AT&T’s Mobile Banking: A Stepping Stone to a True ‘Digital Wallet?’

Will credit cards, or even cash, ultimately become a thing of the past now that AT&T has dropped the gauntlet by embedding a mobile banking application into its most popular handsets?
By partnering with Wachovia Corp., SunTrust Banks Inc., and Firethorn Holdings LLC, AT&T hopes as many as 30 million customers will ultimately use its new mobile application to view account balances and history, transfer funds, and pay bills from AT&T mobile phones. AT&T will pre-load the Firestorm software on approximately 30 of its most popular handsets.

With CheckFree Corp. acting as a strategic partner, Firethorn will act as an intermediary between AT&T and Wachovia and SunTrust so that customers of both banks can participate in the service.
Wachovia and SunTrust hope to realize the same gains as BancorpSouth, which experienced a 15 percent traffic increase to its Web site after going live with mobile banking on AT&T handsets earlier this year. Others who are purportedly using or actively signing up for the service include FirstBank, Synovus, Regions Financial Corp., America First Credit Union and Arvest Bank Group. All use Checkfree for EBPP functionality.

For all these stakeholders, success will depend on how easy the software is to use, and how astute AT&T is at driving up data usage without surprising customers with higher-than-expected bills at the end of the billing cycle. To start with, customers will have to pay data usage charges. Those charges will vary according to use. Rather than get hit with per-use charges, AT&T is recommending users sign up for AT&T’s data plan, which starts at $9.99 a month.

Transparency to final charges and plans that reflect usage patterns will be the key to satisfying customers. Also important will be the GUI through which customers sign up. That is out of AT&T’s hands, as it will be the financial institutions that act as the initial gatekeepers. Through their financial institution’s online banking Web sites, customers sign up and are issued one-time initialization codes. The ease with which that takes place will be telling in terms of the “stickiness” of the service.

After accessing mobile banking on the AT&T handset, customers will then use the code assigned by the banks to link their account to the mobile application on their device. Customers will then create a personal identification number (PIN) to provide secure access to the application. All data is supposed to be encrypted, and customers should be able to deactivate the service immediately in the event they misplace a handset.

To do that successfully, AT&T will have to have visibility into what devices have been lost so that appropriate de-commissioning of devices takes place, as well as accurate activation and provisioning for replacement handsets. There will also have to be sophisticated data sharing among AT&T and its partners to ensure all stakeholders have the most up-to-date information about what service plans and services have been assigned to banking customers.

AT&T and Firethorn have been working since last year to make the interface as easy-to-use as possible so that banks could easily brand the application and customize requirements. The goal was to reduce the internal development and application-management time for the banks by creating a “carrier-certified” platform specifically designed for mobile devices.

If the sign-up, billing and security prove to be successful, the AT&T/Firestorm combination could be the steppingstone toward digital wallets and applications that allow wireless devices to take over for credit cards and cash.

To make mobile banking as easy as clicking on an icon, AT&T currently is working to further optimize the experience by reducing the number of new-page views necessary to complete a transaction.

It will be interesting to see if customers will latch on to the concept of online banking. While AT&T and its partners feel students and business travelers have a great need for these capabilities, the ease-of-use, transparency into billing, and sharing of data between AT&T and its partners will be deciding factors.

The market is ripe, if research accurately reflects customer needs. According to Celent, approximately 46 million households currently bank online. By 2010, 17 million households will use mobile banking for similar functions.

AT&T Inc. www.att.com
Firethorn Holdings LLC www.firethornmobile.com
SunTrust Banks Inc. www.suntrust.com
Wachovia Corp. www.wachovia.com