Mobile banking company Clairmail Inc. made public its first deal with a bank last week, announcing that California-based Bank of Stockton will use the company’s platform. Clairmail’s system relies on text messaging to make mobile banking transactions available to the broadest possible swath of a financial institution’s customers.
The company has taken a different approach than the downloadable application model for mobile banking solutions used by companies such as Firethorn Holdings L.L.C., and emphasizes the opportunities with two-way communication that text messaging offers, as well as the fact that it can be used with virtually every handset regardless of carrier.
“We believe there will be multiple flavors [of mobile banking options] out in the market,” said David Thompson, VP of marketing for Clairmail. He added that the company also “believes really strongly that for this to really take off . you really have to make it available to a lot of people so you can start to get the uptake and people are going to get used to it, and a viral effect is going to take place.”
Measured growth
Several recent reports from Javelin Strategy & Research on mobile banking concluded that financial institutions “should prepare for measured, rather than widespread and immediate, adoption” and that “mobile banking and payments will grow as banks design products based on consumers’ mobile needs for simplicity and immediacy while educating end users to curtail perceived risk factors.” A survey of more than 2,200 online consumers found that 49% of them believed that mobile banking wasn’t secure.
“Institutions must proactively address the perceived security flaws while unflinchingly touting the relative safety advantages” of mobile banking, Javelin said.
Some of the services that Clairmail will enable for Bank of Stockton include checking account information, checking transaction history, transferring funds, paying bills and receiving alerts such as low balances or check overdrafts. The service also will include “no hold” customer service, in which a customer text messages a short code to the bank and then is essentially given a spot in the queue of customers waiting to speak to agents. The user receives a message back with an estimate of how long the customer care call wait-time is (and therefore how many minutes they should expect to pass before receiving a call from an agent).
Douglass Eberhardt, president and CEO of Bank of Stockton, said in a statement that the bank went with Clairmail because it offered “the most complete, secure and easy-to-use mobile banking solution with no downloads required, making widespread adoption among all of our mobile customers-not just those possessing a specific phone model or affiliated with a particular carrier-fast and expedient.”
Thompson said that the announcement with Bank of Stockton was “the first of a number that we have in the cue to get out there” and that more would be forthcoming in the next couple of quarters. The company had earlier announced that it was working with Canadian carrier Telus to help enable mobile banking in that country.
Privately held Bank of Stockton has a total of 16 branches in California and operates in Central valley cities including Stockton, Lodi, Tracy and Modesto.
