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Aug. 20, 2008

ClairMail, a new startup company in the mobile banking sector, is developing several new applications and anticipates receiving additional venture funding soon.

ClairMail fills what’s known as a triple-play in mobile banking, which is the combination of banks interacting with end users through client device software, text messaging and Web sites.

ClairMail is announcing Alerus Financial as its newest customer. Alerus spokeswoman Missy Keney said hers is the first financial services company in the Midwest to offer such a service, will not charge its customers any fees for the service, will not send any account numbers or passwords and will not send any advertising or spam.

ClairMail’s software is in its 3.0 generation and works with any phone on any network that supports text messaging.

Version 4.0 is due by the end of 2008 and will include languages other than English and support for international currencies as well, Madams said.

He also said the company is preparing Mobile Lockbox, for storing mobile alerts and payment information but not necessarily for banks, which is also due later in the year.

In 2009, product launches will include Credit-on-Card for mobile coupons and discounts, plus Peer-to-Peer Payments, which is an online payment system similar to PayPal but designed for banks to offer directly to customers.

Text messages never include account numbers or passwords, although a phone thief could assume that any financial data found in messages belongs to the identity of the phone’s owner. Ultimately the bank sending the message and the consumers directly need to stay educated and act responsibly.

The biggest problem ClairMail faces for all of its products is the perception of insecurity. How do customers feel about having data sent through mobile phones, where messages can be intercepted and hardware can be lost or stolen?

Banks send an identification number to the phone, which users must manually enter into a browser to verify that they requested such communications. For the actual content messages, “Certainly security and spoofing and phishing are the big challenges to mobile banking. I don’t like SMS because it’s not encrypted but I do like it because you can’t spoof a short code,” noted Mark Schwanhausser, an analyst at Javelin Strategy & Research.

“The security challenges are pretty steep but they’re addressable. The reality is people read this mobile device as a very personal thing. It’s with them all the time and they expect to do everything with it. I actually find the consumers pushing the banks,” he added.

“The holy grail is, if only we could have a real digital certificate in the phone,” not unlike the hardware methods GSM phones already use to be identified by towers.

Schwanhausser studied ClairMail and 12 competitors in his report this month, “Mobile Banking Vendor Analysis”.

ClairMail is definitely among the field’s leaders, he said. He noted that some institutions may not want the full mobile banking triply-play, preferring to offer mobile banking piece-by-piece while gauging customer feedback. The only name-brand player in this field is Sybase, he said.

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Source: Tech Blog.