By Charles Landry

Recent economic turmoil has shown the banking industry that the old ways of doing business are too costly and ineffective.

To return to a sustainable growth trajectory, banks should consider these facts: 70 percent of U.S. consumers say they plan to keep a closer eye on their finances. For six out of every 10 consumers, that includes gaining the ability to manage their money anytime, from anywhere, 24 hours a day, according to TowerGroup.

To achieve this, consumers will look for banks that can reach them with services they can use on the devices they carry constantly. That means mobile banking.

Market bent on growth
Working in banks' favor is a soaring mobile population that, as time passes, will become even more apt to use mobile banking services.

Most subscribers regularly use non-voice features such as SMS text messaging. Though the bulk of today's traditional banking customers are baby boomers and members of Generation X, the next wave of consumers will have been raised on mobile devices.

Generation Y consumers ages 10-30 years are 28 percent of the U.S. population. They will reach 91 million by 2018, per a Javelin Research U.S. study.

Researchers expect Generation Y to be the first to make mobile devices a primary channel for accessing banking services.

In fact, 40 percent of Generation Y subscribers have already tried mobile banking, and surveys show they are frustrated when they discover their bank hasn't mobilized yet, according to a Javelin Research U.S. study.

Immigration trends also present enormous opportunity.

The U.S. Hispanic population, for instance, will more than double between 2005 and 2050, when it will amount to 29 percent of the U.S. population, per TowerGroup.

Most of this fast-growing demographic remains unbanked. Targeting these consumers with specialized mobile services can create lasting growth for banks.

Proven benefits
Mobile banking is not new, and millions of consumers in North America already know the benefits first-hand.

Among many advantages, mobile banking offers consumers convenience and control, allowing them to keep track of account activity and perform many day-to-day functions that they otherwise would conduct via phone, computer or in-person visits, from transfers to international remittances.

Mobile access also helps consumers stay on top of fraud threats and suspicious account activity.

For banks, mobilizing their services enables low-cost, efficient product delivery and the ability to reach out to customers with timely, relevant and actionable alerts, offers and information. Providing these types of services enables banks to reinforce and enrich their brand, and to cross-market services based on their growing knowledge of user preferences and needs.

Multiple mobile channels
Mobile banking services today are available via three primary channels: SMS text messages, WAP browsers and mobile applications.

Banks need to assess their goals -- near-term and beyond -- to determine which channel (or combination of channels) best fits their needs.

For most consumers, however, mobile banking starts with SMS-based services. That is because almost all mobile devices sold today support SMS messaging, and SMS by far enjoys the broadest use among subscribers.

Compare that to WAP browsers -- used by only 19 percent of subscribers -- and mobile client applications, used by 12 percent, according to Javelin Strategy and Research.

For younger users, texting is second-nature, but it's not limited to Generation Y, or even to Generation X.

More than half of consumers who text are older than 35, and a third are more than 45 years old, according to Javelin Research and Strategy.

Consumers are also increasingly accustomed to receiving bank alerts, stock quotes and sports scores through SMS.

Of the 224 billion SMS messages delivered by VeriSign last year, 1 billion were sent to subscribers by enterprise applications.

Fast track for growth
Can mobilizing put banks on a growth trajectory?

Just ask U.S. Bank, which has seen mobile banking adoption grow 20 percent per month after deploying an SMS-based mobile banking solution that delivers information alerts such as balance below threshold, statement available or payment due, as well as security alerts -- changes to passwords or phone numbers -- to mobile customers.

The service augments its popular mobile Web channel at http://m.usbank.com. While targeted at all U.S. Bank customers, the service is especially aimed at younger customers who rely heavily on text messaging to communicate.

Scalable deployments
A growing number of banks are leveraging SMS messages and short codes for alerts and other services because they have found SMS to be a cost-effective, reliable and scalable channel that puts the fewest demands, economic or technical, on consumers.

Encrypted during wireless transmission, SMS messages are not stored as clear text, and carrier network endpoints are secured via standard protocols -- making them far more secure than current mythology suggests.

For these reasons, SMS serves as a logical stepping stone for banks looking to introduce the vast majority of mobile banking services available today, with an eye toward eventually expanding to MMS or WAP for more complex, transaction-based services.

Somebody has to serve mobile banking customers. No doubt, it will be those banks that mobilize sooner, not later.

Charles Landry is vice president of products and innovation at VeriSign Messaging and Mobile Media, Mountain View, CA. Reach him at .