Wireless banking has a long way to go before becoming mainstream, according to this year’s American Banker/Gallup consumer survey.

Respondents expressed little interest in conducting financial transactions over cellular phones or personal digital assistants. Almost 72% of those who own or use a cell phone or PDA said they were not interested in doing financial transactions using these devices. About 28% expressed any degree of interest in using their wireless devices this way.

These responses challenge the handful of banks that are offering wireless services. Nearly 58% of all respondents said they own or use a cell phone or PDA. The question facing the industry is how to get these people interested in using wireless devices for banking and other financial transactions.

If their primary financial institution offered wireless services, most of the respondents who own or use a cell phone said they would mostly be interested in checking account balances (94%) and transferring money between accounts (86%). About 76% said they would use wireless devices to pay bills, 63% would be interested in buying goods on the Internet, 55% would be interested in making stock trades, and 54% in applying for a mortgage or credit card.

The best prospects for wireless banking are customers who already trade securities over the Internet. Forty-three percent of online traders who own or use a cell phone said they would be interested in conducting financial transactions over hand-held devices.

When told of the survey results, Mark Dickelman, senior vice president of mobile commerce at Harris Bank and corporate vice president at Bank of Montreal, said the biggest challenge facing the financial services industry is confusion and misunderstanding about wireless services. “If consumers don’t have a frame of reference, it’s difficult to answer the question,” he said. “Most people have yet to experience what the wireless Internet looks like on phones or PDAs. Once people experience it, it’s a completely different reaction.”

Bank of Montreal’s experience of offering its Veev wireless service to customers for more than a year in Canada and for nine months (including the pilot test) at Harris Bank in Chicago showed that they are “absolutely taking to it,” Mr. Dickelman said. “Once people see it and use it, they find it very useful.” Though the bank is promoting this use for cell phones, it also offers wireless services over PDAs and two-way RIM pagers. It has also equipped several hundred branch employees known as “wireless champions” with phones to show customers how wireless works.

Within Harris’ customer base, Mr. Dickelman said, there unquestionably are exceptions to the more general trend. “A lot of the youth market already have cell phones. We see a population of people who are coming out of university who have never had a land-line phone and have never darkened the door of a bank branch,” he said.

The multidevice phenomenon is growing with the wired generation, Mr. Dickelman said. “Clearly they don’t see any other way of doing business.”

The survey confirmed that younger people are more interested in wireless banking. Among respondents who own or use a cell phone or PDA, 40% of the 18-to-34-year-olds expressed interest in using the devices for financial transactions. Interest decreased among older respondents. About 32% of those 35 to 44 expressed some interest, 22% of those 45 to 54, 17% of respondents 55 to 64, and 8% of people 65 or older.

Lawrence Baxter, executive vice president and head of Wachovia Corp.’s e-business division, had a different take on the survey results. He said they “are quite positive and pretty encouraging.” The results correlate with where Wachovia perceived the market to be, he said. “We recognize wireless is still somewhat uncharted territory. But we’ve committed ourselves to taking it seriously,” he said.

Wachovia plans to introduce wireless banking to its corporate customers in the fourth quarter and to retail consumers in the first quarter of next year. The activities respondents cited as being of most interest to them — checking account balances, transferring money between accounts, and paying bills — comport with what Wachovia thought its customers would want, Mr. Baxter said. “They are simple, chore-driven activities that can be done on a cell phone.”

He said executives at $70 billion-asset Wachovia are using intuition to make informed judgements about where customers will go. “We think if we combine the device adoption rate and our understanding of customer behavior, prospects are high to find this attractive. This will escalate,” he said.

The United States can also learn from the standardization of protocols in Europe and consumer behavior there, where conducting wireless financial transactions is more popular, Mr. Baxter said. He was subdued about how much can be made from mobile banking. “A phone center won’t be a revenue center,” Mr. Baxter said. “It’s an investment we’re taking as an additional cost to drive retention and acquisition. It’s a complementary delivery channel to what we already offer.”

The discount broker, Quick & Reilly, a subsidiary of FleetBoston Financial Corp., introduced wireless trading to its retail customers in June and to its Suretrade subsidiary in March. It has about 400,000 Internet brokerage customers, and 2% of these now do trades using wireless devices such as phones and PDAs, said Thomas C. Quick, president of Quick & Reilly/Fleet Securities Inc.

Recently, FleetBoston integrated Internet brokerage with Internet banking, but the wireless option is still only available to brokerage customers. Quick & Reilly uses software from w-Trade Technologies, and people download the software to their devices. For $30 a month, customers can use their devices to buy and sell stock, check account balances, and view pertinent information.

Mr. Quick said it does not take long for clients to adapt to the new technologies. The survey findings are consistent with what Quick & Reilly has experienced. “When I look back three years, 10% of our business was done on the Internet,” he said. Now that share is 50%. “In a short period, our clients have become adopters. The early adopters are the ones who start and then it quickly filters down into the mass market.” He said he sees increasing use of wireless devices as technology becomes more sophisticated and easier to use. “As word passes among family and friends, people feel comfortable knowing it’s a credible way to access information,” he said.

Bank of America Corp. has also found that many people are open to getting financial information such as account balances and transaction histories through wireless devices, said Trace Poll, senior vice president of the $680 billion-asset banking company. As customers realize the value and conveniences of such services, he said, “they likely will become more inclined to try financial transactions. It’s a natural progression, as with any new technology.”

Bank of America’s research indicates that customers doing online banking are the most interested in wireless transactions. It has 2.4 million online banking users. Wireless devices appeal to a certain segment of the population, “generally those who are mobile and who need information on the go,” a spokeswoman said.

Since October, Bank of America has been testing the technology in California with Palm Pilot users. It offers them account access to view balances and cleared transactions. Even with that basic functionality and no advertising support, “we’re pleased with the results,” the spokeswoman said. “There has been a steady increase in numbers signing up for the service and the number of sessions per user,” she added.

In late August, Bank of America announced it was rolling out wireless banking and brokerage services to private clients in Fort Worth, Tex.; Baltimore, Md.; and Washington, D.C. “To be a leader in wireless financial services, we need to learn from the early adopters and adjust and improve our offering based on their feedback,” Mr. Poll said. “Only then will we be able to identify the value proposition that will make this service appealing to a broader customer base.”

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