Bank of Montreal has closed its mBanking service in Canada and cut it back in the US.
Bank of Montreal, which launched Veev, the first wireless financial services package in North America in 1999, will now withdraw its mobile banking offering for retail customers across North America and online brokerage customers in Canada. It hopes to begin winding these services down in August. For now, it will keep wireless access for eBrokerage customers in the US.
The announcement mirrors a spate of recent mBanking cancellations and postponements on both sides of the Atlantic. Currently only 40% of financial services institutions in the US offer retail mBanking services, and UK players such as Egg, HSBC and NatWest have shelved their mBanking initiatives or failed to advance them beyond pilots. Only the Nordic markets have yet shown any demonstrable growth in mBanking services.
As financial services institutions worldwide focus on cost control and demonstrable ROI, it is hardly surprising that they are no longer interested in a technology that looks like one of the last vestiges of the dotcom boom – particularly given that 3G services in Europe and North America have yet to materialize.
Datamonitor’s recent IMPACT survey of the European market showed that, in the six countries surveyed, only between 2% and 6% of consumers planned to use their mobile phones for banking or broking in the near future. In the face of such consumer apathy, mobile banking solutions currently do not present a compelling investment case.
As a result, mBanking solution providers must rethink the whole viability of their approach to the market. A key example is 724 Solutions, the Canadian company which backed BOM’s wireless offering. 724 has struggled to maintain momentum due to its pure wireless financial services focus, as reflected in its financial performance in 2001. The cancellation of this key deal leaves the viability of the company’s approach more open to question than ever before.
Related research: Datamonitor, New Channels in European FS 2002 (DMFS1468)
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