Finovate

SMS Banking: Will it Work in the United States?

By Jim Bruene Posted on
Categories: ClairMail, Finovate, Metrics, Mobile Banking

I had an interesting conversation with Scott Loftesness, partner at Glenbrook Partners, and the man behind the curtain at the most successful blog in the financial services arena, Payments News, on my fave five list.

We were debating the merits of the various mobile banking models as he updated the mobile section of his Payments Boot Camp material. For the most part, we agree as to how the market is likely to evolve. But one small difference is our outlook for SMS/text services.

In the report I wrote at Online Banking Report in February (here), I predicted that SMS/text services would be an important bridge technology to get us to full browser-like mobile banking interfaces. Scott's not so sure.

 Apparently, the major U.S banks agree with Scott, so far. There has been little activity in this area. Fremont Bank is the only one throwing their support behind this technique (previous post here), partnering with ClairMail (see FINOVATE below), the biggest proponent of this model in the United States.

Here's the short-term forecast we published Feb. 23, 2007, in our Mobile Banking report (we go out on the limb through 2016 in the full report). The number shown below is U.S. households that have ever used the given mobile technology to access their bank account balance or transactions:

Original 2-Year Mobile Banking Forecast (23 Feb 2007)

                                        2007  2008

SMS banking 400,000 2 million
Mobile website 600,000 1.2 million
One-touch banking (1) 100,000         250,000
     Total (2)                        900,000 2.5 million

Source: Online Banking Report estimates, +/- 33%, Feb. 23, 2007 (report here); estimates are for Dec. 31 of each year
Notes:
(1) Downloadable banking app, eg. rich user interface
(2) Total is less than the sum, because some households use more than one access method

As you can see, six months ago we expected SMS to be the major driver, especially in 2008 and 2009. However, we are somewhat dubious now. Not because we don't think customers will like it, but because it doesn't look like the big players are planning on supporting it. It's too early to revise our entire model, but based on what we know today, here's how we see the next two years.

Revised 2-Year Mobile Banking Forecast (30 Aug 2007)

                                         2007          2008            2008 Change (from 23 Feb)

SMS banking 50,000 300,000 (1.7 mil)
Mobile website 600,000 1.5 million +250,000
One-touch banking (1) 100,000         350,000        + 100,000
     Total (2)                        700,000 2.0 million  (500,000)

Source: Online Banking Report estimates, +/- 33%, Aug. 30, 2007 (report here); estimates are for Dec. 31 of each year

Why we still like SMS banking

As I was rethinking the forecast, I read Walt Mossberg's column this morning and was reminded why I believe the United States is on the verge of mass-adoption of text-messaging. Mr. Mossberg was extolling the virtues of the new upgraded Yahoo Mail, specifically how it supported text messaging, e.g., users can send a text message to a phone directly from Yahoo Mail on their desktop PC.

Our take: As text-messaging is added to popular desktop email programs, Gmail, Hotmail, and even Outlook, it will make messaging a common activity among the core online banking constituency, the 30-to-55 crowd. As this group warms up to the convenience of text messaging, they will be far more receptive to retrieving basic bank and card-balance data in the same manner.

More important, what do you think? Comments are open. Everyone that leaves a substantive comment on this thread, and emails me their mail address, gets a $5 Starbucks card (note 1).

See the major mobile vendors DEMO their latest at FINOVATE 2007

ClairMail, along with four other mobile banking platform providers, will be DEMOing their latest solutions at our FINOVATE 2007 conference. The Aug. 31 deadline for early-bird admission is approaching quickly, so reserve a seat now.

Note:

1. Industry participants only.

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Last Chance for FINOVATE 2007 Early-Bird Discount

By Jim Bruene Posted on
Categories: Finovate

Dear NetBanker readers:

Since announcing our first-ever financial-products conference two weeks ago (here), tickets to FINOVATE 2007 have been selling at a brisk pace.

Already we have an excellent group of attendees from several top-10 banks, top-3 card issuers, and top-5 brokerages. In addition, we have representatives from community banks and credit unions along with a half-dozen VCs, analysts, a law firm, and the usual smattering of product folks from major bank tech companies. There is also a small, but growing, international contingent, mostly from Europe but also from as far away as South Africa. And the press and blogger count is now in double digits (see note 1).  

In addition, we'll also have execs from the following twenty presenting companies available for one-on-one discussions after their DEMOs (see note 2): Andera, Billeo Inc, CheckFree, ClairMail, Firethorn, Geezeo, Digital Insight (an Intuit company), Identity Theft 911, iPay Technologies, Jwaala, Lending Club, Metavante, mFoundry, Mint, Monitise, MortgageBot, MShift, Online Resources, Prosper, and Yodlee.

To be part of this inspiring day of demos, deal making, and decidedly good networking, sign up today to lock in the $200 in savings from the normal $695 price. Don't delay, the early-bird price ends August 31. And with more than 120 of the 200 available seats already spoken for, it's unlikely there will be any left at the door.

See you in New York October 2nd!
 
Jim Bruene, Editor & Founder
Online Banking Report & NetBanker
jim@netbanker.com


Notes:

1. Members of the press and bloggers should email me to request a press pass.

2. All the presentation slots are full, so if you want to be part of this event, you'll need to purchase of one the few remaining admission tickets here.  

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FINOVATE 2007 Lineup: The Lending Innovators

By Jim Bruene Posted on
Categories: Finovate, Lending Club, Loans & Credit, Mortgagebot, P2P Lending, Prosper

As we enter the final week of summer, we will begin showcasing the companies that will be DEMOing new products and services at our inaugural conference FINOVATE 2007. See here for the complete lineup.

Person-to-person lending
P2P lending has grabbed headlines around the world since it launched in the the United Kingdom in March 2005 by Zopa. We are pleased to have on the FINOVATE agenda the two leading U.S. providers: Prosper, the brain-child of E-Loan founder Chris Larsen, and Lending Club, which launched its exchange on the Facebook platform just three months ago.

Both companies received significant cash infusions this summer and we're looking forward to seeing what enhancements the lenders will showcase at FINOVATE 2007.

Lending Club received a significant $10.3 million first round last week (blog entry here). Since the company's launch of Facebook three months ago today, it has closed 134 loans averaging approximately $5,600 for a total of $750,000 in originations.   

In June, Prosper, the winner of an OBR Best of the Web award last year (note 1), secured a $20 million third round bringing total funding to $40 million (previous post here). The company now has more than 380,000 members and has funded nearly 14,000 loans totally $80 million. Since inception, Prosper has posted more than 168,000 loan listings from more than 75,000 borrowers.  

Mortgage lending
Here's a bit of trivia for Monday afternoon (or Tuesday morning if you read NetBanker via email): What was the first profitable banking website? And no, this is not a trick question with the answer being "none" or "no one knows" (see note 1).

The answer: Bank of America in 1994, or at least that's what an exec told the audience at the first conference on Internet banking held in the summer of 1995. Practically before anyone outside of academia or Silicon Valley had heard of the Web, BofA was using it to produce mortgage leads in the lucrative California market. I can clearly remember the woman who ran BofA's website saying, "mortgage leads are already more than covering the bank's costs (of its website)." Of course, that was in the days when a website cost less than a couple billboards.   

We've been writing about online mortgage lending since that first 1995 conference. One of our favorite lending platforms, winner of the second mortgage-related OBR Best of the Web award in 2001, is MortgageBot. The company was also named to last year's INC 500 list of the nation's fastest growing private companies producing a 560% revenue increase during the YE 2002 through YE 2005 period. 

At FINOVATE 2007, MortgageBot will take the stage to show a radical new approach to mortgage shopping that its been testing for some time now. We can't release the details yet, but we were luck enough to get a sneak peek on Friday and were very impressed!

Note:

1. Our sister publication, Online Banking Report (OBR), typically names 6 or 7 companies as "Best of the Web" during the course of each year. It is earned by launching a product or service that significantly "raises the bar" in online delivery of retail banking and lending products.

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FINOVATE 2007 to Showcase the Future of Mobile Finance

By Jim Bruene Posted on
Categories: Conferences, Finovate, FINOVATE Conference

Link to FINOVATE registration page

You may have noticed that the blogging machine has slowed down a bit during the past few weeks (see note 1). It's not because of a lack of industry movement. Far from it. It's because we've been putting together a scorching hot conference, our first ever!

But it will all pay off on Oct. 2 when twenty of the most innovative companies in the financial, banking and lending industries gather in New York City to offer a glimpse of the future of online and mobile banking at FINOVATE 2007: DEMOing the Future of Financial Services.

Following the popular format pioneered by DEMO, FINOVATE 2007 will provide companies with a mere seven minutes to “wow!” an audience of 200 leading executives, investors, analysts, members of the press and bloggers with actual demonstrations of their latest and greatest products and services (no Powerpoint allowed!). The demos will be followed by intimate networking sessions where attendees will be granted unprecedented access to these innovative companies and their executives.

Many of the twenty presenters have mobile solutions, but five are focused entirely on the mobile space (see note 2 for the full presenter list):

ClairMail, Firethorn, mFoundry, MShift, and Monitise 

General admission tickets for the event are extremely limited (fewer than 100 remain!). And with only 44 shopping days left, you'll want to get yours today and qualify for the early-bird rate of under $500. To register, visit our registration page at finovate.com or call us at +1 (206) 517-5021. Don’t miss out on your chance to see what’s next in P2P lending, online account opening, bill payments, mobile banking, social personal finance and more!

(Member of the press or industry blogger? Email us at finovate@netbanker.com to request a press pass.)

Notes:

1. Special thanks to guest blogger Brandon McGee for keeping the spiderwebs from accumulating the last two weeks.

2. Full presenter list (in alphabetical order): Andera, Billeo Inc, CheckFree, ClairMail, Firethorn, Digital Insight (an Intuit company), Identity Theft 911, iPay Technologies, Jwaala, Lending Club, Metavante, mFoundry, Mint, Monitise, MortgageBot, MShift, Online Resources, Prosper Marketplace, and Yodlee.

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FINOVATE 2007 Conference to Showcase the Future of Online Personal Finance, Banking and Lending in Fast-paced Demo Format

By Jim Bruene Posted on
Categories: Conference Calendar, Finovate

Link to FINOVATE registration page

If you've wondered why the NetBanker blogging machine has slowed down, it's not because we've wilted in the summertime heat. No, it's because we've been putting together a scorching hot conference, our first ever! I can't begin to tell you how much fun we've had negotiating for a NYC venue, finding a top-notch A/V crew, and building a website on short notice!

But it will all pay off on Oct. 2 when twenty of the most innovative companies in the financial, banking and lending industries gather in New York City to offer a glimpse of the future of online and mobile banking at FINOVATE 2007: DEMOing the Future of Financial Services.

Following the popular format pioneered by DEMO, FINOVATE 2007 will provide companies with a mere seven minutes to “wow!” an audience of 200 leading executives, investors, analysts, members of the press and bloggers with actual demonstrations of their latest & greatest products and services (no powerpoint allowed!). The demos will be followed by intimate networking sessions where attendees will be granted unprecedented access to these innovative companies and their executives.

The presenter list includes (in alphabetical order): Andera, Billeo Inc, CheckFree, ClairMail, Firethorn, Geezeo, Digital Insight (an Intuit company), Identity Theft 911, iPay Technologies, Jwaala, Lending Club, Metavante, mFoundry, Mint, Monitise, MortgageBot, MShift, Online Resources, Prosper Marketplace, and Yodlee.

General admission tickets for the event are extremely limited (there are less than 100 left!). And with only 47 shopping days left, get yours today and qualify for the early-bird rate of under $500. To register, visit our registration page at finovate.com or call us at +1 (206) 517-5021. Don’t miss out on your chance to see what’s next in P2P lending, online account opening, bill payments, mobile banking, social personal finance and more!

(Member of the press or industry blogger? Email us at finovate@netbanker.com to request a press pass.)

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