eWEEK content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.
A number of software developers are jockeying to become the preferred source for wireless applications to the financial services industry. And while the institutions themselves are responding by rushing out wireless services, theyre doing so without a clear strategy or clear demand.
Sun Microsystems Inc., Financial Fusion Inc., IBM and other developers announced wireless initiatives aimed at financial institutions during the BAI Retail Delivery banking conference here late last month. Nextel Communications Inc., of Reston, Va., released a separate announcement that it is partnering with Trintech Group plc., of San Mateo, Calif., and Dublin, Ireland, to provide wireless payment platforms to financial institutions.
But while vendors are shoring up partnerships to provide wireless applications and platforms, there doesnt seem to be clear consumer demand or a clear strategy among financial institutions to implement the stuff.
“A lot of financial institutions have wireless on their agendas. They cant afford not to,” said Mark Sievewright, president and CEO of The Tower Group Inc., a market researcher in Needham, Mass. “They were late to the Internet. They wont want to miss that boat again.”
Security is one factor holding back broad adoption of wireless services in this industry, observers said. Other stumbling blocks include low bandwidth and cumbersome devices. On the enterprise side, lack of mature standards is a concern, according to analysts.
Developers looking to answer some of these concerns include Sun, of Palo Alto, Calif., which at the show announced a partnership with the Banking Industry Technology Secretariat, a Washington-based financial industry consortium, for security standardization across wireless formats. Microsoft Corp., of Redmond, Wash., is also working with BITS and other financial industry consortia to solve standards issues.
IBM, of Armonk, N.Y., and Financial Fusion, a Sybase Inc. subsidiary in Westport, Conn., announced that they were teaming up to develop applications and middleware to build financial destinations for online banking and wireless customers.
Financial institutions are rolling out wireless services. Microsoft and Corillian Corp., for instance, announced at the show that New York-based Chase Manhattan Corp. will use Microsofts Windows 2000 platform along with Corillians wireless applications for its Internet banking services.
Sun said that Credit Suisse, also of New York, had chosen Sun to provide the platform for its “youtrade” wireless trading service.
But some observers said banks are simply “throwing things against the wall to see what sticks.” For instance, CyberSafe Corp., a developer of digital certificates, said it is doing business with several companies, including a major brokerage house, that had planned to make announcements at the show. So far, those plans have not come to fruition, according to John Hoskins, vice president of transaction security for CyberSafe, of Issaquah, Wash.
“Six months ago, companies were looking at the space and forecasting pilots,” Hoskins said. “Customers were excited about the business reasons [behind wireless], then they started delving into where the risks are. Its a whole lot harder than anyone thought.”
Despite the hype, not everyone is jumping on the wireless banking bandwagon—at least, not from the consumer perspective.
“Im not convinced yet,” said Andrew Arwas, head of risk management at Barclays Bank plc., in London. “I would not want to spend one minute on one of those little mobile phones to figure out my account. And Im a geek.
“I would do wireless transactions—Im just not sure what that transaction would be,” Arwas said.