A deck shuffling has occurred, the report said, because mobile retail banking vendors have evolved their business practices in three primary ways. First, many vendors have graduated from offering one modality to three (SMS/text, mobile web browsers and apps). Second, many have shifted their focus from front-end user interfaces to back-end functionality. And third, for many vendors, the number of financial institutions they've worked with has increased from a few to hundreds, Gillen said.

Now, vendors face a highly competitive market in which the bar has been raised on their highly sought after services.

"During the short three years since 2007, the mobile retail banking market has undergone major changes in terms of technology, feature functionality and end-user adoption," Gillen said. "The growing general popularity of mobile devices and the capabilities they offer have led financial analysts to place a higher priority on mobile banking, which correspondingly places more expectations on mobile banking technology vendors."

In the report, Celent noted a number of mobile banking trends. They include a new classification of mobile banking as a discrete channel as opposed to an extension of online banking; an emphasis on back-end functionality over front-end bells and whistles and the growing popularity of transactional mobile banking services and products (especially payments).

Celent found that text messaging has become a favored means of communication for mobile banking alerts and marketing messages, mostly because it allows financial institutions to take the initiative to reach out to members and customers. Another trend listed in the report is the necessity of offering three modalities-text, mobile browsers and apps.

"It was once acceptable for mobile banking vendors with strengths in one modality to partner with vendors, but banks are now looking for native triple play capabilities in a single vendor," Gillen said.

Financial institutions have also changed their view of mobile banking from a short-term benefit to something that's part of a long-term business strategy, which has led to popularity of solutions that continuously evolve.

"Rather than look at 'check the box' functionality, the banking industry is looking at more strategic banking as it moves out of this recessionary period and is gearing to invest," Gillen said.

As financial institutions have adopted mobile banking solutions, they've been faced with a number of concerns. But Celent finds comfort has increased since 2007, because financial institutions "now seem to be relatively convinced that most vendors' solutions can provide a rich and attractive user experience" and "have a better understanding of the ecosystem issues that preclude near-term commercial availability of this functionality."

Remaining concerns include maintaining enterprisewide consistency between the mobile channel and other channels; the costs of integrating mobile banking solutions; security maintenance; providing consistent app updates across various mobile phone platforms; offsetting mobile banking costs with monetization; developing mobile customization abilities and finding solutions that will support next-generation mobile functions.

Financial institutions are addressing these concerns by seeking mobile banking solutions with key characteristics, Celent said. For example, those that are integrated with the same banking systems that are integrated with nonmobile banking channels, require minimal integration efforts and are highly secure and "future-proof" (can support more advanced functions down the road).

To evaluate mobile retail banking vendors, Celent used its "ABCD vendor view framework," which comparatively ranks vendors on four performance factors: advanced technology, breadth of functionality, customer base and depth of client services.

Each winning vendor exhibited different key business moves, Celent said. mFoundry launched the American mobile retail banking market's only live mobile contactless payment solution, and ClairMail focused on its use of alerts. M-Com demonstrated the most effective live functionality. Jack Henry drastically grew its number of clients and FIS provided excellent customer service during the implementation of more than 200 mobile banking solutions, Celent said.

Ten additional mobile banking vendors were covered in the report: Harland Financial Solutions, Infosys, Intuit, Monitise, MShift, ORCC, Q2, S1, Sybase and Tyfone. Firethorn and Mobile Money Ventures were asked to participate but were not able to do so, Gillen said.