Bank of Montreal is switching off its mobile banking services for retail customers in North America and online brokerage customers in Canada due to lack of demand.
The Canadian bank says it is disbanding its 20-strong wireless banking unit and will begin to wind down services for current users in August. Cellphone access will be maintained for online brokerage customers in the competitive US market.
Veev, the first wireless financial services package in North America, was launched by Bank of Montreal in May 1999 in conjunction with Toronto-based software company 724 Solutions. At the time of the launch BMO described the push into wireless financial services as "the opportunity of a lifetime", and the bank was lauded as a pioneer in the field.
Although it has yet to release subscriber numbers, it is understood that customer take-up of wireless services at BMO has fallen below expectations.
Research house Celent estimates that the total number of users actively conducting banking and brokerage transactions peaked around a quarter of a million in 2001, and has been in steady decline ever since. Spending rates by financial institutions, including banks, brokerage houses, and credit unions, on wireless technologies and related services actually peaked in the previous year, and has dropped more than two-thirds, causing many pure-play wireless vendors to radically shift their business models and target markets, or even go out of business altogether.
In several cases, banks have stopped or indefinitely postponed their wireless projects. For all the promise of mobile technologies, only 40% of the leading US financial institutions currently provide retail mobile services today.
"The current recession, in conjunction with a nascent but immature technology, and a huge misunderstanding of consumer behavior and wants, has brought wireless banking and brokerage into a state of rapid decline," says Celent analyst Michael Haney.