Alumni News — Week of January 17, 2011

To see Finovate alumni company news in real-time, follow our feed on Twitter here
Acculynk brings PaySecure PIN security to mobile devices. – The mobile PIN payment system should be available to consumers in first quarter 2011. http://bit.ly/finovate119113
AlphaClone is mentioned on Wall Street Journal front page article, “Pack Mentality Grips Hedge Funds.” – The story ran Jan 15, 2011 and details the similar strategies in hedge fund management. http://bit.ly/finovate118113
Backbase opens a New York City office to house field operations staff and help to serve East Coast financial institutions. http://bit.ly/finovate117112
Bill.com partners with Track1099 for easy, paperless IRS-1099 filing. – Users can report independent contractor payments in two easy steps direct from their bill.com page. http://bit.ly/finovate118112
iPay Technologies launches Biz 2.0 Crossover to help small businesses convert to business online bill payment. – The system identifies businesses using consumer online bill pay and targest them for upgrade to the business version. http://bit.ly/finovate119111
Kasasa adds Neighborhood Credit Union to the fold. – NCU is the largest credit union in the Dallas-Ft. Worth area. http://bit.ly/finovate117114
Kony solutions raises $19.1 million for mobile application platform. – Kony creates mobile applications for numerous industries including banking and investments. http://tcrn.ch/finovate119115
Frost and Sullivan names mFoundry “Entrepreneurial Company of the Year” in the mobile banking category. http://bit.ly/finovate121114
Mint and TurboTax team up to make taxes easier. – Mint allows for tagging of deductible transactions and free e-filing via Turbo Tax. http://bit.ly/finovate121111
SilverTail Systems is hosting a Webinar on Jan 27 covering the differences between ecommerce and online financial Fraud. — http://bit.ly/finovate117111
SmartyPig’s cash rewards card wins Paybefore award twice. – Congratulations to Smartypig for winning in two categories, “best general purpose reloadable program” and “best consumer value in prepaid.” http://bit.ly/finovate12112
Joseph Leone, former vice chairman and CFO of CIT Group, joins the board of advisors at The Receivables Exchange. – Leone is a nationally recognized expert in commercial lending.  http://bit.ly/finovate118111

Alumni News — Weeks of December 13 and 20, 2010

To see Finovate news updates in real-time, follow our feed on Twitter

Backbase explores mobile banking in its fall webinar series. http://bit.ly/finovate1293

BlazeMobile creates smart payments sticker.http://bit.ly/finovate12133

BrightScope releases top 30 retirement plans. http://bit.ly/finovate12143

Capital Access special report on “Black Friday” and small business sales data. http://bit.ly/finovate1282   

SunTrust has added the “Transfer Now” product suite from CashEdge including person-to-person and me-to-me transfers. http://bit.ly/finovate12165

ClairMail and Cardlytics partner to provide transaction marketing opportunities. http://bit.ly/finovate1281 

Expensify is hiring for multiple positions. – The company is currently looking for Web developers and computer engineers at several levels. http://bit.ly/finovate1216

FIS launches innovative new mobile banking product. — Users can establish mobile account management with their debit card, no online banking signup needed. http://bit.ly/finovate1291

Geezeo selected by University Federal Credit Union as PFM provider. http://bit.ly/finovate12151

GoalMine hosting cash contest via Facebook to spread the word. http://bit.ly/finovate1292

Kapitall closes series A funding round. — The company did not release funding amounts or sources. http://bit.ly/finovate12163

Kasasa on “green” community banking. — See what a green bank looks like. http://bit.ly/finovate12132

Seventy percent of US Airlines have migrated to Kony Mobile-powered travel apps. http://bit.ly/finovate12142

Lending Club featured in San Fransisco Chronicle, Black Enterprise, and PBS. http://bit.ly/finovate12131

mFoundry deploys Washington Trust Bank’s mobile banking app. — This makes 260 customers so far using the mFoundry mobile applications. http://bit.ly/finovate12161

Congratulations to Mint founder, Aaron Patzer, winner of a TechFellow Award for General Management. http://tcrn.ch/finovate1296

Mozo powering new “Compare, Ditch and Switch” campaign. — The services allows Australians to shop around for better banking services.  http://bit.ly/finovate1283

Just in time for the Holidays, PopMoney gift cards at www.giftcardmall.com

SmartyPig launches cash rewards card with only a one-time activation fee of $4.95. http://bit.ly/finovate12134

Victrio receives $5 million investment for voice-printing technology. http://bit.ly/finovate12141

FinovateFall 2010 Demo Videos Now Available

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We’re pleased to announce that the demo videos from FinovateFall 2010 are now available for free download (or immediate consumption) from the Finovate archives.

This fall’s NYC conference showcased 56 handpicked companies doing 7-minute demonstrations (no slides allowed) of their latest technology innovations to a sold-out audience of 650 financial & banking executives, venture capitalists, press, analysts and entrepreneurs.

Check out these cutting-edge ideas in financial, banking, payments, mobile, lending, investing and security technologies today for inspiration and your next edge on the competition! 

(P.S. If you’re interested in joining us at the next Finovate event, tickets are now on sale for FinovateEurope (Feb, 1, 2011 in London). It is going to be an amazing showcase of European and global fintech innovation!)


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Eric Mattson is CEO of Online Financial Innovations, the parent company of NetBanker, Online Banking Report and the Finovate Conference Series. He can be reached at eric@netbanker.com.

Starbucks Launches First Dedicated iPhone App for Stored-Value Cards

image This is a huge day, and one that I hadn’t expected for at least another couple years. The convergence of mobile payments and caffeine. What more could a mobile banking geek and coffee connoisseur want? 

Starbucks pioneered stored-value cards and launched its first card in 2001. Today, it became the first company (note 1) to create an iPhone app exclusively for a payments card. Apparently, Finovate alum mFoundry helped build the app (cnet story, thanks Brandon).

Users were offered $5 extra credit on their first Starbucks card reload of $25 or more made from the new app. Registered cardholders received an email notification earlier today urging them to “turn your iPhone into a Starbucks card.” (see screenshot below).

Note, the Starbucks Card Mobile app (app store link) is in addition to the regular myStarbucks app which has a store locator, coffee/drink info and a favorites-sharing function (app store link). That app also launched today (notes 2, 3). 

The app is gorgeous and shows how important design can be in creating a trustworthy and easy-to-use payment product (note 4). For example:

Home screen (left screenshot):

  • The card balance is immediately and prominently displayed

Reload screen (middle screenshot)

  • Uses big, easy-to-read buttonsremember, this is a small screen, with a giant green, full-width Continue button  
  • Current balance repeats at the top

Mobile payment screen (right screenshot)

  • The bar code for mobile point-of-sale payments (test only, see below) is rendered over a background image of the card, complete with card number, a nice touch to reassure users and Starbucks baristas that this is the real thing.

Analysis
Of course, the mobile commerce and banking community will be abuzz about the mobile payments test. At 16 Starbucks locations (8 in Seattle and 8 in Silicon Valley), iPhone users will be able to pay at the counter using a barcode generated on screen (right screenshot). Luckily, several Starbucks are within a couple miles of my home so I’ll be able to report back with results as soon as the test locations are live.

But I think the stored value card management functions are more interesting for the present. Just think if you had an application that looked like this for your debit or credit card. Think of the brand-value uptick, PR notice, and word-of-mouth buzz. 

Starbucks Card Mobile screenshots (23 Sep 2009)

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Email announcing the new mobile card app (sent to a registered Starbucks cardholder in the mobile payments test market, 23 Sep 2009, 12:43 PM Pacific)

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Notes:
1. Starbucks is the first company in the U.S. to have a dedicated app for a payments card. Although unaware of any elsewhere in the world, I would expect that card apps exist, at least in Asian markets.
2. The main Starbucks app is currently the 33rd most popular free app in the store and number 1 in Lifestyle; Starbucks Card Mobile is number 46 overall and 3 in Lifestyle (6 PM Pacific).
Update (9 PM Pacific): myStarbucks has moved to number 19 and Starbucks Card Mobile to 38.
3. The Starbucks apps are huge, 6.3 MB for the regular and 3.7 MB for the card, so makes sure you have good reception or are connected via WiFi.
4. However, I have been unable to log in to my actual Starbucks account as of 7 PM Pacific, owing perhaps to overloaded servers.
5. For more info on financial institution opportunities, see our Online Banking Report: Mobile Banking via iPhone.

Citibank Launches Dedicated iPhone Application

image Earlier today, Citibank launched a dedicated iPhone app (iTunes link) powered by mFoundry. Previously, certain Citi cardholders could use the Firethorn iPhone app, but there was no App Store listing under the Citi brand.

The app, which is free to download, is currently number 10 in the App Store Finance (free) category. It will likely rise to the top, at least briefly, as Citi customers download the app.

The app is featured on the Citi homepage today (see first screenshot below) and is front and center on the Citi Mobile landing page (second screenshot below). The bank has also posted a nine-screen demo of the app here (see inset).

Anyone that’s ever used a mobile website will appreciate the Citi login screen (see inset below). A jumbo-sized numerical keypad is included below the signin area to make typing the PIN easier on the small screen. image

The Citi application does the usual four functions:

  • check balances
  • transfer funds
  • pay bills
  • find Citi branches and ATMs

The bank wisely informs users that their iPhone access can be deactivated immediately in the event of a lost or stolen phone by calling its toll-free number.

With this launch, four of the 10 largest U.S. consumer banks have a dedicated presence in the Apple App Store: Bank of America, Chase, and PNC Bank.

Citibank homepage features the iPhone app (2 March 2009)

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Left: Landing page for Citi Mobile (link, 2 March 2009)

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The Citibank application page in the iTunes App Store (link, 2 March 2009)

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Note:
1. See our Online Banking Report on Mobile Banking for more information on the market. 

PNC Bank Launches iPhone Mobile Banking in Apple App Store

image You’d think that seven months after Apple launched the App Store for the iPhone, it would no longer be news when a U.S. bank adds an application to the store.

It’s not like a cost-prohibitive slotting fee is involved. Developers pay Apple exactly zero dollars to be listed in the store (note 1). Apple’s revenue is from the 30% share of any fees charged for an app. All the bank apps are free, so that’s not an issue.

But it is news since the addition of PNC Bank two weeks age (app here) brings the grand total of bank-specific apps to four, five if you count PayPal. Even if you include the several dozen banks supported by Firethorn’s multi-bank app, there are still no more than 40 banks supported (note 2). And there’s not a single credit union, yet. 

Here are the five App Store participants in order of their appearance:

Wells Fargo has an iPhone app, but it’s not yet shown up in the official App Store.

PNC mobile banking app
PNC’s entry is a full-featured app powered by mFoundry. Along with balance and transaction activity, it includes bill pay, funds transfer, and an ATM finder with location-based capabilities. Users must enable mobile banking from within online banking in order to use the app.

The app has risen from number 17 in the Finance category a week ago to 13 today (note 3). However, the app has not yet made it to the PNC website (note 4).

PNC iPhone App screenshots (11 Feb 2009)

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Notes:
1. The app does need to be approved by Apple, a process that can take weeks or longer.
2. Users can also track thousands of financial institutions through Mint or PageOnce.
3. Bank of America is #1, Chase is #4, PayPal is #5, Mint is #6, Firethorn is #9.
4. A PNC.com site search for “iphone” yielded just one result, an iphone listed in a mobile banking compatibility table. (Off topic: Note to PNC Bank, your site search doesn’t function in Firefox 3.0).
5. For more information on the market, see our Online Banking Report on Mobile Banking and the latest forecast in last month’s Online Banking Report Online & Mobile Forecast.

PNC Mobile Banking Offered through Verizon’s Website

Verizon Wireless mobile phone users can now download PNC Bank mobile banking directly from the Verizon Wireless site (here). The free service, powered by mFoundry, is housed in the Features & Downloads area (see first screenshot below).

However, unlike Firethorn's mobile banking app which carries a "recommended" endorsement from the wireless carrier (see second screenshot), the PNC Bank app is found only via site search (see last screenshot). The PNC app is currently not available via browsing the business apps.

Users may click on the Send to Phone button, a shortcut that sends an application directly to their mobile phone for easy downloading. Both mobile banking applications are free.

PNC Mobile Banking app on Verizon Wireless site (3 Nov 2008)

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Search results for "banking" at Verizon's Tools & Applications area
(3 Nov 2008)

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Firethorn's mobile banking app is recommended at the Verizon site
(3 Nov 2008)

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Note:
1. For more information on the market, see our Online Banking Report on Mobile Banking.

Finovate 2008 mFoundry

image The last of our mobile demos is from Carlo Cardilli, SVP business development & sales, at mFoundry

mFoundry is a mobile banking provider founded in 2004. The San Francisco-based company has worked with Citibank among others.

What’s New
mFoundry just launched the second native banking app, available through the Apple App Store. The demo showed a fictitious bank, but the bank that launched the app with mFoundry is IBC.

The iPhone app has full online banking and payments capabilities. It also has an ATM/branch finder that uses the location-based or GPS capabilities in the iPhone.

Mobile is the New Online: IBC Bank Puts Mobile Banking on Homepage

image Eventually the distinction between mobile and online banking will disappear as the devices and services converge (see note 1). But until then, mobile banking, because it’s perceived as cutting edge, is more interesting to many customers. That’s why Bank of America, Chase, Citi and many others have featured mobile banking in on- and off-line media (see previous coverage here).

But it’s not just a mega-bank game; any financial institution can play up its mobile capabilities. Texas-based IBC Bank, in the top-100 with $11 billion in assets and more than 200 branches, flaunts its mobile capabilities with a large banner on its homepage (see screenshot below). The mobile banner currently rotates with an identity-theft-protection pitch.

IBC Bank homepage featuring mobile banking (2 Oct 2008)

IBC Bank features mobile banking on homepage (2 Oct 2008)

IBC Bank releases iPhone app
Last week, IBC became just the second U.S. Bank to release a native iPhone app in the Apple iTunes App Store. The mFoundry-powered application was the 36th most popular finance app yesterday, out of about 120. Following is a screenshot of the application’s entry in the App Store. Bank of America, which launched its app on the first day of the App Store, is the other App Store participant (see previous coverage here).

mFoundry will demo its latest innovations at our Finovate Conference Oct. 14. Video of its previous demo is here.

Apple App Store entry for IBC Bank's mFoundry-powered mobile banking (1 Oct 2008)

Note:
1. For more info, see our Online Banking Report on Mobile Banking.

Mobile Banking = Online Banking

If you are looking for a single article that summarizes the current state of mobile banking, check out Karen Epper Hoffman's feature article, Mobile Banking: Where's the Business Case in this month's BAI Strategies. Karen is one of the most important writers in the financial services press, with a rich industry background, and I always enjoy speaking with her and reading her work.

The business case is indeed elusive: Unfortunately, Ms. Hoffman is not able to answer the question raised in the headline. But it's not her fault. It's simply too early to know how the mobile banking business case will shake out. With just a few hundred thousand users out of 200 million U.S. adults, even finding someone who's used mobile banking is difficult, much less figuring out if they'll do expedited payments on the phone or decrease their costly chats with your service rep.  

There are literally hundreds of factors that will determine whether mobile becomes a standalone profit center or is just one more cost center. Many of those factors won't be known until well into the next decade. In fact, we are likely headed towards a convergence of phone, laptop, and entertainment device, that will make the question moot.

But it matters little: Banks have no choice in the mobile matter. Whether or not the business case is made with straightforward fees (e.g., signature debit) or with a bunch of impossible-to-measure intangibles (e.g., online banking), banks WILL support mobile access, just like they support telephone and online today. 

But HOW they support it during the next five years is a matter of great debate and fortunately our upcoming FINOVATE conference (note 1) includes mFoundry the company behind the most high-profile launch to date, Citi Mobile, and MShift, the company that supports more than 80% of all the live U.S. mobile banking programs.

mFoundry
Even after all the hype of the past 12 months, the fact remains that only one bank, and one vendor, have launched a fully downloadable, custom mobile banking app: Citi Mobile powered by Sausalito, Cal-based mFoundry (see previous coverage here). And with a reference account like Citibank, mFoundry is on everyone's short list for 2008/2009 deployments of downloadable mobile banking & payments apps. I've had a chance talk to CEO Drew Sievers several times this year, the last time at the Mobile eCommerce Summit in June, and I look forward to seeing the latest from his pioneering company at FINOVATE.

MShift
While Citibank may have the highest profile launch to date, the vast majority of financial institutions offering mobile banking, 90% or so, use the platform of San Jose, Cal-based MShift. After meeting CEO Awele Ndili in May at a Metavante user conference, we wrote about his amazing hold on the smaller end of the market and listed the 32 clients they had live as of mid-May (here). There have been several launches since then including one of our favorite credit unions, Tech CU, also located in San Jose (news release here). The thing I remember most from my first meeting with Dr. Ndili is how he manages to run simultaneous live demos from 3 or 4 different handsets at time, including a check image on a tiny flip phone screen. It will be interesting to see if he tries to perform that trick on the FINOVATE stage.
 

Note:

1. FINOVATE 2007: DEMOing the Future of Finance includes 7-minute demos from five key mobile players: mFoundry, MShift, ClairMail, Firethorn, and Monitise Americas (see previous coverage here). While the auditorium seating is sold out, we have a few remaining seats available in a 40-seat overflow room down the hall. That room features a great view of the live audio-video feed of the demos. To register, visit the FINOVATE site and click register in the upper-right corner.