Nokia mobile phones break into the bank
By Ben Charny
Special to CNET News.com
March 27, 2001, 3:55 p.m. PT
The world's leading handset maker has joined the rush into mobile banking.
Nokia's networks division said Tuesday that it has developed new software to enable people to
conduct banking transactions on mobile phones, and the company is peddling the software to
banks and financial institutions.
Mobile banking would let customers access account information, conduct withdrawals, and
transfer money using handheld devices. Wireless service providers are offering such services
as a way to lure new customers, keep old ones, and even boost handset sales.
Pressure is on handset makers to find more income sources because nearly every player in
the industry is feeling the slowdown in sales. On Tuesday, Nokia said slowing handset sales is
forcing it to cut 400 jobs.
The telecommunications slowdown hasn't spared Motorola, which has fired thousands of
employees, or No. 2 handset maker Ericsson, which said Tuesday it would cut costs by nearly
$2 billion by the end of next year.
But analysts aren't sure whether mobile banking applications are the answer to
telecommunication woes.
Carsten Schmidt, a Forrester Research analyst, thinks there won't be such a large uptake by
corporations, mostly because companies need time to decide which of the growing number of
services works best for them and to poke and prod the systems for any unseen security holes.
But it may, at least, help banks keep the customers they already have, said Jupiter Research
senior analyst James Van Dyke.
To help bolster its new software, Nokia Networks also recently announced a partnership with
724 Solutions. 724 is already working with many of Europe's largest financial institutions to
create mobile digital signatures and other wireless banking needs.
The deal with 724 Solutions lets Nokia offer some services that the other wireless banking
software packages either don't offer or don't do in quantity such as "large-scale funds transfers,
loan and mortgage agreements and credit card applications," said Jukka Riivari, director of
sales and marketing at Nokia.
Nokia's banking aspirations were made public about a week after Nokia executives said they
expect the networks division to become the No. 1 high-speed, third-generation phone network
provider in the world.
Carriers are expected to begin offering the service next year, although NTT DoCoMo in Japan
plans to launch a service next month.
Nokia is also getting into a race that seems to be halfway over, especially in Europe where
wireless banking is widespread. The United States is largely an untapped market, however.
Last summer, a Chicago subsidiary of the Bank of Montreal became the first bank to offer U.S.
customers wireless banking, followed by Wells Fargo. Since then, at least five other U.S.
banks have offered up the same type of services, including Citigroup, the Bank of America and
Wachovia.
Cingular Wireless is also working with 724 Solutions to bring wireless banking to its
subscribers. A spokesman wouldn't say when the service would be introduced. |
