Mobile Banking Update: What's New from Bank of America?

Bank of America was one of the first institutions to move toward mobile banking in a big way. Two years into the initiative, Doug Brown, SVPO of Mobile Product Development, discusses:
Mobile trends at BoA;
Security hurdles the institution has faced;
Advice for other institutions now getting into mobile banking.

Brown leads the eCommerce Product Development team at Bank of America, where he is responsible for strategy and new product development for online banking, mobile banking and ATM. Most recently, Brown led the successful launch of the Bank of America mobile banking and bill pay products. He has an extensive background in marketing and technology strategy in the financial services, software and telecommunications industries.

TOM FIELD: Hello, I'm Tom Field, Editorial Director with Information Security Media Group. We're talking today about mobile banking, and with us is Douglas Brown, Senior Vice President of mobile product development with Bank of America Corporation. Doug, thanks so much for joining me today.

DOUGLAS BROWN: Thank you for having me, Tom.

FIELD: Doug, mobile banking is a topic everybody is talking about this year. What can you tell us about Bank of America's pioneering program? How many users do you have now, and how are they availing themselves of your services?

BROWN: We launched in May of 2007 with our service, and currently we have over 2.6 million active mobile banking customers. They are using the service to bank anywhere. They want it on their terms, so we see them performing a variety of banking functions including checking account balances, reviewing transaction details, verifying their payroll deposits into accounts and using the service to pay bills and to transfer funds to other Bank of America customers, for example.

FIELD: Those are great numbers Doug. Do you have any sense of what percentage of Bank of America's total customers that represents?

BROWN: It represents about 12% of our online banking base today.

FIELD: That's great. What's the latest addition to your offerings? I know you are updating this consistently.

BROWN: We're very keen to promote and endorse the new mobile devices and handsets that come to market. So we're working very aggressively to support the most popular phones of our customers first and foremost, so we have applications available for the Apple iPhone, the RIM BlackBerry and Google Android. We're working hard as new platforms are coming to market so that customers can have a great experience on devices such as the Palm Pre and other new ones that are coming to market later this year. Beyond that, we are looking to new functionality and capabilities, where the phone really becomes an integral way to manage your finances, both in terms of managing from the phone itself, or leveraging the phone to be an added security channel, because the phone is something that you always have with you. We use that in a service we offer today called SafePass, which allows customers to receive a one-time pass code delivered to that phone that they can use for fund transfer and other activity in online banking.

FIELD: There are a lot of institutions that look to Bank of America as an example, because you were there first and you were there in such a big way. For institutions just getting into this now, and there are a lot of them, what are the biggest security hurdles that they have to clear?

BROWN: Security for us was very important; that was job one. When we looked at the business problem, we had to make sure that the connectivity between the device and the bank servers is guaranteed secured and that it's an encrypted path for those using mobile web for example. You need to design in your architecture the ability to protect those transmissions to and from the device and then secondly you need to be mindful of the circumstance where a customer might lose their phone. So we designed our application to not store any information or credentials permanently on the handset; once you are done with your mobile banking session, there would be no risk if you were to lose your phone after you finish those transaction sets.

FIELD: But Doug, users don't ever lose their devices, do they?

BROWN: [Laughs] It happens more than people tend to even admit, Tom.

FIELD: I know you're right. Now, being a pioneer and being out there first, you have a lot of success, but you make yourself sort of a target for some of the fraudsters as well. In what ways have you had to address some of these security issues as your service has matured?

BROWN: We leverage all the learning that we have in place today to guarantee security for customers. We are vigilant and watchful on activity that happens within our customers' accounts. We have the security features I described to you earlier in our design and we also go to the extent to certify handsets that we support for mobile banking today. We have over 800 different handsets that we have certified as being able to guarantee the level of security we find necessary for our customers. We take all of those precautions very aggressively. And we guarantee all of that for customers, the security guarantee from Bank of America.

FIELD: So, if one of your customers wanted to get into mobile banking, they've got a resource where they can go and find out exactly what support and level of security guarantee, everything they need to reassure themselves, you have?

BROWN: That's correct. We have that information available in online banking today, where they can read in much more detail about the security in place.

FIELD: How would you say that Bank of America is different today from mobile banking in the types of customers you are now able to reach?

BROWN: When we first launched mobile banking, we were reaching the young and technologically savvy type of customer. The first million customers represented early adopters, the student demographic segment for example. Since then, as mobile has really proliferated across demographics and across the entire household income spectrum, we see a lot more impact across the entire customer base. As mobile has moved mainstream, mobile banking from Bank of America has similarly moved mainstream. We're really excited about that and we get a very positive voice of customer feedback about how they are finding new ways to use and leverage the service, and they do truly enjoy the convenience of mobile banking from Bank of America.

FIELD: It's interesting because we do kind of go into this with the cliché notion that we're going to appeal to just the tech savvy people and Gen Y, but it sounds like you are seeing your entire customer base migrate in this direction.

BROWN: We think so, and we think that the trend in mobile technology is to make it more seamless and more usable. As new things come to market, I think that just helps people become more aware and feel comfortable with the service. We of course are always vigilant to make them aware of important functionality capabilities and the security aspects of our product. We expect to continue to see an uptake in the uses and adoption of mobile banking.

FIELD: What do you see next, sort of beyond where you are today? What are the trends that you are looking toward over the next six to eight months?

BROWN: Longer term, we definitely look at the mobile device as a great way to reach customers and provide them new capabilities. We see new levels of security being enabled, such as biometric security models, particularly from some of the more advanced smart phones where we can start to get into authentication based on biometric credentials, a fingerprint for example, or an iris scan. We see some great new capabilities there. In addition, we do see the phone becoming a replacement for your wallet. We look forward to the ability to deliver to customers all their information that is contained in their wallet today and making that resident on the phone so that they will be able to use the phone at a retail point of sale, to actually swipe over what was a card reader now will be a phone reader and go ahead and conduct their commerce in a physical point of sale/retail environment.

FIELD: Realistically, how far away do you think we are from something like the biometrics you're talking about?

BROWN: We don't quote timeframes Tom, but we are very excited about the enabling capabilities and I think we see evidence that more advanced technological capabilities are becoming available in the networks and in the smartphone platforms out there. Don't think it's very far out. We do see this coming to market in the nearer term.

FIELD: Doug, if there were a single piece of advice you could offer to some of the institutions that are just now getting into mobile banking, what would you tell them?

BROWN: I'd strongly encourage them to look at it aggressively because the customer feedback is absolutely overwhelming. For our customer experience, it has demonstrated that you care about your customers and you are able to give them better ways to control and manage their finances, especially in these tough economic times. Mobile is a great way to offer that convenience to customers and they will reward you for it if you are able to provide that to them.

FIELD: Excellent. Doug, I appreciate your time and insight today. Thank you very much.

BROWN: Thank you, Tom.

FIELD: We've been talking with Douglas Brown, Senior Vice President with Bank of America Corporation. For Information Security Media Group, I'm Tom Field. Thank you very much.

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