-In 2008, it is highly likely many of the large bank system vendors will enter mobile banking.

-Financial institutions regard mobile payments as having the biggest revenue-generating potential for mobile banking. A key to its success will be unique value propositions that will cause consumers to switch their plastic cards for mobile phones.

-It will not be long before a number of manufacturers will offer mobile devices enabling use of full Internet browsers in the mobile space, bringing online banking to the mobile arena.

Red Gillen, a Celent senior analyst, is author of the report, "Mobile Banking Vendors: Tackling the Technology Distribution Tradeoff."

"I think 2007 is very interesting," Gillen says. "This is the year that much-ballyhooed mobile banking is finally gaining traction. This year at least half of the top ten banks, and at least 50 credit unions, now offer mobile banking."

Credit unions, he suggests, actually are ahead of banks in introducing mobile banking. They've reached that point quietly, pretty much under the radar.

Six years ago mobile phone networks and devices were relatively slow. The saturation or adoption level was still modest. Today speed and user head count are both up significantly.

Another factor is the volume of debit card transactions now exceeds credit card transactions.

"With a debit card, you're limited to the amount of money in your account. People need to know what that is," Gillen notes.

If you offer your members mobile banking, they will quickly ask whether they can use it with their cell phone.

Basically, there are three technologies involved--text messaging, mobile browser and application software. The advantage of text messaging and mobile browsing is most cell phones support it. Specific software applications may be richer in graphics and more user-friendly, but not every cell phone can handle them.

So Gillen points to text message and mobile browser as the best choices for a credit union to offer its members. Of the two, he likes mobile browser because of the greater amount of information you can share.

"I'm a big proponent of mobile browsers because of their ubiquity--everybody can use it--and from the credit union viewpoint it allows more information and some kind of branding treatment," he says.

However, text messaging has a role, Gillen adds.

"Text messaging reaches out and finds people," he notes. "'Red, your balance is now below $100.' Or, 'Red, we're offering a new CD rate for the next 30 days.'"

From an economic viewpoint, is it possible to offer members a choice of mobile banking technologies? Gillen says it is.

He expects to see adoption of mobile banking follow at least some of the pattern of on-line banking. Even though it is secure, members may be nervous at first.

"What some financial institutions are doing to augment security is to limit functionality, for example not allowing bill pay," he explains.

Gillen indicates mobile banking will have strong appeal to the youth market, a plus for credit unions seeking to lure more young members. It will also attract small business owners, such as contractors and salespeople who work independently.

"Once I started using mobile banking, I now use it all the time. It's probably not as sticky as bill pay, but it's definitely another strong relationship a credit union can establish with a member," he says.

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