June 29, 2007 - American Banker Article By: Steve Bills

Some of the financial companies developing mobile banking services also are working on ways to use the channel for something else: as a marketing tool for themselves and for their business customers.

Though early buzz on mobile banking has been largely positive, the technology is still very new and not widely used. As a result, financial companies have been experimenting with the mobile channel in a variety of areas, including direct marketing, to find out what applications consumers will accept.

Tom Spitzer, the president and chief executive of Tyfone Inc., a Portland, Ore., mobile banking technology vendor, said that the mobile market is so new that it is unclear how consumers will want to take advantage of these capabilities.

“What do banks want to do in the mobile channel, given that they may not be able to tell you what they want to do?” Mr. Spitzer said. “And the other question is what do customers want to do with their mobile devices.”

Tyfone plans to have four trials of its “bank-centric” mobile platform under way by yearend, including a marketing program that the $43 million-asset Bank of Oswego in Lake Oswego, Ore., plans to introduce.

Dan Heine, the two-year-old bank’s chief executive, said that the program would target retail customers with ads from its business customers. The bank is about to begin testing it with employees and will follow shortly with customers.

“We’re a couple of months away from broad deployment,” he said.

Though the ads will be directed to consumers, Diana Yates, the bank’s executive vice president and chief financial officer, said it likely would be more valuable to commercial clients.

“We want to provide additional services to our existing merchant customer base,” she said.

Bank of Oswego’s commercial customers will be able to send text messages to bank customers who opt in to receive the pitches. For example, a restaurant trying to stimulate weeknight trade might have the bank send people a message reading, “Have a bottle of wine on the Bank of Oswego if you use our debit card,” she said.

The point is to extend a traditional strength of community banks — strong customer relationships — into a new technological realm, she said. “If you’re a merchant customer of our bank, we’ll help you grow your business. And we’ll send them a bill for marketing at some point, if we’re successful at it. It’s something we’ll be able to measure and tweak.”

Mr. Spitzer said that Tyfone plans to work closely with Bank of Oswego to conduct customer surveys and focus groups to figure out how to make the “offers even more relevant” to them. “Getting customer information is very important. We can adapt this platform to any application that fits customer usage.”

Wells Fargo & Co. and Visa U.S.A. Inc. plan to test “mobile coupons” as part of a payments trial that the two San Francisco companies are launching this summer.

Michele Janes, a senior director in Visa’s product innovation group, said that shoppers could store such offers on their mobile phones and present them to merchants electronically, using the same contactless technology that lets customers use the phones for payments.

In earlier trials, people could download, for example, information about certain products to their phones while browsing at a store.

With its video screen and keypad, a cell phone could provide a different kind of payment experience for consumers than conventional cards, she said. “We’re testing a couple of different approaches.”

Last month DebtFolio Inc. of Framingham, Mass., began offering an aggregation service called Geezeo Mobile. The company says it is the first to enable text-message access to all of a user’s financial accounts.

Shawn Ward, one of the company’s founders, said the service is based on technology from the New York account aggregation vendor CashEdge Inc. Users who sign up at the Geezeo Web site can register their checking, savings, or card accounts from any bank.

Currently, the service offers only balances transmitted on demand to a mobile device, but Peter Glyman, DebtFolio’s other founder, said that customers also will be able to conduct transactions in the near future.

For DebtFolio, mobile phones are only one delivery channel for a larger “social personal finance application” that would reside on the Internet. Mr. Ward said his company wants to apply the social networking aspects of sites such as to personal finance and is aiming at people ages 18 to 34.

“We want to bring some social aspects into the application to try to raise the collective intelligence of the community,” he said.

For instance, DebtFolio has a deal with the Newton, Mass., loan broker Simple Tuition Inc. to offer student-loan comparison shopping on the Geezeo Web site. “We can show you all 40 banks you can choose from,” Mr. Ward said. “And then we’re going to bring in the social aspects, so they can rate your products.”

DebtFolio also plans to let card issuers market their accounts to consumers who manage their debts on the Geezeo site, he said.

The fledgling company is marketing its services now on nine college campuses, mostly in the Northeast, using sites such as Facebook to attract users to its personal finance site. Mr. Glyman said DebtFolio will seek “niche industry experts” to lead online discussion groups on financial issues relevant to young people, such as 529 college savings accounts.

It also plans to take advantage of Web 2.0 collaboration tools, using “smart tags” on aggregated transaction data, Mr. Glyman said. “As more people use Geezeo, the tagging gets smarter.”

Mr. Ward said DebtFolio is starting with mobile account aggregation to build a community of college students and recent graduates.

“Mobile is all about convenience,” Mr. Ward said. “Long term, we have much more ambitious plans.”