New app points the way to the bank

If your smartphone hasn't altered your reality enough, U.S. Bank is just about ready with a downloadable app that lets users locate ATMs and bank branches with "augmented reality" technology.

Yes, locator apps abound. But they're evolving from the traditional two-dimensional Mapquest-type street maps with pins on them into real-time street views from the phone's camera, with overlay mixing other digital information such as GPS data.

Hold the phone in front of you to position yourself, and the locations of the nearest U.S. Bank ATMs will pop up.

Called Find US+, the app is part of the latest blitz of developments in mobile banking as lenders race to sink their hooks deeper into customers' digital lives.

Minneapolis-based U.S. Bank is almost done testing its new app, which is not yet available to the public. Mobile transactions are often more profitable for banks because the customers are less costly to serve, plus they're trying to meet the raised expectations for convenience and control that Gen Y customers have, said Mark Schwanhausser, a senior analyst at Javelin Strategy & Research.

"We call them 'monkeyhawks,'" Schwanhausser said.

Mobile banking customers tend to be younger (18 to 44), more affluent and not Caucasian, according to Javelin's research.

Augmented reality covers much more than just geolocation, said a spokesman for metaio, which is based in Munich. Macy's, for instance, uses its app to enhance the in-store experience of customers pointing their smartphones at one of the retailer's current "Brazil" displays.

Dominic Venturo, chief innovation officer for U.S. Bank Payments Services, said a handful of European banks have been using the newfangled locator apps for about two years, but he's aware of only one other U.S. bank offering it, Pittsburgh-based PNC Financial Services Group. Venturo speculated that European banks are a bit ahead because the United States was slower to adopt smartphones.

The new app doesn't solve a big problem. Customers weren't necessarily asking for Find US+, Venturo said. But he said it will be particularly useful for travelers navigating unfamiliar cities, since travelers need cash.

"We run across this a lot in our research," Venturo said.

Then there's the cool factor. One reason banks are chasing mobile technology is to position themselves as innovative, tech-savvy brands that appeal to younger consumers.

"I think that's a key issue for them," he said. "They have a history that involves farming communities and more people who are not the first-adopter types. It needs to be able to compete with the giant banks."

In a report last fall, Javelin ranked U.S. Bank No. 12 in best-of-class mobile banking. Rival Wells Fargo was No. 2, and JPMorgan Chase was No. 1.

U.S. Bank first announced the new augmented reality locator app tests in April, and gave a pilot version for Apple's iPhone to hundreds of U.S. Bank employees around the country to download and test.

Now it's getting ready to survey everyone for feedback on a range of factors, which will help decide whether to integrate the augmented reality app into U.S. Bank's general mobile banking app, or keep it separate. When it's launched, the app will work on iPhone, Android and Blackberry. There's no launch date yet.

The bank's experiment with the augmented reality locator app could hold other value.