Mobile Banking: Where from and where to?
Being a self-confessed mobile addict, I was curious about how that little device had insinuated itself into my life, almost without my realising it. What was driving the massive adoption of mobile technology, for banking in particular, by millions of users? Had the trend peaked or was there more to come?
My search revealed what a long distance the mobile had traversed as a channel of financial transaction, from a mere SMS alert mechanism to a versatile channel enabling most types of banking activity. Having grown faster than any other channel, it's on its way to literally replacing the wallet - Near Field Communication technology has transformed the handset into a physical transaction mechanism - so it won't be long before I'm tapping my phone rather than swiping my card to pay for things.
While the need for ubiquitous easy access and lower transaction costs (for both banks and their customers) set the stage for a channel that could pick up the ball from where the ATM and Internet had dropped it, it was technology that got things going. Security was the bugbear of SMS-based banking; while the arrival of WAP and the browser improved protection, it excluded all but the most sophisticated devices, until mobile applications became downloadable to make a host of services, including banking, usable on all handsets. Now, my bank's mobile offering protects my account through an enhanced communication security layer based on the use of encryption algorithms.
Mobile apps also transformed the banking experience into one that was richer, context-based and more responsive.
But that was then.
If the think-tanks are to be believed, by 2012 money transfer will be the most popular consumer mobile application, and four years from now, more than half the planet will use their phone to make purchases. The arrival of contact-less payments, P2P lending and prepaid cards issued by telecom firms (mobile money) are all harbingers of the same trend. The future of mobile banking will be determined by considerations such as interoperability across all types of devices, browsers and communication technologies; security of stored and transmitted data as well as user identity; extreme personalisation and 'over the air' application distribution.
In the meantime, I have to pay my utility bills and buy weekend movie tickets...where did I put my mobile phone!
(I have described the journey of mobile banking in detail in my paper: Evolution of Mobile Banking. You can read the same here)
Comments
Mobile Banking can go beyond making purchases to making bank-centric transactions e.g transfer of money to different accounts, third party transfer etc.
Posted by: Saheem Mir | November 15, 2010 6:29 AM