Mobile Banking: The Pioneer's Perspective
Mobile banking is expected to grow exponentially over the next 12 months, as the world's adoption of smart phones increases. But growth in WAP/browser-based banking, as well as growth in the use of downloadable banking applications, means banking institutions need to take more precautions to ensure security and consumer confidence in the emerging mobile channel.

Bank of America ($2.36 trillion in assets), a pioneer in the mobile banking and payments arena, launched its WAP/browser-based mobile banking in May 2007. Through the service, BofA customers can conduct financial transactions, such as checking balances, making transfers and paying bills. From there, the bank launched its mobile downloadable-application banking, starting with the iPhone in May 2008. In October 2008, Android was added, followed by Blackberry in January 2009. A new app for Palm devices was launched over the summer; and in late May, BofA launched its text-based mobile offer.

"Overall, I would say that our strategy continues to be shaped by what our customers are saying and asking for, and making sure that we are driving value and convenience for those customers," says Marc L. Warshawsky, senior vice president of mobile-channel planning and design at BofA, which has the largest number of mobile banking users among all U.S. financial institutions

In this interview, Warshawsky discusses:

  • How banking institutions can ensure their customers and members are accessing and downloading safe mobile banking applications;
  • Why BofA offers mobile banking to its entire customer base;
  • How the offer of mobile banking will change banking for all institutions within the next 12 months.

Warshawsky is the senior vice president of mobile channel planning and design for Bank of America. He is responsible for the planning, product lifecycle and channel development activities for the largest mobile-banking provider in the United States. He joined BofA in 2006 as a senior e-commerce channel consultant and was promoted to e-commerce channel manager in 2007. In 2008, he was named senior vice president of mobile-channel development; in 2009 he was appointed to his current position.

Warshawsky recently led the nationwide deployment of BofA's SMS/text-banking service, which has attracted more than 500,000 active users since May 2010. Before joining the bank, Warshawsky held various leadership positions in product management and engineering at BellSouth Telecommunications in Atlanta. He attended the Georgia Institute of Technology and graduated from the University of North Carolina at Charlotte with a bachelor's degree in mechanical engineering, earning membership in the Tau Beta Pi National Engineering Honor Society. He also earned a master's degree in business administration from the J. Mack Robinson College of Business at Georgia State University.

Mobile Banking

TRACY KITTEN: Mobile banking is quickly changing the financial landscape, not just for the consumers, but also for banks. How secure are these mobile transactions, and what new opportunities is mobile paving the way for?

MARK WARSHAWSKY: Bank of America launched mobile banking in May of 2007, with our mobile Web service. With this service, customers can conduct their most common financial transactions while on the go, including checking balances, making transfers and paying bills. We then followed up with our downloadable applications, starting with the iPhone in May of 2008. We added the Android in October of 2008, and the Blackberry in January of 2009. In fact, we just launched a new app for the Palm device just a few weeks ago. And then, finally, there is out text banking service. This launched in late May of this year, and here, customers can send short text commands to Bank of America, and receive back account balances and recent transaction information, all via text message. Overall, I would say that our strategy continues to be shaped by what our customers are saying and asking for, and making sure that we are driving value and convenience for those customers.

Mobile Users

KITTEN: BofA claims to be the largest provider of mobile banking in the U.S. Can you tell us how you calculate the number of mobile banking users you have, and how do you know how or where you rank among other providers.

WARSHAWSKY: We use active users as our key metric. To be an active user, you must have used the service in the last 90 days. Relative to other providers, we use multiple imagery reports to validate our position.

KITTEN: And how many mobile users do you currently have enrolled?

WARSHAWSKY: Today, we've got over 5 million active mobile Web and app users, and over 500,000 active text banking users.

KITTEN: And what percentage of your overall U.S. customer base is signed up for mobile banking across SMS, Web, downloadable app, or perhaps a variation of the three?

WARSHAWSKY: We've got the 5 million customers on mobile Web and then 500,000 on text banking, and that is on a base of approximately 29 million online users.

Online Users

KITTEN: What is BofA's mobile strategy, and how did the bank launch its mobile service? Did you target specific users initially, such as online users?

WARSHAWSKY: From the very first launch, our strategy was to target online-banking users. That is because to use the mobile Web or downloadable apps, you must be an online banking user, for login purposes. That said, once we launched text banking earlier this year, this service is open to all customers. We are looking at ways to target a variety of customers, drive more awareness, and attract a larger segment.

KITTEN: Does BofA provide mobile banking services to customers outside the U.S.?

WARSHAWSKY: Yes. Customers that can access the Internet abroad from their mobile phone will be able to access the site.

Mobile Banking Security: iPhone and Android

KITTEN: Security concerns have been raised about downloadable banking applications, such as those currently available for iPhone and Android. Given the open-source nature of apps design for Android, how does BofA confirm the legitimacy of these apps, or does it? And how can customers be sure that they are downloading something that is safe?

WARSHAWSKY: Customers should only download apps that are published by Bank of America. The best way to do this is to link directly to the store from our website. Once downloaded, our apps are protected using the same two-factor authentication that we use for online, our site-key product. That is the best way to ensure that customers are interacting with legitimate Bank of America mobile banking applications.


KITTEN: And when you say the "two-factor authentication," can you explain that?

WARSHAWSKY: That is our site-key product. The user selects an image that is provided by the bank to the customer at sign-in, so that the customer knows that they are actually providing this information to Bank of America. Once that customer sees that site key, they then enter their username and password, just like normal, and then provide that authentication from the customer to the bank.

Mobile Apps

KITTEN: Apple Store's apps are closed-source. What does that mean from a security perspective?

WARSHAWSKY: This means that apps for Apple must be submitted to and approved by Apple prior to publishing. This helps mitigate the risks of any fraudulent apps being published into their app store.

KITTEN: Over the course of the next 12 months, where do you expect the U.S. market and the world to see or feel the greatest changes in mobile banking?

WARSHAWSKY: Over the next 12 months, we are predicting an exponential growth in smart-phone penetration. As that penetration takes place, we also believe that mobile banking will grow exponentially, as well. As that growth ramps up, what we will see is a richer set of features and functionality available to the customer, providing more features and functionality that they can do on the go.

Around the Network