Nokia's networks division has developed new software to enable people to conduct banking transactions on mobile phones, and the company is peddling the software to banks and financial institutions.

Mobile banking would let customers access account information, conduct withdrawals, and transfer money using handheld devices. Wireless service providers are offering such services as a way to lure newcustomers, keep old ones, and even boost handset sales.

Pressure is on handset makers to find more income sources because nearly every player in the industry is feeling the slowdown in sales. On Tuesday, Nokia said slowing handset sales is forcing it to cut 400 jobs.

The telecommunications slowdown hasn't spared Motorola, which has fired thousands of employees, or number two handset maker Ericsson, which said Tuesday it would cut costs by nearly US$2bn by the end of next year. But analysts aren't sure whether mobile banking applications are theanswer to telecommunication woes.

Carsten Schmidt, a Forrester Research analyst, thinks there won't besuch a large uptake by corporations, mostly because companies need timeto decide which of the growing number of services works best for them and to poke and prod the systems for any unseen security holes.

But it may, at least, help banks keep the customers they already have,said Jupiter Research senior analyst James Van Dyke.

To help bolster its new software, Nokia Networks also recently announced a partnership with 724 Solutions. 724 is already working with many of Europe's largest financial institutions to createmobile digital signatures and other wireless banking needs.

The deal with 724 Solutions lets Nokia offer some services that the other wireless banking software packages either don't offer or don't do in quantity such as "large-scale funds transfers, loan andmortgage agreements and credit card applications", said Jukka Riivari, director of sales and marketing at Nokia.

Nokia's banking aspirations were made public about a week after Nokia executives said they expect the networks division to become the number one high-speed, third-generation phone network provider in the world.

Carriers are expected to begin offering the service next year, although NTT DoCoMo in Japan plans to launch a service next month.

Nokia is also getting into a race that seems to be halfway over, especially in Europe where wireless banking is widespread. The United States is largely an untapped market, however.

Last year, a Chicago subsidiary of the Bank of Montreal became the first bank to offer US customers wireless banking. Since then, at least five other US banks have offered up the same type of services.

Cingular Wireless is also working with 724 Solutions to bring wireless banking to its subscribers. A spokesman wouldn't say when the service would be introduced.

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