MOBILE BANKER SCAN

Mobile Banker Scan
A bi-weekly roundup of news and developments in mobile banking and their impact on the financial services industry.

Mobile Insecurity: Reality Or Hype?
While mobile-banking capabilities and fraudster sophistication is increasing, industry watchers disagree about the seriousness of mobile-banking security threats.
Spyware is becoming increasingly prevalent on cell phones, and hackers are financially motivated to make the programs silent, stealthy and efficient so users will not even know they are there, according to Dan Hoffman, chief technology officer with SMobile Security, a Columbus, Ohio-based software vendor. “People truly aren't realizing the threats today," says Hoffman. “Banks haven’t imposed security measures because they haven’t accepted the fact that they have a significant risk and a significant liability.”
At some point, however, plugging security holes on devices becomes more trouble than it’s worth. With multi-factor authentication in place and combined with back-end fraud detection systems, the losses due to mobile fraud may not be high enough to warrant more intrusive security measures. “Banks want uptake at this point in time,” says Nick Holland, an analyst with Boston-based Aite Group. “They don't want to be scaring people. They absolutely do not want to start telling people that the sky is falling. In most cases, mobile banking is very, very safe.”
Fiserv Teams With M-Com
Mobile Commerce Ltd., a New Zealand mobile-banking and payments player known as M-Com, is gaining ground in the United States. Fiserv Inc. chose the company, which had earlier this year migrated sales and marketing executives to Atlanta and landed its first U.S. platform client in Washington Mutual, as its partner to build out the Fiserv Mobile Money mobile-banking platform.
Brookfield, Wis.-based Fiserv launched Mobile Money to be used on SMS/text, browser or downloadable-application platforms. Fiserv and M-Com already are teaming at Fiserv’s Norcross, Ga.-based campus to start work on the next-generation platform.
The M-Com/Fiserv partnership is par for the course for mobile-banking partnerships: Companies select vendors with multiple ways to gain consumer adoption and bridge to mobile payments as a way to access a critical mass of client institutions. M-Com/Fiserv follows the example of mFoundry’s partnership with Fidelity National Information Services; Qualcomm Firethorn Technologies’ link to Fifth Third Processing Solutions; and Monitise forming a mobile banking joint venture with Metavante.
MasterCard Touts New Service To Put Paypass On NFC Phones
MasterCard Worldwide recently announced the launch of an over-the-air provisioning service, which the card company says will make it easier for issuers and consumers to set up MasterCard’s PayPass contactless-payment application on mobile phones. Although most observers agree rollouts of mobile payment using Near Field Communication technology likely will not happen until 2010, MasterCard is promoting the new service as a way for issuers “to move more aggressively into the mobile-payments space.”
The service would enable issuers to put the PayPass application onto NFC phones in a “reduced timeframe.” Consumers could then tap their phones on the same terminals that accept PayPass contactless cards.
The service would allow banks to avoid dealing directly with companies called “trusted service managers,” or TSMs, that will do the actual downloads and personalization of the payment application. “The way it works, a bank would connect into us for these provisioning transactions,” says James Anderson, vice president for product development at MasterCard's mobile center of excellence. “We'll do a certain amount of work, and we're going to route it to individual TSMs. From the bank's perspective, we're aggregating all these TSMs, so the banks don't have to worry about which specific TSM is going to deliver a customer's credential to their phones,” Anderson says.