AP News, April 2nd, 2007
Citibank, the retail banking arm of Citigroup Inc., said Monday it's starting a mobile banking service that customers can download to their cell phones.
The service, Citi Mobile, will be introduced first in Southern California and should be available throughout the United States by midyear, bank executives told a news conference in New York. Citi joins other U.S. financial institutions that are rolling out wireless banking applications.
"The phone could be the key payment vehicle" of the future, Citigroup chief executive, Charles Prince, said. "Putting the whole branch on the phone is a big step."
New York-based Citigroup, the nation's largest financial institution, sees the new service as yet another channel for customers to use for their banking, beyond the Internet bank Citibank Online, automated teller machines and the Citi call center operations.
The new mobile service will be free to consumers, although they probably will have to pay data download charges from the cell phone companies.
Late last month, Cingular Wireless announced plans to introduce mobile banking capabilities with four prominent banks _ the biggest such initiative in the U.S. but still shy of the industry's long-discussed goal of turning cell phones into credit cards. The deals involved Wachovia Corp. of Charlotte, N.C.; Regions Financial Corp. of Birmingham, Ala.; SunTrust Banks Inc. of Atlanta; and BancorpSouth Inc. of Tupelo, Miss.
To use the new service on an existing AT&T mobile phone, customers will need to download a program. AT&T plans to begin embedding software on new handsets starting in the second half of 2007.
Citibank's new mobile service _ which will require registration of a specific phone and selection of a six-digit access code _ will allow the owners of cell phones and other wireless devices, like the BlackBerry, to review balances and transactions, transfer funds among accounts, pay bills, search for Citi branches and automated teller machine locations, or connect to Citi's customer service centers.
Maura Markus, president of Citibank North America, told reporters Citi's offering was different from most other mobile banking services because it involved an application that customers download to their cell phones. When they connect, the data is encrypted "the same as online banking," Markus said.
She added that the information never resides on the phone, so that if the device is lost or stolen the banking information is secure. If a cell phone goes missing, Markus said, the consumer "deactivates the cell from the account," just the way a consumer would deactivate a credit card that was lost or stolen.
Citibank said the service was developed in conjunction with mFoundry Inc., a Sausalito, Calif., company that specializes in mobile application development. It said Citi Mobile has been engineered to run on more than 100 devices and that among the carriers that have agreed to the service were AT&T's Cingular Wireless, Sprint and Verizon.
Dan Schatt, senior banking analyst with Boston-based Celent LLC, said mobile banking applications didn't fare well when they were introduced in the late 1990s, but there's a much better chance of success now "because of the ubiquity of handset penetration in the United States." At the same time, a growing number of consumers _ about 40 percent of households _ now use online banking.
"Mobile banking is a very natural extension," he said.
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On the Net:
http://www.citi.com
http://www.mfoundry.com
