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Mobile Implementation
by Victor D. Wortman
January 2000
Vive Veev! Bank of Montreal Takes to the Airwaves with Wireless Banking and Investment
Bank of Montreal likes the point position when it comes to implementing new technology ideas. One such idea was the 1996 creation of a new banking channel, ?mbanx,? that was completely divorced from the traditional retail system, and which allowed customers the ability to perform all of their banking activities over the Internet. There was never a need to go to a branch. Ever.
However, after a couple of years, bank management rediscovered the fact that customers actually like to have contact with their bankers. So last year, Bank of Montreal?BMO, for short?reintegrated mbanx with the conventional retail banking operations, creating a ?clicks and mortar? environment where customers can have it all?the comfort of live banking and, if they choose, the convenience of banking from their own computers.
BMO didn?t stop there. Last May, the institution launched a unique new banking channel, this one employing the PCS/CDMA network of Bell Mobility, Canada. With response from the initial customer market trial hailed by BMO Vice Chairman Jeff Chisholm as ??overwhelmingly positive,? the channel has since been extended to the bank?s Nesbitt Burns full service brokerage customers and to its Investor Line discount brokerage. It is being marketed as ?Veev??fast, fun, and consumer friendly.
The First ?First?
Bank of Montreal?s history reaches back to 1817, when it became Canada?s first chartered bank. Currently, the Bank of Montreal Group has nearly 11 million total customers; US$150 billion in assets; 32,000 employees; a wholly-owned U.S. banking subsidiary, the Chicago-based Harris Bank; and a substantial equity position in Mexico?s Grupo Financiero Bancomer. Its operations extend into all areas of personal and commercial banking, investment banking, and brokerage services, and it conducts international operations in eleven countries in Latin America, Europe, and the Asia-Pacific region.
At about the time that mbanx was being returned to the fold, Greg Wolfond, an entrepreneur, had spotted a distinctive gap in the market for wireless banking and brokerage services. Wolfond had previously worked with Bank of Montreal through his company Footprint, (a software company specializing in object-oriented agent and sales technologies) which was subsequently acquired by IBM. Wolfond had been taking a sabbatical and during that time he undertook research into the potential of the wireless financial services market. Based on that research, he founded 724 Solutions to drive his vision of a personalized banking customer experience.
Wireless Vision
?724 Solutions brought the vision of wireless financial services to the Bank of Montreal and together we made it a reality,? explains Mark Dickleman, vice president for wireless and mobile initiatives for BMO and Harris Bank. ?This led us to a concept that we called ?non-Web Internet? that would carry banking operations beyond the Web browser. We initially focused on game consoles because research indicated that there were significantly more game consoles in homes than there were personal computers. Moreover, the game consoles had graphics capabilities that surpassed those of PCs.
BMO and the 724 Solutions team began a joint effort in 1998 in an informal partnership arrangement to undertake research and development. The initial focus was to create a proof-of-concept system that could be delivered over various channels.
Developers know that goals keep evolving with technological advances, and as the BMO/724 Solutions project proceeded, Palm Computing began its serious penetration of the Canadian market where, according to Dickleman, it has achieved its largest installed base. Recognizing the potential of the Palm Pilot, the developers shifted their attention from game consoles to the Palm device and commenced to explore wireless options.
Catalyst
Meanwhile, 724 Solutions brokered a deal that brought Bell Mobility on board to form a three-way partnership. Bell Mobility was the first telecom provider to implement a digital data network in North America. It had successfully implemented the Phone.com (then Unwired Planet) browser on the Qualcomm digital PCS handsets. With Bell Mobility?s CDMA network available both for phone interaction and wirelessly-enabled Palm devices via the customer?s mobile phone, Bell Mobility was enthusiastic about the business opportunities that the partnership could offer.
?724 Solutions acted in a catalytic role. With Bell Mobility on board with its Phone.com wireless solution, we began looking beyond a prototype to what it would actually take to deploy it in a market trial,? Dickleman says. ?With 724 Solutions, we set in motion a program for developing a wireless solution that would accommodate both banking and financial services, and would also offer important lifestyle content that we felt would be interesting and attractive to our customers.?
The program called for 724 Solutions to be the technology leader, developing an infrastructure solution that would interface to the Bell Mobility CDMA network and the Palm device with the Phone.com browser on one side, and with BMO?s banking infrastructure on the other. BMO?s banking system employed a client-server architecture and ran in the UNIX environment on computers based in Toronto.
Easy Integration
The result was the 724 Solutions Financial Services Platform, which provides an end-to-end platform that includes banking and brokerage applications, personalization, and integration to the bank?s existing systems via Open Finance Exchange (OFX), the financial industry implementation of Extensible Markup Language (XML).
There are actually two levels of middleware, Dickleman says. One had been written by the bank itself, and it comprises the basic OFX engine. The other is the new software that was created by 724 Solutions, which had responsibility for the architecture development, security, design, and overall implementation issues to enable anytime, anywhere, anyhow banking services.
?Integrating 724 Solutions Financial Services Platform with the back-end banking system was not difficult,? Dickleman says. ?Once the software was completed, it involved only a few tweaks to support certain functions, such as the implementation of transaction sets to support investment functions.?
On the network side, it was somewhat more of a challenge.
Making Connections
?CDMA was a fairly new technology, even on the voice side, as was the Phone.com browser technology,? Dickleman says. No one had tried to implement a Palm Pilot and browser for financial services before, nor had anyone ever run financial transactions over Phone.com. No one had implemented Phone.com on a PCS phone, and no one had ever tried cabling a Palm device to a PCS digital phone. There was a fair amount of blood, sweat, and tears with our partners before we succeeded in doing all of this.?
Development actually commenced early in 1998, according to Paul Mansz, vice president for architecture at 724 Solutions. Mansz describes the infrastructure solution as a system of five components: channel services, the rendering engine or application port that accepts requests, retrieves the data, aggregates it in XML, and furnishes it to the devices; the content protocol gateway, which currently speaks OFX, but which he says will speak other standards in the future; the session component; the authentication component; and the profiling engine that provides for customer personalization and customization.
Coming to Market
Within a year, the team of 724 Solutions, BMO, and Bell Mobility had reached the point where a market trial could be scheduled.
?We named the new service ?Veev? because we wanted a totally open brand, independent of any other channel and not encumbered by any history or identification with anything that had been done before,? Dickleman says. ?We decided on a market trial involving 500 customers, which in fact, very much resembles a commercial launch. But by conceptualizing a market trial, we could be more selective in the enrollment process. This is particularly important when you are dealing with new technology and areas where there is no defined value proposition.?
The market trial was successful. One participant, Don Tapscott, a columnist for Southam Newspapers? National Post declared in his column ??I?ve been one of 500 lucky test participants. It?s great. With Veev, I can pay bills, move money from one bank account to another, stop payments, request credit card advances, order cheques, view investment portfolios and stock quotes, and receive news and weather forecasts.?
A User?s View
?I can ask the program to monitor particular stocks and if one of them reaches a certain price or trading volume I will be alerted. I can quickly call up a chart of the stock?s performance for the past week, month, three months, or year. Press a few more buttons and I can buy or sell?I can access Veev through my cell phone, a Palm Computing organizer, or a regular PC.?
And, adds Paul Mansz, Windows CE devices, Java OS-enabled devices, and a variety of set-top devices are around the corner, since 724 Solutions Financial Services Platform has been created to be as independent of devices as it is of any other legacies.
?Our intent at the beginning was to address primarily non-PC-based channels,? he says. ? We are now working on addressing all channels.?
With the Canadian market trial results in, BMO moved to extend the system. From the initial banking application, it was implemented for the brokerage operations Nesbitt Burns and Investor Line. Then, it was time to cross the border.
Next Stop, Chicago
Veev is now in market trial at Chicago-based Harris Bank, with essentially the same features as those offered in Canada. There are exceptions. For example, more development work remains to be done on the ?bill-pay? capability, for which there are different security procedures in the U.S. than in Canada.
The Harris implementation represents the third major enhancement to the system from a customer visibility standpoint, not to mention the invisible but ongoing engineering work to extend its capabilities.
In terms of customer base, BMO isn?t talking, reluctant to give away commercial advantage. Veev is now available to all Bell Mobility subscribers, not merely to customers of Bank of Montreal, and the success of the Veev pilot has paved the way for 724 Solutions to provide similar implementations for Citibank and the Bank of America.
Early Market Strategy
?We view the wireless and mobile device sector as a unique market with its own attributes and characteristics,? Dickleman says. ?We?ve disciplined ourselves consciously to not prejudge the market, but to remain open and learn from it as we go. Early markets present a non-repeatable time to learn, position, and adapt.?
?Being first to market is meaningless unless you learn?it?s just one press release. But if you are first to market and you sustain your effort, history shows that there is repeatable advantage in it. We feel that we have realized that advantage from our Veev launch, in being first to offer securities trading by wireless phone, and by being first to introduce banking by wireless phone in the U.S., through Harris Bank.?
What lies ahead? In Don Tapscott?s vision: ?Coming soon, no doubt, the screen in my dashboard, my wife?s digital movie camera, my son?s portable video game, my daughter?s portable music player, and a whole host of new Personal Digital Assistants.?
You never know. Technology rules!
Figure 1: Accompanying 724 Solutions Text
724 Solutions provides an Internet infrastructure solution to financial institutions that enables them to offer personalized and secure on-line banking, brokerage and e-commerce services across a wide range of Internet-enabled wireless and consumer electronic devices. Its solution enables consumers to access these services through network service providers using digital mobile phones, personal digital assistants, two-way pagers and personal computers. With critical security features built in, 724?s solution can be quickly implemented and integrated with existing systems, and scaled or expanded to accommodate future growth. Using the 724 Solutions platform, financial institutions may build on their consumer?s trust and provide new levels of service in an easy to use, personalized way.
724 Solutions Notes
By 2003 there will be approximately 828 million digital wireless subscribers. The number of U.S. users of banking on-line will increase to approximately 40 million by 200. |
