answers to them, are no different for mobile banking than they are for online banking. BBVA provides encryption and multi-factor authentication.

Another new feature of the enhanced app is that without being a customer or registering, a user can find a branch or ATM or click to call customer service.

Once customers have signed in, they can see graphically rich views of their finances — cash flow, pending payments, and the like — using unique capabilities of the iPhone. For instance, by rotating the phone to the horizontal position, they can see greater detail from pie and bar charts. They can view transaction receipts that are identical to the paper receipts provided in the branches. They can click to view the image of any check behind a transaction. "That in itself for me is priceless," Carriles says. "It gives you all the details you want in your hands." Customers can also scroll through all their checks for a particular month while they're balancing their checkbook, rather than clicking back and forth between a transaction page and clicking on individual checks.

The app design is "based on real world usage, what our customer likes to do," Carriles says. "Customers need to be able to flip through their checks at the end of the month and see their transactions." Customers can also create filters, so that for instance, they could review withdrawals over the past seven days. They can view transactions, receipts and checks going back 62 days. "That gives you total control of your finances," he says.

The bank also put design work into its terms and conditions. "This will sound strange, but terms and conditions is an afterthought in most applications," says Carriles. "We made our terms and conditions attractive and readable. I don't think I've seen better-looking terms and conditions anywhere." The terms and conditions have been shortened to two pages and can be emailed from the mobile device. "If you're going to be a standalone mobile banking customer, we want to make sure you can access your terms and conditions in a very readable, usable way, because this will be your main point of contact," he says. "We think we're creating a groundbreaking user experience."

Among the beta testers using the app, the bank has received good feedback. "We asked them to remove the app from their phone because we were releasing it on Monday," Carriles reports. "There was an outcry from customers who said no, I can't live without my app any more. The users say it's a joy to use. When is the last time you heard the words 'joy' and 'banking' together?"

Like many other banks' iPhone apps, BBVA's lets customers transfer funds between accounts, pay bills and view pending and recent payments.

BBVA rolled out its first iPhone app in 2009. "When the iPhone started becoming a popular platform, everybody wanted to rush to have a mobile banking solution," Carriles says. It was a simple, third-party app. "We thought that mobile banking was much more than simply having an iPhone app. We made an effort to not only bring knowledge and development in house, but to really try to offer as many platforms as we could to make it more convenient to our customers. We developed in-house native applications for Blackberry, Android and iPad devices."

The bank's iPad has proven popular with customers. "We have six times more BlackBerry users than iPad users, but surprisingly, the iPad users represent more six times more traffic than BlackBerry users, so they're using it almost 36 times more often," Carriles notes. Similarly, the bank has ten times more iPhone users than iPad users, yet iPad users represent half the traffic of the iPhone users. "There's something they really, really like and they're using it very frequently," he says.

Owing the code and developing all mobile services in-house lets the bank provide the features it wants at its own pace. "We're not at the mercy of a vendor, where what we requested might not be in their plans because other banks might not be interested in that feature," he says. "When you want to do something that truly leverages the user experience on each unique platform, nothing beats going native and doing it yourself."

HTML5, the browser language that could reformat pages for different devices, may change this but, "the problem is that now, HTML5 is not 100% consistent across platforms," Carriles says.

"Our approach is more expensive, and takes more effort and time, but we think the results are worth it," he says.

BBVA plans to release the new features to all its other mobile device platforms throughout the year and to do a new release every quarter with new functionality, Carriles says.

Next quarter, the bank will be looking at "bill payment on steroids," Carriles says. "We're going to go a lot deeper into payments on the next app, we will tweak even more the dashboard screen."