September 24, 2007 - Mobile Banking Innovation Brings The Bank of Oswego National Attention,
But the Real News is for Local Customers

By: Linda Horowitz
There’s a different kind of mobile banking coming to Lake Oswego that has nothing to do with the silver Bank of Oswego Honda Element you may have seen around the community. Thanks to The Bank of Oswego’s forward thinking CEO, Dan Heine, and the bank’s relationship with Tyfone, Inc., the Portland-based developer of a mobile financial services hardware and software platform, The Bank of Oswego customers will be able to securely dial into the bank to receive information on balances, pay bills, transfer funds, even receive electronic coupons at the point of sale -- all from their mobile phones. THAT’S mobile banking! And it is putting Lake Oswego’s locally-owned and managed community bank on the national map.

“Offering mobile financial services with Tyfone’s platform adds value to our customer relationships,” notes Dan Heine. “That was key to the decision to adopt the mobile channel. This led to our national coverage in the community banking and financial press as an early adopter of this new technology, particularly Tyfone’s Merchant Relationship Services.”

Tom Spitzer, chief executive officer of Tyfone, Inc., adds, “The bank’s customer base of individuals and local merchants is a great fit not only for mobile banking but for our Merchant Relationship Services product. This is why Dan, with his entrepreneurial spirit and his bank’s connection to the community, became our first client.”

“As a bank and a member of the community, we must first and foremost look to the needs of our customers, most of whom we know by name,” explains Diana Yates, executive vice president and chief financial officer. “Whether our customer is a soccer mom or managing a restaurant here in town, even in Lake Oswego, people are on the go. We want to make banking and payments easy for them, and mobile technology expands the 24/7 convenience and speed of the Internet to ANYWHERE and any time.”

Tyfone developed a complete, bank-centric platform including mobile banking, mobile contactless payments, and Merchant Relationship Services in its product suite, something few, if any technology vendors can offer, much less offer to a small community bank. Guru Sankar, Tyfone’s chief financial officer and a Lake Oswego resident for ten years, explains, “After meeting with a diverse set of banks across the U.S., it became clear that each bank knows its customers and needs to individually communicate its brand and choose specific services and unique messages. That’s why Tyfone developed a bank-centric model, so that the bank owns the mobile channel and the delivery to its customers. In addition,” Guru continues, “Tyfone’s goal was to ensure the bank implementation was straight forward. Considering those needs, we created flexible software and hardware that adapts to each bank, down to the business line level, and plugs into the bank’s current core and Internet banking systems, all from one platform.”

Tom comments, “Our platform design addresses the concerns of all of the players, from the IT and systems managers to the senior managers looking at the bottom line. It consists of modules and is independent of mobile carriers, providing banks with the lowest total cost of ownership as a result.”

Mobile banking is a natural progression from Internet banking for consumers and small businesses. Financial industry research group, Celent, forecasts a 35% mobile adoption rate by Internet users by the year 2010, only two and a half years from now. However, when Dan talks about this exciting new technology and what it can offer, his customers get a noticeably glazed or quizzical look on their faces. That’s because it is so new, the average consumer in the U.S. may not have even heard of mobile banking, and contactless payments are a completely foreign concept.

If like most people here in the U.S., mobile banking is new to you, here is a short primer:

Mobile banking is like banking online or using an ATM but without the cash. Most of the functions used in the other banking formats are available via your mobile phone, where ever YOU are, when ever you want the information or need to make a transaction. Information includes account balances to make a purchase decision in the store, and see whether checks have cleared. Mobile customers can transfer funds from one account to another when a college kid needs additional pizza money or to ensure funds are available to prevent overdraft charges. You can get an alert that a bill is due and you need to pay it -- and you can do so waiting in line at the grocery or at a restaurant before desert arrives. You can even to find an ATM, when you absolutely must have cash.

How does it work? Mobile banking uses cell phone technology for communications, and the messages, information, or transactions go to the bank, into the bank’s server, or in reverse, from the server to the customer’s phone.

Is it secure? Yes. Tyfone’s industry-leading, patented technologies, enables communication and transfer of information securely from end-to-end, as secure or more than online banking. The bank’s server identifies and authenticates the customer and all messages both to and from the bank are encrypted. Tyfone created security that exceeds federal regulation standards.

What if I lose my phone? Doesn’t it have all of my account information? No. There is no information whatsoever IN the phone. It’s at the bank, where it should be. Like an ATM, a customer has a PIN number to activate the account from a mobile phone, but every communication is authenticated by the bank.

How does it get onto my phone? For Tyfone’s initial rollout, the bank will send a text message with the http link to download the application on to the phone. The customer clicks on the link, and the mobile banking application downloads and installs. If a bank chooses, similar to a debit or credit card, it will issue a memory card to customers who have phones with slots. The customers insert the memory card and download the software onto the phone.

Will my phone bills increase? There are a couple of variables involved. First, it depends on the mobile plan and how many minutes you use of that plan. Second, the expense will be contingent on the time spent using the mobile banking service. The user, however, does pay for the data or SMS text messaging communications to the phone. Tyfone’s technology increased the speed of communications, with response times 2 to 4 seconds on average, much faster than other providers.

Will it work on a phone without a keyboard and data service? Tyfone’s product is completely flexible and the communications method is driven by the individual consumer. With Tyfone’s mobile banking software, functions can be communicated with any type of service or phone. Some banks are choosing to use SMS (text messaging) which is available on phones with or without actual keyboards.

What is a contactless payment? The consumer uses the mobile phone as a credit or debit card to pay for an invoice at the point of sale. Instead of swiping the card, taking the paper, signing it, handing it back to the sales person and getting a receipt, the consumer simply waves his mobile phone past the merchant’s terminal to authorize payment by his bank’s debit or credit card account.

If the underlying technology interests you, Tyfone’s Chief Technology Officer, Dr. Siva Narendra, not only knows it, but has deep expertise in this and other related technologies. He has a PhD. in electrical engineering from the Massachusetts Institute of Technology and has published numerous academic papers. In addition, Siva has over than 50 registered patents and another 50 more pending, many helping Tyfone become an industry leader. Since he is also an adjunct faculty member at Portland State University and Oregon State University, he generously provides technology lessons, even for beginners. A glossary with definitions of cellular and mobile terms are in the box on page X.

A study by the Independent Community Bankers Association and the Aite Group found that among small businesses, those with revenue in the range of $100,000 to $1 million, were the most likely to pay bills, manage cash, and send invoices online. The Internet is their preferred channel for interacting with their banks. [6/12/07 American Banker] Aite Group forecasts that the number of active mobile banking users in the U.S. will reach 1.6 million by the end of 2007, rising to 35 million users by 2010 [ 9/07/07].

“Tyfone recognized the cost savings for financial institutions adopting the mobile channel through increased electronic banking and payments, but there is enormous marketing potential for banks inherent in mobile technology as well,” Tom explains. “By using bank-owned consumer data, Tyfone developed predictive analytics to create our Merchant Relationship Services product.”

Tyfone’s Merchant Relationship Services helps The Bank of Oswego connect merchants and customers by orchestrating loyalty programs and incentives via silent, SPAM-free offers to customers’ mobile phones. Bank consumers who opt-in select from a list of the program’s merchants who create offers based upon their business needs. For example, if Oswego Shoes needed to boost sales at the end of January, an electronic offer can be sent indicating a 15% discount on any shoes purchased between January 15 and January 31. Offers can target an even more narrow time or product, such as a discount on any bread item at a particular market if purchased on October 12 between 7:30 PM and 9:00 PM. Consumers retrieve the electronic coupons at their convenience, even at the market’s check-out counter.

Tyfone’s innovative Merchant Relationship Services is a win/win for all of the participants. It drives revenue for merchants, savings for consumers, and increases bank transactions and deposits. And because the communications are electronic, merchants do not have the often burdensome expense for creating the coupon and the additional postage for snail mail, making direct marketing prohibitive for some. In addition, the program’s results are fast and offers revised quickly to be more appealing and relevant and thus, more successful.

Dan adds one final note, “It’s great that our small, local bank received national news coverage, but the real excitement comes from growing our business because we provided our customers with value.”

The Bank of Oswego is a full-service bank with two full-service locations in Lake Oswego. It serves businesses, individuals, entrepreneurs, women in business, and the mature market through: complete lending and deposit services; a mobile branch courier service; online banking; complimentary ATM usage; complimentary access to a “community room” for meetings; and an “At Your Service” Concierge, who will provide expertise on local attractions, information about local events, and assistance with special arrangements. Website is:

Dan Heine, President & CEO 503.445.3121
Diana Yates, EVP & CFO 503.445.3124

Tyfone Inc. is a developer of a bank-centric software and hardware platform for bank-branded mobile financial services. The company provides solutions for secure two-way communications for mobile banking, mobile contactless payments, and merchant relationship services to banks and financial institutions. Tyfone’s platform is independent of mobile operator and works with the majority of handsets so bank customers have secure mobile services offered by their bank without the concern of mobile network they use or handset model they currently own. Founded in 2004, the company is headquartered in Portland, Oregon, with a staff of 23 research and development engineers in Bangalore, India, a sales representative in China, and manufacturing outsourced to Taiwan. Website is:

Tom Spitzer, CEO 503.226.3939
Linda Horowitz, Public Relations Manager 626.445.4527

Glossary of Cellular, Mobile, and Wireless Industry Terms


Authentication Actual time spent talking on the cellular telephone. Most carriers bill customers based on how many minutes of airtime they use each month. Airtime charges during peak periods of the day vary from about 20 cents to more than 40 cents per minute, depending on the service plan selected. Most carriers offer reduced rates for off-peak usage.

The verification process to assure that a wireless device and its user are compatible with and authorized to access a wireless network. This process is accomplished through transmission of identifying data at the time of connection. Used for fraud prevention.
Bandwidth The capacity of a telecom line to carry signals. A greater bandwidth indicates the ability to transmit a greater amount of data over a given period of time.
Bluetooth Wireless personal area network (PAN) standard that enables data connections between electronic devices such as desktop computers, wireless phones, electronic organizers and printers in the 2.4 GHz range at 720kbps within a 30-foot range. Bluetooth depends on mobile devices equipped with a chip for sending and receiving information.
Broadband Describes a communications medium capable of transmitting a relatively large amount of data over a given period of time. A descriptive term for evolving digital technologies that offers integrated access to voice, high-speed data service, video-demand services, and interactive delivery services.
Cell The basic geographic unit of a cellular system. Also, the basis for the generic industry term: "cellular." A city or county is divided into smaller "cells," each of which is equipped with a low-powered radio transmitter/receiver. The cells can vary in size depending upon terrain, capacity demands, etc. By controlling the transmission power, the radio frequencies assigned to one cell can be limited to the boundaries of that cell. When a wireless phone moves from one cell toward another, a computer at the Mobile Telephone Switching Office (MTSO) monitors the movement and at the proper time, transfers or hands off the phone call to the new cell and another radio frequency. The handoff is performed so quickly that it is not noticeable to the callers.
Code Division Multiple Access (CDMA) An air interface technology that was developed by the U.S. military. CDMA assigns a code to all speech bits, sends a scrambled transmission of the encoded speech over the air and reassembles the speech to its original form at the other end. CDMA supports SMS with a message length of 120 characters. With CDMA, each conversation is digitized and then tagged with a code. The mobile phone receives a signal to locate that particular code and it then deciphers the conversation off the airwaves. It codes each conversation expanding it 128 times, making it easy to decipher at the receiving end.
Encryption The process of encoding a message such as a digital phone signal to prevent it from being read by unauthorized parties.
Global System for Mobile Communications (GSM)

Hot Spot GSM is a digital cellular phone technology based on TDMA that is the predominant system Europe, the Middle East, Africa, Asia and in parts of America and Canada. First introduced in 1991, the GSM is primarily deployed in North America. Named after its frequency band around 900 MHz, GSM-900, it has provided the basis for several other networks using GSM technology.

A hotspot is a public location such as an airport, coffee shop, or conference center that has readily accessible wireless networks, usually using 802.11b or 802.11a.
Land Line Traditional wired phone service. Voice, video and data transmission technology that relies on wires. Also called wireline.
Near Field Communication (NFC)

Over-The-Air Service Provisioning (OTASP) NFC is a standards-based, short-range wireless connectivity technology that enables convenient short-range communication between electronic devices.

The ability of carriers to add new types of services to a customer's handset by using the wireless network instead of requiring the customer to bring the phone to a carrier's location for reprogramming.
Pull SMS The ability to request services (e.g. ringtones or games) from a wireless handset via Wireless Internet. The service requested is sent back to the handset via SMS.
Push SMS The ability to request services (e.g. ringtones or games) from a wireless handset via sending a preset SMS code to a predetermined number. The service requested is sent back to the handset via SMS.
Radio Frequency (RF) The spectrum of electromagnetic energy between audio and light: 500 KHz to 300 GHz.
Radio Waves

RFID Electromagnetic energy with frequencies in the 3000 hertz (3 kHz) to 300 billion Hertz (300 GHz) portion of the electromagnetic spectrum.

Radio Frequency Identification, RFID, is a technology used to uniquely identify objects. A transceiver (i.e. highway toll booth) sends out a signal that activates a transponder (tag installed in a car) which sends data back to the transreceiver (that car has paid the toll).
Roaming The ability to use your cellular phone outside your usual service area – when traveling outside of the "home" service area defined by a service provider. Higher per-minute rates are usually charged for calls made or received while roaming. Long distance rates and a daily access fee may also apply.
Short Message Service (SMS) The transmission of short alphanumeric text-messages to and from a mobile phone, fax machine and/or IP address. Messages must be no longer than 160 alphanumeric characters and contain no images or graphics. Once a message is sent, it is received by a Short Message Service Center (SMSC), which must then get it to the appropriate mobile device.

SIM Card
A small printed circuit board that must be inserted in any GSM-based mobile phone when signing on as a subscriber. It contains subscriber details, security information and memory for a personal directory of numbers. The card can be a small plug-in type or sized as a credit-card but has the same functionality. The SIM card also stores data that identifies the caller to the network service provider.
Smart Card A plastic card containing important data about a person's identity to allow access to a network or premises. Also, a card containing subscriber information, often inserted into GSM phones for roaming in different countries.
Smart Phone A class of wireless phone handsets with many features, and often a keyboard. What makes the phone "smart" is its ability to handle data, not only voice calls.
Space Division Multiple Access (SDMA) A variation of TDMA and CDMA that potentially will be used in high-bandwidth, third-generation wireless products.
Subscriber Identity Module (SIM) A card inserted into a GSM/TDMA or GSM-only handset containing subscriber-related data. The card contains 18 digits for GSM markets and 20 digits for TDMA markets.
Transmission Control Protocol/Internet Protocol (TCP/IP)

Telecommunications Transmission Control Protocol/Internet Protocol (TCP/IP) Transmission Control Protocol / Internet Protocol: Internet protocol suite developed by the US Department of Defense in the 1970s. TCP governs the exchange of sequential data. IP routes outgoing and recognizes incoming messages.

The transmission of words, sounds, or images, usually over great distances, in the form of electromagnetic energy, for example by telegraph, telephone, radio, or television.
Time Division Multiple Access (TDMA) A method of digital wireless communications transmission allowing a large number of users to access a single radio-frequency channel without interference. Each user is given a unique time slot within each channel. SMS Mobile Originate has now gone live on several TDMA networks around the world including. Other TDMA network operators such as AT&T Wireless in the U.S. have launched SMS nationally.
Voice Over Internet Protocol (VoIP)

Wavelength VoIP is a category of hardware and software that enables people to use the Internet as the transmission medium for telephone calls by sending voice data in packets using Internet Protocol rather than by traditional circuit transmissions. One advantage of VoIP is that the telephone calls over the Internet do not incur a surcharge beyond what the user is paying for Internet access, similar to not being charged for sending individual e-mails over the Internet.

The distance covered by one cycle of a wave.

Wireless Application Protocol (WAP)

Wireless Local Area Network (WLAN) A wireless data networking protocol generally used to connect PCs and laptops to a network. It is also known as WLAN (Wireless Local Area Network), and is the most common means of wireless networking.

An open standard for communication between handsets and the Internet. WAP is a wireless communications environment for delivering web data to wireless terminals with minimal screen display. WAP strips all but graphics for display on small screens, such as mobile phones. A mini-browser is an integral part of WAP enabled phones. WAP enabled phones first appeared in Europe at the end of 1999.

A Local Area Network using wireless transmissions, such as radio or infrared instead of phone lines or fiber-optic cable to connect data devices and to transmit network messages through the air for relatively short distances such as an office building.