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Monday, August 24, 2009

Tripp Rackley (Firethorn) on Mobile Banking and Mobile Commerce

Today I'm excited to publish the notes from my interview with Tripp Rackley, CEO - Firethorn. To learn more about Tripp visit the Firethorn website.

Q: What’s your differentiator? What sets your mobile banking solution apart from the competition?

A: A few years ago all mobile banking vendors were lumped into one category, but many of the companies that the industry would consider as Firethorn’s competitors have mobile platforms that can accommodate only account servicing (balances). Firethorn was not formed to service accounts – we are not trying to replicate internet banking on the phone. The focus needs to be on mcommerce and payments.

From a banking perspective it comes down to just 2 things:
1. Great distribution across ATT & Verizon, the two largest wireless carriers.
2. Scale to support all operating systems. Android doesn’t have mass adoption yet but Firethorn has already built the platform.

Q: Who are your key clients?

A: Synovus, BancorpSouth, Arvest, America First, USAA, CitiCards, SDCCU, BECU, Wachovia, SunTrust, Regions

Q: Who are your key partners?

A: AT&T, Verizon Wireless, CellularSouth, CheckFree, FundTech, FTPS (Fifth-Third Processing Solutions), Mastercard

Q: Budget season is just around the corner, and the #1 question bankers want to ask is – What’s it going to cost me?

A: The key to success is – don’t limit it to mobile banking. This is a path to mobile commerce until consumers can access all of the brands they want, with the phone they have, through the channel they prefer.

Mobile will not have the same ROI as online banking until there is scale, but this is coming. Initially, clients will use mobile in addition to the existing channels, but in time these will become “replacement transactions” that will extract expense from the system.

Understanding cost is important, but the real cost is in people and support. The ROI play today is to capture customers with mobile that did not adopt online banking. This is where handset enrollment comes into play and could be substantial for an FI.

Q: What components of your ROI model have begun to materialize?

A: There’s only ROI where you can change the consumer behavior – promote mobile over a more expensive channel.

All major brands need mobile. If you choose to ignore mobile it would be like saying, “we’re not going to embrace the internet,” or even worse because mobile is so much more prevalent.

Q: What do the demographics of your users look like?

A: Our users are more demographically focused than handset focused and match the general industry data of 18 to 35.

Q: What do the usage patterns look like? Balance, History, Transfers, BP, Locator?

A: Firethorn is very pleased with the usage trends.
• Avg. logins of 4-5/week
• Avg. 3 transfers/month
• Avg. 2 bill payments/month

Q: What security elements are incorporated into your application?

A: Security should be prevalent to the consumer but easy to use, and all heavy security should be hidden. It’s about the form factor. With an ATM the client uses a PIN. It would be inappropriate to ask for an online banking password at the ATM.

Yet, some FIs want the mobile banking password to match the online banking password. This is not appropriate – the form factor isn’t right. It’s wrong to approach mobile as an extension of the online banking.

Q: How likely are biometrics to become a component?

A: I spent time looking at biometics before starting Firethorn, but it was just too early. There’s a heavy fear of biometrics, and the domestic devices are not equipped with the necessary hardware.

Q: How has the iPhone changed your approach to the business?

A: The iPhone has had a major emotional impact on the industry and has brought about “freedom” for all smart devices. The iPhone is an exceptional device that is beautifully designed and very successful, but it doesn’t cover the mass market. Some institutions have reacted with just an iPhone application or just a Blackberry application, but you need to offer what the market demands. You must address them all. You can not pick just one.

Q: What has been your biggest surprise/lesson-learned over the last couple of years?

A: Going into 2010 mobility should not be a question – it’s a must have. You can not pick just one mobile channel as a strategy. You must address consumers the way they want to be addressed.

Q: What big industry development should we expect within the next 12 months?

A: NFC still has a long time to go. There will be implementations of NFC but still in trial environments. I’m “bullish” on mobile commerce.

Additionally, Firethorn has invested heavily in research to confirm what consumers really want and need; this helps shape our product and also helps our partners better market to their key audience with the right message.

Q: What can banks do a better job of to facilitate adoption?

A: You must get mobile in front of the customers. Incorporate mobile into all of your existing media: banner ads, radio, print.

This craze is similar to the beginning of the internet. This is the time to capture customers. There are people purchasing a device, walking out of the store, and then sitting down and looking for things to do with it. It’s phenomenal!

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