Visualize this: A woman is pushing a loaded grocery cart through the frozen-food aisle when she gets a mobile phone alert. Her checking account balance has dropped to $100. Uh-oh, the food will be well over that amount.

But wait. Up pops a clickable ad, offering her the chance to sign up - right now - for overdraft protection.

That might be a marketing no-brainer, but it's still wishful thinking in mobile banking. "Banks are starting to ask for this capability," said Drew Sievers, co-founder and CEO of mFoundry, a Larkspur, Calif., technology firm that creates software for mobile banking and mobile payments. "But security risks are a big concern."

Sievers says current mobile marketing strategies have great potential for helping banks gain a greater share of customers' wallets. For one thing, financial services firms can partner with other businesses that want access to their customers, as Visa has done with Starbucks. A mobile gift card application that mFoundry created for Starbucks features a Visa advertisement. Those who use their mobile devices to reload Starbucks cards get an extra $5 added, if they pay with a Visa card.

Mark Schwanhausser, a senior analyst with Javelin Strategy & Research in Pleasanton, Calif., likes this type of partnership strategy. "Banks have incredible insights into how individual consumers spend their money," he says, "and they sit in a spot where they can play an instrumental role in directing coupons, offers, rewards and other savings to consumers."

Sievers says banks also should be looking to drive traffic to their own products and services by connecting with mobile users. Someone seeking real estate information on Zillow.com is a prime candidate for a bank's mobile mortgage ad, for example. "The banking industry has only barely begun to tap into this potential," he says.

Banks' mobile opportunities are different from those of other industries. A bank is unlikely to add new customers via a mobile ad, but it can grow revenue from existing customers, and this is what Schwanhausser predicts will blossom this year.

After all, connecting advertising to the deep demographic and financial information banks already have on customers is powerful marketing, he says.

At Bank of America, which had enrolled 3.8 million customers in mobile banking by yearend, the interaction with customers via handheld devices is progressing from offering basic banking services to better targeting products at customers to meet their needs, says Jen McDonald, head of digital marketing. This year the bank plans to increase spending on mobile marketing by more than 20 percent over last year.

A similar jump is expected industrywide. Forrester Research estimates that financial services companies overall will spend $91 million on mobile marketing in 2010, up from $77 million last year. Still, mobile will continue to make up just 2 percent of the budget for interactive marketing.

Financial services companies are the largest growth sector for mobile marketing, according to the Mobile Marketing Association, a New York-based trade group for wireless carriers, technology vendors and advertisers. The kinds of transactions that banks can spur with mobile ads carry greater dollar values than mobile come-ons from most other businesses.

This promise of lucrative mobile transactions is drawing traditional wireless players into the payments space once reserved for banks. Finnish handset maker Nokia plans this year to launch Nokia Money, allowing customers to transfer funds or make payments via their phone. With 4 billion handsets in the world, Nokia says, the potential is vast.

But the trouble is that not enough of those handsets are smartphones, with the PC-like functionality needed to make banking-related mobile marketing truly robust.

Mobile marketing has other limitations, too, Schwanhausser says. Most banks - especially smaller ones - will have to kick their back-office data systems into real time if they truly want to capitalize on the future potential of offering a customer a product (like overdraft protection) at the moment it is needed (just before someone overdraws an account).

Another obstacle is that mobile marketing is hard to measure. "We do know when an app is downloaded," BofA's McDonald says, "but there is limitation on tracking that to specific ads." Still, she notes, no other marketing strategy has the same potential as mobile: "It's personal. It's local. Your phone knows where you are."

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