Mobile phone banking builds upon the success of Internet banking, and enables customers to carry out banking transactions from their mobile phone. Its unique selling point is the convenience of being able to carry out banking transactions at any time from anywhere.
Although still in a fledgling state, mobile phone banking is becoming increasingly popular, both in the US and in the UK. Bank of America, for example, announced that they had signed up 500,000 customers to their m-banking service in the first 6 months. Meanwhile, in the UK, NatWest, RBS and Ulster Bank are amongst the latest banks to launch mobile phone banking services.
Examples of transactions typically offered include:
– Balance enquiries
– Mini Statements
– Mobile Phone Top Ups
– Text alerts (e.g. tell me when my balance goes below 100)
More advanced functionality, such as the ability to do funds transfers or third party payments, should also become possible as mobile phone banking starts to mature. Indeed, as the service matures, one might expect that its functionality will align with the range of services currently available through Internet banking.
As with all forms of banking, security is a key consideration. Customers will normally be required to create passwords/passcodes (in the same way that they already do for Internet banking) which they then are required to enter in order to log into the service. Banks may also send out an activation code to the address registered on their customer database for the customer.
Another key element is that all data is stored on servers rather than on the phone itself, so if someone steals your phone they wouldn’t be able to retrieve any bank details from it. Additionally, users can only access the service from their registered mobile handset. So, if a fraudster happened to get hold of your security details, they would also need to steal your phone before they could compromise the system. In this regard, mobile phone banking can be seen as more secure than Internet banking, where the one set of logon credentials can be used from any computer.
Usage of mobile phone banking will continue to rise as more banks launch and promote it and as their customers pick up on its value. The ubiquitous nature of mobile phones means that it will be more mass market than Internet banking, although the size of mobile phone screens may mean that there are some services that will remain better suited to the Internet channel applying for a mortgage, for instance.
Another factor that will be important in its uptake is the specifications of mobile handsets. At present, it is estimated that about 70% of phones in usage are compatible with mobile phone banking. Those that aren’t compatible may not support GPRS or are not Java enabled. Pretty much all new phones coming into the market, however, should be compatible, so within quite a short timeframe there should be no technical barriers to usage of the service.
And, as with Internet banking, mobile phone banking services will no doubt go through many iterations as the providers refine the user experience and services offered. Similarly, like Internet banking, it won’t replace branch usage but rather will be a complementary service, offering bank customers more choice in how they do their banking.