Microsoft Launches Mobile Banking Service

Microsoft has launched a mobile banking service in conjunction with M-Com, an "international mobile banking and payments solution provider" based in Atlanta. The resulting application, M-Com BankAnywhere, will use a number of Microsoft technologies, including Windows, SQL Server and Internet Information Services.

Microsoft and M-Com are aiming to create a mobile channel for banks with best-practice security and risk-management capabilities. Although the functionality for mobile banking has existed for some time, it is still regarded as an emerging market by many financial institutions.

"Additive banking is about adding further choices or channels for banks to serve their customers or making the banking experience more convenient for existing customers," analyst Howard Wilcox wrote on the Juniper Research blog. "Additive banking is a critical strategy and driving force for established banks globally."

Wilcox added, "The crucial aspect is enabling transactions for people to do on the move—after all, doing your banking ain't the most exciting thing in the world, so why not save time and do it while you're traveling anyway?"

The M-Com BankAnywhere application, for which a release date has not been announced, will allow electronic payments via a mobile device.

The announcement "underscores our efforts to provide multichannel integration that allows financial institutions to benefit from mobile and new media channels as part of the overall connected experience," Susan Hauser, vice president of Worldwide Financial Services at Microsoft, said in a statement Sept. 16. "Our alliance with M-Com expands our partner ecosystem for payments and mobile solutions and further validates our leadership position as a provider of payment processing platforms."

The intersection between banking services and smartphones is undergoing considerable exploration by vendors. USAA, a financial services group for members of the military and their families, announced Aug. 10 that it was adding a feature to its iPhone app that would let users deposit checks by taking pictures of the checks with their iPhones. At that time, USAA also announced that it was developing applications with similar functionality for Android, Palm, Windows Mobile and BlackBerry devices.

"Mobile banking is a potentially attractive growth segment for operators, handset makers and bankers," Neil Mawston, an analyst with Strategy Analytics, told eWEEK at the time, "so we will certainly see more innovative services … over the coming years."

A number of financial institutions, including Bank of America and Wachovia, have offered basic services on customers' mobile devices for years. For those companies, mobile banking represents a way to interact with the customer for longer periods of time and thus potentially accrue more loyalty—although some analysts have consistently expressed skepticism that this is effective.

"We have struggled to see the business rationale for mobile banking," Gartner analyst Alistair Newton said in a May 2007 interview. "Chasing after new customers quickly becomes a zero-sum game, where it costs them so much to get a customer from their competitors that it's not worth it, or they lose existing customers in the meantime.

"There is a belief that mobile banking will help them retain customers," Newton added, "but I'm not convinced."