To the Editor:

Perhaps Tom McGrath spoke too soon in his May 19 commentary, "Wireless Banking: Who Wants the Revolution?" which dismissed wireless Internet banking as a viable economic proposition.

Without citing any research to support his opinion, Mr. McGrath concludes that consumers neither want nor need wireless banking. However, the results of a recent national survey on the market potential for wireless Internet access to financial services information and transactions suggest otherwise.

In a survey conducted by the Angus Reid Group in April on behalf of 724 Solutions, 45% of respondents reported interest in wireless banking services, with the service holding an immediate appeal to 10% to 15% of the U.S. population. Convenience of the service was the driving factor for respondents who expressed interest in a wireless Internet service. Additionally, a majority of respondents said it was important that their current financial institution, or one with which they are familiar, provide the service.

The Angus Reid findings are significant considering that the wireless and online financial services markets are still emerging in the United States. Several U.S. banks are in various stages of implementing wireless offerings. In Canada, however, the Bank of Montreal has already reported a very positive response to the wireless banking and brokerage service it launched a year ago.

Though Mr. McGrath rejects market research conducted by leading phone manufacturers, it is hard to ignore the findings of independent market research groups. By 2003, International Data Corp. analysts predict, approximately 40 million consumers will bank online. Jupiter Communications Inc. estimates that 102 million customers in the United States will access the Internet through mobile devices.

Last year there was only one carrier offering wireless Internet access. Before yearend, all major wireless players will have such an offering in the market, and each will have a focus on wireless banking and brokerage services.

Such findings suggest that the U.S. wireless market is poised to catch up to its counterparts in Europe and Asia, where wireless usage has penetrated more rapidly, and consumers are using mobile devices for everything from conducting financial transactions to buying cans of soda from vending machines.

The BBC reported May 23 that in Japan the number of phones with Internet access will likely surpass 10 million in May, enabling users to bank online and connect to more than 7,000 sites.

An April 29 article in The Economist, "America Rides the Wireless Wave," argues that Americans will soon begin to outpace Europeans in use of wireless service in part because the United States remains far ahead in Internet use.

The proliferation of wireless devices is facilitating consumer mobility. Financial institutions that are pursuing wireless strategies are making the infrastructure investment because they recognize that their customers are increasingly on the move.

The message is clear: Consumers want and expect to be able to bank at their own convenience, not at the convenience of their bank. As a result, financial institutions will need to reach customers through a variety of channels, whether it is through branch offices, call centers, or online via PCs or wireless devices.

As the findings of the Angus Reid study suggest, banks are uniquely situated to leverage their special position of trust to be at the center of their customers' lives. The momentum is clearly building in support of wireless access to financial services - and consumers want and trust their financial institutions to deliver the service.

It is not about moving existing Web content to a mobile device. It is about offering a radically different value proposition that will help financial institutions deepen customer relationships and become key players in a dynamic new marketplace.

The mobile revolution is coming and presents some exciting opportunities for financial institutions. Some banks will choose to ignore these opportunities, and their customers will go their own way. Other banks will embrace them, and their customers will follow.

Greg Wolfond
CEO and chairman,
724 Solutions Inc., Toronto

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