Starting in the spring of 2010, customers of Canada's Scotiabank will be able to use their smart phones to perform banking transactions by way of text messages, and they'll be using a platform provided by Auckland-based mobile developer M-Com. Available for individual and small business account holders, the service is supported by, and tailored for, all types of smart phones and browsers, said Mike Henry, senior vice-president sales and service with Scotiabank. "If you've got a power device like an iPhone, a BlackBerry Bold or Storm then we'll have specific downloadable apps customised for the power devices," said Henry. The service provides account holders the option to perform certain transactions by sending an SMS code along with a brief text command like "BAL ALL" if they want to view all their account balances. Scotiabank's mobile banking service is supported by a technology platform from M-Com, a New Zealand-based mobile banking and payments technology provider. Adam Clark, CEO of M-Com, said that while Gen Y users are typically the target market for mobile banking, there are other groups as well. In the US, for instance, the average age of mobile banking users is 42, Clark noted. The more affluent users who are always "out and about and they have a smart phone" are a target audience, as well as blue collar workers who don't typically work in front of a PC. But the smart phone is a natural place to which to send banking alerts, said Clark. "It's much more interrupting. As an email you might not get it until you check your email that evening or in the morning," he said. The SMS and text approach appeals to all demographic groups because of its ease of use, he said. "You've always got your phone with you. You haven't always got your PC in front of you." Acknowledging that security concerns is one of the biggest impediments to users adopting services, Clark said transactions on the platform are secure due to a mix of mechanisms including two-factor authentication and 128-bit SSL. Henry said the security guarantee that account holders receive online will be extended to the mobile service. Things like account name and numbers will also be masked to prevent identification and reuse by an imposter. And, depending on the sensitivity and the amount of money involved in the transaction, second- or third-factor authentication will apply. The mobile interface will be condensed and simpler to ensure it is legible and navigation is easy. From the user's perspective, mobile banking will be a lot like online in terms of being able to do things like access account balances and transaction histories and pay bills, said Henry. Scotiabank is hoping to capitalise on the fact that there are 22 million handsets in Canada. More than half of phone connections are wireless and the adoption of smart phones is growing, said Henry. "On that basis there is going to be a lot of latent demand out there that will cut across all consumer groups," he said. That said, Henry acknowledges that early adopters will likely be the younger crowd and business owners. Clark said that while mobile banking is in its infant stages in Canada, that's not the case in other parts of the world, like Asia-Pacific and Africa, where more sophisticated mobile payment options are available. But as momentum builds in Canada through a service like that of Scotiabank, Clark said mobile banking will eventually witness the addition of more services, greater customer engagement, and cross-selling as the mobile channel becomes a way to drive down costs. According to Rob Burbach, senior analyst with Toronto-based IDC Canada, while there is a large pool of active handsets in Canada, that doesn't mean everyone is looking for a mobile banking service. That said, Burbach thinks the other major banks can be expected to make some noise with mobile initiatives of their own. And, although Scotiabank's mobile service payment options are relatively basic compared to other parts of the world, Burbach said it will still hold appeal to some. "It comes to how comfortable are you using your mobile phone for your various functions?" he said. Scotiabank's service will undergo a soft launch prior to going live.