Albertans could soon be checking their bank balances with a text message as the province’s largest home-grown financial institution is set to roll out a mobile banking service.
Edmonton-based ATB Financial will be allowing customers to view account balances, see recent transactions, and even transfer funds between accounts via SMS. Almost any mobile phone will be compatible with the system, which will eventually offer SMS, Web-based access, and access through a mobile application.
ATB is partnering with Calgary-based Telus Corp. to rollout a pilot project in the Spring. After 90 days, the service will be extended to all ATB customers.
The SMS interaction will be the first step for the bank, according to Ismail Pishori, vice-president of financial services at Telus.
“Rather than bounce a cheque and pay the penalty, you could get a message asking you if you want to transfer some funds to cover the cheque,” he says. “Or you may be at dinner when you get a call from your daughter asking for a loan…rather than running home to do that, you can do it from the restaurant.”
ATB, a provincial crown corporation, will be relying on existing systems that already process online and telephone banking requests. Customers will not be required to download any software to their phones to access the SMS service. Instead, the service makes use of the features already on the phone and built into Telus’ CDMA network infrastructure.
The method used by the bank to authenticate users is yet to be finalized, but using SMS to access an account is a safe method, according to Rob Burbach, senior analyst of financial insights at IDC Canada.
“From my point of view, it’s secure,” he says. “It’s probably safer than doing your banking transactions over a cordless phone.”
Cordless phone conversations don’t tend to be encrypted, the Toronto-based analyst explains. That means a third party with the right scanning equipment could pick up your conversation and overhear all that banking information being passed on. But encryption algorithms are built into SMS on both CDMA and GSM networks, the two available in Canada.
Using software from Novato, Calif.-based ClairMail, user data is encrypted both while in transit and at rest. So the data travels securely between the phone, the cell tower, and the bank, and then is stored securely.
Authentication could also involve a prompt for the users’ PIN and a password, Pishori says. If the user requests a major transaction, then a bank agent may even phone the person to confirm their identity.
ATB isn’t the first Canadian bank to offer SMS access to an account. But it’s reportedly the first to offer such a range of functionality – actual transactions as opposed to just checking in on your bank balance.
“This is the first time that a smaller bank is taking a run at it,” Burbach says.
Although the service is aimed at the consumer market, ATB has 660,000 customers and aspects of the service will be appreciated by entrepreneurs, Pishori says. Small businesses, he predicts, will likely be the early adopters of the service. “Imagine a contractor on site who needs to transfer money to the payroll account.”
An alerts service will also be available through SMS. Customers could set it up so they’re alterted if their bank account dips to a certain level, for example.
“For medium-sized organizations, maybe the VP of finance might want to set up some alerts to make sure the cash is being managed properly,” Pishori says.
Entrepreneurs typically are looking to make the best use of their time possible, Burbach says. The busy lifestyle of a start-up business operator doesn’t leave a lot of time to sit down and count the pennies. Quickly checking in with SMS will be a convenient way to get things done.
“This is going to be a godsend for business accounts,” the analyst says. “The small business crowd will see the value of this quite quickly.”
There are more than 20 million mobile phone subscriptions in Canada. Canadians are also keen on sending text messages, exchanging an average of 63.7 million text messages per day, according to the Canadian Wireless Telecommunications Association.
No ATB spokesperson was available for an interview at time of publication.