Threats observed during user authentication
An adversary can download the client on a laptop/desktop and use its insecurities for malicious purposes.
An adversary can obtain the user credentials stored on the mobile phone by transferring the contents to pc/laptop from the phone or memory card.
An adversary can register with valid details of a valid bank account holder and access his/her account details or make transactions.
An adversary can access user credentials directly from the phone’s folders or from phone’s memory card.
An adversary can obtain the new PIN for transacting using the weak forgot password feature or an adversary can change the password/PIN of a valid user without authentication/authorization. An adversary can use the auto-complete feature to access a valid user’s account.
An adversary can guess weak passwords/PIN to retrieve customer information.
Ideal scenario
Threats addressed in the following method:
An adversary can download the client on a laptop/desktop and use its insecurities for malicious purposes
An adversary can use the auto-complete feature to access a valid user’s account.
The customer has to first register with the bank. Customer details like full name, postal address, e-mail address, bank account details and mobile phone number should be provided.
The bank would inform the vendor to push the mobile client application to the mobile number provided by the customer. This can be done through a system which communicates between the server at vendor end and bank end. The vendor enters the mobile number of the customer and the client application is pushed to it. This ensures that the client is not downloaded to a pc or laptop and misused. In case the push is not possible, the customer has to be informed and the client application installed by the vendor.
The application has to ensure that during installation a few checks are done
Transfer the bank’s and vendor’s public key for encryption purposes. There can be two keys generated for the vendor; one for storage and one for data transmission.
The client files/folders are installed on the phone and not in the memory card.
The files and folders should be restricted from being transferred to a memory card or pc/laptop. The access to these files should only be through the executable and not directly.
The installer should be removed after installation.
Application should not allow auto-complete feature.
Threats addressed in the following method:
An adversary can guess weak passwords/PIN to retrieve customer information
Once installation is done, customer has to use the client to register with the vendor for using their application to transact through mobile phones. During this process the above mentioned details should be provided through the client. Along with this, the customer has to create a unique username and password for critical transactions like fund transfer, bill payment, etc and a PIN for non-critical operations like account status check, cheque status enquiry; and a hint question/secret answer for forgot password feature. Ideally, the customer should not create a username/password combination; the customer’s Internet banking credentials should be used. This ensures that for critical transactions, the details are not stored at the vendor’s server. The PIN, which is used for non-critical operations, can be encrypted using a one-way hash function at the vendor’s server.
The password and PIN should follow a strong password policy.
Threats addressed in the following method:
An adversary can register with valid details of a valid bank account holder and access his/her account details or make transactions
There can be two layers of authentication; one using the Internet banking credentials for critical transactions which is verified by the bank; and another using the PIN for non-critical operations by the vendor.
During registration, the application should send the customer details like name, address, etc and mobile number in an encrypted format using the vendor’s transport public key. The MSISDN number has to be appended to this encrypted data by the mobile network provider when it exits the mobile network. The vendor server-side application will verify whether the mobile number entered by the customer and the mobile number provided by the network provider is same or not. Alternatively if this is not possible, the vendor will have to verify with the customer by calling back on the mobile number provided.
After registration with vendor, the customer details like name, bank account details, postal and e-mail addresses are stored at the vendor server.
Threats addressed in the following method:
An adversary can obtain the user credentials stored on the mobile phone by transferring the contents to pc/laptop from the phone or memory card
An adversary can access user credentials directly from the phone’s folders or from phone’s memory card
Ideally, customer details should not be stored on the mobile phone. If they are, these checks should ensure they are secured from misuse.
Store the customer data using the vendor’s storage public key. If for any reason these details are required, the encrypted data can be sent to the vendor server.
Username/password or PIN should not be stored on the mobile phone.
The customer data should not be directly accessible from the mobile phone, only the application should access it.
Forgot password feature:
Threats addressed in the following method:
An adversary can obtain the new PIN for transacting using the weak forgot password feature or an adversary can change the password/PIN of a valid user without authentication/authorization
During user creation, the application should ask for a hint question and answer for ‘forgot password’ feature.
The user should enter the correct answer to the hint question to obtain the new password
Once the user enters the correct answer to the hint question, the customer details from the mobile phone should be deleted. The application should inform the vendor/bank about the password change and should be ready for re-registration of the customer.
The new password should be sent to the user via an SMS
Using this password the customer should register again only with the vendor.
The application should provide the feature to change the password on first logon.
Threats observed during transactions
Based on the services provided to the customer the following threats can be observed
An adversary can sniff the contents of transaction and obtain confidential information.
An adversary can bypass authentication controls.
An adversary can make bogus shopping or purchase transactions for another valid customer.
An adversary can view the account details of another user.
An adversary can modify the ‘from account’ and amount field during a fund transfer process.
An adversary can predict the session id and perform transactions as a valid user.
An adversary can access a valid account using an active session which has not been terminated after a long time of inactivity.
An adversary can login using his credentials and view/modify the details of another valid customer.
Illegal/Invalid transactions can be performed without continuous authentication process for each transaction.
Ideal scenario
Threats addressed in the following method:
An adversary can sniff the contents of transaction and obtain confidential information
All transactions should be through a secured connection. Data transmitted between the client application and the vendor server should be through HTTPS or another secured channel and also encrypted through the vendor’s transport public key. The data flowing back from vendor sever to the client should be through HTTPS or a secured channel.
The data flowing between the vendor server and bank server should be through HTTPS. Also the customer details, which are not required by the vendor, should be encrypted using the bank’s public key. The return should be through HTTPS.
Any data flowing between bank/vendor to other third parties or merchants like for mobile shopping should be through a secured payment gateway.
Threats addressed in the following method:
An adversary can bypass authentication controls
Illegal/Invalid transactions can be performed without continuous authentication process for each transaction
An adversary can view the account details of another user
Each transaction or operation should be authenticated either using a single layer or a dual layer.
The vendor side application should authenticate the customer using the PIN for non-critical operations. Validation checks should be in place to ensure that this authentication control is not bypassed.
For critical transactions, there can be dual authentication mechanism, one using the PIN at the vendor and other using the Internet banking ID at the bank side. Validation checks should be in place to ensure that this authentication control is not bypassed.
Threats addressed in the following method:
An adversary can make bogus shopping or purchase transactions for another valid customer
An adversary can modify the ‘from account’ and amount field during a fund transfer process
For example, in a fund transfer operation the bank should ask for the Internet banking credentials from the customer for authentication and verification. Also checks need to be in place to ensure that the ‘from account’ field cannot be modified or the ‘amount’ field is not negative.
In mobile shopping operation, the payment should be through a secured payment gateway. Ideally, the vendor should not store the details of the shopping done by the customer. In case the vendor performs the payment for the customer for his/her purchases, then only the details need to be stored at the vendor. Then the customer authorizes the bank to transfer the amount to the vendor’s account for making the payment to the merchant for his/her item.
Threats addressed in the following method:
An adversary can predict the session id and perform transactions as a valid user
An adversary can access a valid account using an active session which has not been terminated after a long time of inactivity
An adversary can login using his credentials and view/modify the details of another valid customer
Having a good session management mechanism ensures that attackers don’t use a valid session id for login purposes. Also the application should ensure that users are not able to change the data and view another customer’s details [like URL manipulation].
Other possible threats
An adversary can upload malicious files to the server/application.Ideally, a mobile banking scenario would not require a customer to upload files to the server. Hence the same can be disabled for customers.
An adversary can obtain the confidential customer data and source code from the serverAll customer data and application source code at the vendor server should be protected not only from the outside attackers, but from internal users/developers also.
Malicious activities are undetected.Audit trails and logging need to be maintained for the application which mentions the customer name, bank details and transaction performed with time and date for future reference.
An adversary can obtain the details of the server or error messages provide information for the adversary to perform specific attacks.The application should ensure no messages are provided to the outside world which would reveal information about the system.
An adversary can obtain the vendor private key from the server to perform man-in-the-middle attacks.The private keys should be stored securely and access should only be given to the application to use the keys during any kind of operations.
In short the idea is to maintain CIA during storage and transmission. The concept of dual layer authentication, multiple encryption mechanisms and restricted access through the mobile client application achieves just this.
The Mobile Station International ISDN Number is the standard international telephone number used to identify a given subscriber. MSISDN is defined by the E.164 numbering plan. This number includes a country code and a National Destination Code which identifies the subscriber’s operator
Showing posts with label mobile banking. Show all posts
Showing posts with label mobile banking. Show all posts
Thursday, December 18, 2008
Friday, December 12, 2008
MOBILE BANKING
Fundamo and Accenture sign a deal to promote mobile wallets across the world. Cape Town-based mobile banking software company Fundamo has signed a partnership agreement with Accenture for the provision of mobile wallets worldwide.
Worth knowing
A licence to kill innovation
“We have been in the mobile financial services software environment for seven years, and we have always looked at how we can position ourselves in the international market. The deal with Accenture gives us just the global situation we have been looking for,” says Fundamo head of business development Aletha Ling.
The demand for mobile wallets is starting to accelerate as a natural result of the deep penetration of mobile phones into communities around the world, she states.
The software has been through the new technology cycle of early adopters and test shaping, Ling explains. “The 2007 year showed that the technology has reached the growth curve and the time is right for adoption globally.”
According to Ling, the technology is being driven by the higher acceptance of the technology. “We are seeing a greater consumer need for financial services on mobile, especially in the emerging markets.”
She cites the need for migrant workers to be able to transfer part of their income into international accounts. “A Nigerian working in Johannesburg will want to send money home to his family. The mobile wallet allows just that kind of transfer among others.”
Infrastructure solution
The mobile wallet represents a transactional bank account that will be held by the mobile operators, she says. The mobile operators are given a packaged pilot solution. They also have the option of issuing a branded debit card with the account.
In terms of financial services regulations, Ling says each mobile operator or client is responsible for compliance.
Accenture says it will lead the promotion of mobile wallets worldwide in 2008, which will allow mobile network operators to deploy, operate and fine-tune the service. “Operators will also have the opportunity to test partnering relationships with a bank, prior to full-scale mobile wallet service deployment,” says Accenture`s mobile wallet lead Michael Eagleton.
“SA is already well served in the arena of mobile banking, and is not our essential target. We are looking at largely populated areas in emerging markets such as DRC, Uganda and Ghana, along with several countries in South America.”
A second application can be integrated as a mobile channel for the banks, says Ling. “Banks are faced with a problem of growing their client bases, with the huge financial implications of adding infrastructure – such as ATMs and branches – in under-serviced areas. The mobile phone allows them to use an infrastructure already in place, which is very enticing to banks in emerging markets.”
Participating financial service providers, mobile operators and clients will be announced at an official launch in Barcelona next month.
Worth knowing
A licence to kill innovation
“We have been in the mobile financial services software environment for seven years, and we have always looked at how we can position ourselves in the international market. The deal with Accenture gives us just the global situation we have been looking for,” says Fundamo head of business development Aletha Ling.
The demand for mobile wallets is starting to accelerate as a natural result of the deep penetration of mobile phones into communities around the world, she states.
The software has been through the new technology cycle of early adopters and test shaping, Ling explains. “The 2007 year showed that the technology has reached the growth curve and the time is right for adoption globally.”
According to Ling, the technology is being driven by the higher acceptance of the technology. “We are seeing a greater consumer need for financial services on mobile, especially in the emerging markets.”
She cites the need for migrant workers to be able to transfer part of their income into international accounts. “A Nigerian working in Johannesburg will want to send money home to his family. The mobile wallet allows just that kind of transfer among others.”
Infrastructure solution
The mobile wallet represents a transactional bank account that will be held by the mobile operators, she says. The mobile operators are given a packaged pilot solution. They also have the option of issuing a branded debit card with the account.
In terms of financial services regulations, Ling says each mobile operator or client is responsible for compliance.
Accenture says it will lead the promotion of mobile wallets worldwide in 2008, which will allow mobile network operators to deploy, operate and fine-tune the service. “Operators will also have the opportunity to test partnering relationships with a bank, prior to full-scale mobile wallet service deployment,” says Accenture`s mobile wallet lead Michael Eagleton.
“SA is already well served in the arena of mobile banking, and is not our essential target. We are looking at largely populated areas in emerging markets such as DRC, Uganda and Ghana, along with several countries in South America.”
A second application can be integrated as a mobile channel for the banks, says Ling. “Banks are faced with a problem of growing their client bases, with the huge financial implications of adding infrastructure – such as ATMs and branches – in under-serviced areas. The mobile phone allows them to use an infrastructure already in place, which is very enticing to banks in emerging markets.”
Participating financial service providers, mobile operators and clients will be announced at an official launch in Barcelona next month.
MOBILE BANKING
Fundamo and Accenture sign a deal to promote mobile wallets across the world. Cape Town-based mobile banking software company Fundamo has signed a partnership agreement with Accenture for the provision of mobile wallets worldwide.
Worth knowing
A licence to kill innovation
“We have been in the mobile financial services software environment for seven years, and we have always looked at how we can position ourselves in the international market. The deal with Accenture gives us just the global situation we have been looking for,” says Fundamo head of business development Aletha Ling.
The demand for mobile wallets is starting to accelerate as a natural result of the deep penetration of mobile phones into communities around the world, she states.
The software has been through the new technology cycle of early adopters and test shaping, Ling explains. “The 2007 year showed that the technology has reached the growth curve and the time is right for adoption globally.”
According to Ling, the technology is being driven by the higher acceptance of the technology. “We are seeing a greater consumer need for financial services on mobile, especially in the emerging markets.”
She cites the need for migrant workers to be able to transfer part of their income into international accounts. “A Nigerian working in Johannesburg will want to send money home to his family. The mobile wallet allows just that kind of transfer among others.”
Infrastructure solution
The mobile wallet represents a transactional bank account that will be held by the mobile operators, she says. The mobile operators are given a packaged pilot solution. They also have the option of issuing a branded debit card with the account.
In terms of financial services regulations, Ling says each mobile operator or client is responsible for compliance.
Accenture says it will lead the promotion of mobile wallets worldwide in 2008, which will allow mobile network operators to deploy, operate and fine-tune the service. “Operators will also have the opportunity to test partnering relationships with a bank, prior to full-scale mobile wallet service deployment,” says Accenture`s mobile wallet lead Michael Eagleton.
“SA is already well served in the arena of mobile banking, and is not our essential target. We are looking at largely populated areas in emerging markets such as DRC, Uganda and Ghana, along with several countries in South America.”
A second application can be integrated as a mobile channel for the banks, says Ling. “Banks are faced with a problem of growing their client bases, with the huge financial implications of adding infrastructure – such as ATMs and branches – in under-serviced areas. The mobile phone allows them to use an infrastructure already in place, which is very enticing to banks in emerging markets.”
Participating financial service providers, mobile operators and clients will be announced at an official launch in Barcelona next month.
Worth knowing
A licence to kill innovation
“We have been in the mobile financial services software environment for seven years, and we have always looked at how we can position ourselves in the international market. The deal with Accenture gives us just the global situation we have been looking for,” says Fundamo head of business development Aletha Ling.
The demand for mobile wallets is starting to accelerate as a natural result of the deep penetration of mobile phones into communities around the world, she states.
The software has been through the new technology cycle of early adopters and test shaping, Ling explains. “The 2007 year showed that the technology has reached the growth curve and the time is right for adoption globally.”
According to Ling, the technology is being driven by the higher acceptance of the technology. “We are seeing a greater consumer need for financial services on mobile, especially in the emerging markets.”
She cites the need for migrant workers to be able to transfer part of their income into international accounts. “A Nigerian working in Johannesburg will want to send money home to his family. The mobile wallet allows just that kind of transfer among others.”
Infrastructure solution
The mobile wallet represents a transactional bank account that will be held by the mobile operators, she says. The mobile operators are given a packaged pilot solution. They also have the option of issuing a branded debit card with the account.
In terms of financial services regulations, Ling says each mobile operator or client is responsible for compliance.
Accenture says it will lead the promotion of mobile wallets worldwide in 2008, which will allow mobile network operators to deploy, operate and fine-tune the service. “Operators will also have the opportunity to test partnering relationships with a bank, prior to full-scale mobile wallet service deployment,” says Accenture`s mobile wallet lead Michael Eagleton.
“SA is already well served in the arena of mobile banking, and is not our essential target. We are looking at largely populated areas in emerging markets such as DRC, Uganda and Ghana, along with several countries in South America.”
A second application can be integrated as a mobile channel for the banks, says Ling. “Banks are faced with a problem of growing their client bases, with the huge financial implications of adding infrastructure – such as ATMs and branches – in under-serviced areas. The mobile phone allows them to use an infrastructure already in place, which is very enticing to banks in emerging markets.”
Participating financial service providers, mobile operators and clients will be announced at an official launch in Barcelona next month.
MOBILE BANKING
Mobile Banking vs. a Mobile Bank
The mobile bank versus mobile banking debate is still raging, but what are the real fundamental differences between the two and why is there so much noise around which is seemingly better?The two are vastly different. A mobile bank is essentially a new bank or product built around the understanding that the primary interaction with the bank will be through a mobile device.A mobile banking solution on the other hand is the evolutionary step after Internet banking. It is an additional service bolted on top of an existing solution - making access to services more immediate and reducing customer reliance on branch infrastructure or access to the Internet.Underpinning the debate is the question about the validity and longevity of mobile in general. Looking at worldwide statistics there can be no doubt that mobile is king. In South Africa alone more than 250 000 people interact with their bank via a mobile device - whether it be via mobile banking or a mobile bank. The real argument is what form banking via mobile devices will take - right now that is left to personal choice and market availability.In essence both are a different banking experience, guided by the provider and selected by the user, depending on the requirements of the individual and the availability of infrastructure wherever the solution is being offered.A mobile bank is by definition a new offering and thus unconstrained by existing infrastructure, pricing structures and product rules, allowing it to be optimised for a totally mobile experience.It is true of both mobile banks and mobile banking that the user doesn't need to go to a bank once either is implemented, but in an ideal mobile bank no interaction with bricks and mortar whatsoever should be needed, whereas a mobile banking solution may still require the user to enter a bank to set up an account or even manage changes to it. The one barrier to entry is whether or not customers have mobile phones, however, worldwide market penetration of cellular devices makes this almost a non-argument.In a mobile bank, the phone remains the primary transacting mechanism - it is the entry point for the user into the bank and the bank's entry point to the user. The benefits to the provider are numerous as it lessens the individual's dependency on the physical infrastructure and mobile transactions are less costly to facilitate and manage.At the end of the day it is all about the business case of the organisation and where emphasis is placed in the organisation. In traditional banking the interface is with a teller or an ATM. With Internet banking the primary interaction is with a PC. With mobile banking, the interface is through a cell phone. The case with a mobile bank then is simple - the phone becomes the branch and this model is thus very appealing to new financial service providers looking to get to market rapidly without the burden of physical infrastructure investments.Mobile banking is a means to reach a mass market, its popularity on the infrastructure constrained African continent and other emerging markets is evidence of this in itself. The form it takes is then more about the product, versus the channel. Traditional financial institutions are seeing mobile banking as a massive opportunity, and rightfully so, as it puts them in a position to innovate, where their services have previously been very similar. And while we have seen physical banks forming mobile banks, for example MTN Banking which is backed by Standard Bank, it is entirely feasible that in future, mobile banks, as yet unformed, may expand into the physical sphere.This may not be the answer that the debaters want to hear, but as is so often the case with technology, how you use it depends on what you aim to achieve. Either way, mobile financial transacting is the way of the future and there are few companies that are not considering this as an option. While we may squabble over who has the best solution, the user is merely interested in what is best suited to them from a convenience, access, and affordability point of view.ENDS About FundamoFundamo is a provider of a suite of mobile applications and business solutions for organisations wishing to do banking, payments and other transactions from mobile devices. These organisations include banks, mobile operators with banking aspirations and third party payment processors/switches. Fundamo targets international growth through quality business partnerships and resellers, including Gemplus, the global leader in the provision of smart cards, and global electronic funds transfer company Mosaic Software, an S1 company.Fundamo's suite of products enables person-to-person payments, payments for deliveries, airtime purchases, bill payments, retail payments, payments for virtual content, etc. The transactions offer immediacy, convenience, security, simplicity and affordability. Fundamo has provided solutions and supporting services to customers in a number of countries with sizeable customer bases and transactional volumes being processed on a daily basis. The company's customers processed well over 50 million payment transactions in 2005 and are experiencing significant month-on-month growth in their transaction volumes. Fundamo's major shareholders include Venfin and Sanlam.
The mobile bank versus mobile banking debate is still raging, but what are the real fundamental differences between the two and why is there so much noise around which is seemingly better?The two are vastly different. A mobile bank is essentially a new bank or product built around the understanding that the primary interaction with the bank will be through a mobile device.A mobile banking solution on the other hand is the evolutionary step after Internet banking. It is an additional service bolted on top of an existing solution - making access to services more immediate and reducing customer reliance on branch infrastructure or access to the Internet.Underpinning the debate is the question about the validity and longevity of mobile in general. Looking at worldwide statistics there can be no doubt that mobile is king. In South Africa alone more than 250 000 people interact with their bank via a mobile device - whether it be via mobile banking or a mobile bank. The real argument is what form banking via mobile devices will take - right now that is left to personal choice and market availability.In essence both are a different banking experience, guided by the provider and selected by the user, depending on the requirements of the individual and the availability of infrastructure wherever the solution is being offered.A mobile bank is by definition a new offering and thus unconstrained by existing infrastructure, pricing structures and product rules, allowing it to be optimised for a totally mobile experience.It is true of both mobile banks and mobile banking that the user doesn't need to go to a bank once either is implemented, but in an ideal mobile bank no interaction with bricks and mortar whatsoever should be needed, whereas a mobile banking solution may still require the user to enter a bank to set up an account or even manage changes to it. The one barrier to entry is whether or not customers have mobile phones, however, worldwide market penetration of cellular devices makes this almost a non-argument.In a mobile bank, the phone remains the primary transacting mechanism - it is the entry point for the user into the bank and the bank's entry point to the user. The benefits to the provider are numerous as it lessens the individual's dependency on the physical infrastructure and mobile transactions are less costly to facilitate and manage.At the end of the day it is all about the business case of the organisation and where emphasis is placed in the organisation. In traditional banking the interface is with a teller or an ATM. With Internet banking the primary interaction is with a PC. With mobile banking, the interface is through a cell phone. The case with a mobile bank then is simple - the phone becomes the branch and this model is thus very appealing to new financial service providers looking to get to market rapidly without the burden of physical infrastructure investments.Mobile banking is a means to reach a mass market, its popularity on the infrastructure constrained African continent and other emerging markets is evidence of this in itself. The form it takes is then more about the product, versus the channel. Traditional financial institutions are seeing mobile banking as a massive opportunity, and rightfully so, as it puts them in a position to innovate, where their services have previously been very similar. And while we have seen physical banks forming mobile banks, for example MTN Banking which is backed by Standard Bank, it is entirely feasible that in future, mobile banks, as yet unformed, may expand into the physical sphere.This may not be the answer that the debaters want to hear, but as is so often the case with technology, how you use it depends on what you aim to achieve. Either way, mobile financial transacting is the way of the future and there are few companies that are not considering this as an option. While we may squabble over who has the best solution, the user is merely interested in what is best suited to them from a convenience, access, and affordability point of view.ENDS About FundamoFundamo is a provider of a suite of mobile applications and business solutions for organisations wishing to do banking, payments and other transactions from mobile devices. These organisations include banks, mobile operators with banking aspirations and third party payment processors/switches. Fundamo targets international growth through quality business partnerships and resellers, including Gemplus, the global leader in the provision of smart cards, and global electronic funds transfer company Mosaic Software, an S1 company.Fundamo's suite of products enables person-to-person payments, payments for deliveries, airtime purchases, bill payments, retail payments, payments for virtual content, etc. The transactions offer immediacy, convenience, security, simplicity and affordability. Fundamo has provided solutions and supporting services to customers in a number of countries with sizeable customer bases and transactional volumes being processed on a daily basis. The company's customers processed well over 50 million payment transactions in 2005 and are experiencing significant month-on-month growth in their transaction volumes. Fundamo's major shareholders include Venfin and Sanlam.
MOBILE BANKING
Mobile Banking vs. a Mobile Bank
The mobile bank versus mobile banking debate is still raging, but what are the real fundamental differences between the two and why is there so much noise around which is seemingly better?The two are vastly different. A mobile bank is essentially a new bank or product built around the understanding that the primary interaction with the bank will be through a mobile device.A mobile banking solution on the other hand is the evolutionary step after Internet banking. It is an additional service bolted on top of an existing solution - making access to services more immediate and reducing customer reliance on branch infrastructure or access to the Internet.Underpinning the debate is the question about the validity and longevity of mobile in general. Looking at worldwide statistics there can be no doubt that mobile is king. In South Africa alone more than 250 000 people interact with their bank via a mobile device - whether it be via mobile banking or a mobile bank. The real argument is what form banking via mobile devices will take - right now that is left to personal choice and market availability.In essence both are a different banking experience, guided by the provider and selected by the user, depending on the requirements of the individual and the availability of infrastructure wherever the solution is being offered.A mobile bank is by definition a new offering and thus unconstrained by existing infrastructure, pricing structures and product rules, allowing it to be optimised for a totally mobile experience.It is true of both mobile banks and mobile banking that the user doesn't need to go to a bank once either is implemented, but in an ideal mobile bank no interaction with bricks and mortar whatsoever should be needed, whereas a mobile banking solution may still require the user to enter a bank to set up an account or even manage changes to it. The one barrier to entry is whether or not customers have mobile phones, however, worldwide market penetration of cellular devices makes this almost a non-argument.In a mobile bank, the phone remains the primary transacting mechanism - it is the entry point for the user into the bank and the bank's entry point to the user. The benefits to the provider are numerous as it lessens the individual's dependency on the physical infrastructure and mobile transactions are less costly to facilitate and manage.At the end of the day it is all about the business case of the organisation and where emphasis is placed in the organisation. In traditional banking the interface is with a teller or an ATM. With Internet banking the primary interaction is with a PC. With mobile banking, the interface is through a cell phone. The case with a mobile bank then is simple - the phone becomes the branch and this model is thus very appealing to new financial service providers looking to get to market rapidly without the burden of physical infrastructure investments.Mobile banking is a means to reach a mass market, its popularity on the infrastructure constrained African continent and other emerging markets is evidence of this in itself. The form it takes is then more about the product, versus the channel. Traditional financial institutions are seeing mobile banking as a massive opportunity, and rightfully so, as it puts them in a position to innovate, where their services have previously been very similar. And while we have seen physical banks forming mobile banks, for example MTN Banking which is backed by Standard Bank, it is entirely feasible that in future, mobile banks, as yet unformed, may expand into the physical sphere.This may not be the answer that the debaters want to hear, but as is so often the case with technology, how you use it depends on what you aim to achieve. Either way, mobile financial transacting is the way of the future and there are few companies that are not considering this as an option. While we may squabble over who has the best solution, the user is merely interested in what is best suited to them from a convenience, access, and affordability point of view.ENDS About FundamoFundamo is a provider of a suite of mobile applications and business solutions for organisations wishing to do banking, payments and other transactions from mobile devices. These organisations include banks, mobile operators with banking aspirations and third party payment processors/switches. Fundamo targets international growth through quality business partnerships and resellers, including Gemplus, the global leader in the provision of smart cards, and global electronic funds transfer company Mosaic Software, an S1 company.Fundamo's suite of products enables person-to-person payments, payments for deliveries, airtime purchases, bill payments, retail payments, payments for virtual content, etc. The transactions offer immediacy, convenience, security, simplicity and affordability. Fundamo has provided solutions and supporting services to customers in a number of countries with sizeable customer bases and transactional volumes being processed on a daily basis. The company's customers processed well over 50 million payment transactions in 2005 and are experiencing significant month-on-month growth in their transaction volumes. Fundamo's major shareholders include Venfin and Sanlam.
The mobile bank versus mobile banking debate is still raging, but what are the real fundamental differences between the two and why is there so much noise around which is seemingly better?The two are vastly different. A mobile bank is essentially a new bank or product built around the understanding that the primary interaction with the bank will be through a mobile device.A mobile banking solution on the other hand is the evolutionary step after Internet banking. It is an additional service bolted on top of an existing solution - making access to services more immediate and reducing customer reliance on branch infrastructure or access to the Internet.Underpinning the debate is the question about the validity and longevity of mobile in general. Looking at worldwide statistics there can be no doubt that mobile is king. In South Africa alone more than 250 000 people interact with their bank via a mobile device - whether it be via mobile banking or a mobile bank. The real argument is what form banking via mobile devices will take - right now that is left to personal choice and market availability.In essence both are a different banking experience, guided by the provider and selected by the user, depending on the requirements of the individual and the availability of infrastructure wherever the solution is being offered.A mobile bank is by definition a new offering and thus unconstrained by existing infrastructure, pricing structures and product rules, allowing it to be optimised for a totally mobile experience.It is true of both mobile banks and mobile banking that the user doesn't need to go to a bank once either is implemented, but in an ideal mobile bank no interaction with bricks and mortar whatsoever should be needed, whereas a mobile banking solution may still require the user to enter a bank to set up an account or even manage changes to it. The one barrier to entry is whether or not customers have mobile phones, however, worldwide market penetration of cellular devices makes this almost a non-argument.In a mobile bank, the phone remains the primary transacting mechanism - it is the entry point for the user into the bank and the bank's entry point to the user. The benefits to the provider are numerous as it lessens the individual's dependency on the physical infrastructure and mobile transactions are less costly to facilitate and manage.At the end of the day it is all about the business case of the organisation and where emphasis is placed in the organisation. In traditional banking the interface is with a teller or an ATM. With Internet banking the primary interaction is with a PC. With mobile banking, the interface is through a cell phone. The case with a mobile bank then is simple - the phone becomes the branch and this model is thus very appealing to new financial service providers looking to get to market rapidly without the burden of physical infrastructure investments.Mobile banking is a means to reach a mass market, its popularity on the infrastructure constrained African continent and other emerging markets is evidence of this in itself. The form it takes is then more about the product, versus the channel. Traditional financial institutions are seeing mobile banking as a massive opportunity, and rightfully so, as it puts them in a position to innovate, where their services have previously been very similar. And while we have seen physical banks forming mobile banks, for example MTN Banking which is backed by Standard Bank, it is entirely feasible that in future, mobile banks, as yet unformed, may expand into the physical sphere.This may not be the answer that the debaters want to hear, but as is so often the case with technology, how you use it depends on what you aim to achieve. Either way, mobile financial transacting is the way of the future and there are few companies that are not considering this as an option. While we may squabble over who has the best solution, the user is merely interested in what is best suited to them from a convenience, access, and affordability point of view.ENDS About FundamoFundamo is a provider of a suite of mobile applications and business solutions for organisations wishing to do banking, payments and other transactions from mobile devices. These organisations include banks, mobile operators with banking aspirations and third party payment processors/switches. Fundamo targets international growth through quality business partnerships and resellers, including Gemplus, the global leader in the provision of smart cards, and global electronic funds transfer company Mosaic Software, an S1 company.Fundamo's suite of products enables person-to-person payments, payments for deliveries, airtime purchases, bill payments, retail payments, payments for virtual content, etc. The transactions offer immediacy, convenience, security, simplicity and affordability. Fundamo has provided solutions and supporting services to customers in a number of countries with sizeable customer bases and transactional volumes being processed on a daily basis. The company's customers processed well over 50 million payment transactions in 2005 and are experiencing significant month-on-month growth in their transaction volumes. Fundamo's major shareholders include Venfin and Sanlam.
Friday, December 5, 2008
MOBILE BANKING AND PAYMENT SOLUTIONS
Fiserv Rolls Out All-in-One Mobile Banking and Payments Solution
Mobile Money supports consumers on three mobile access modes.
Fiserv, Inc. (Brookfield, Wis.) launched Mobile Money, a mobile banking and payments solution that supports consumers on all three mobile access modes " short messaging service, wireless application protocol and mobile application. Mobile Money also offers online and offline enrollment capabilities and integrates with core banking, online banking and electronic payments systems.
The new Fiserv solution builds upon the company's existing mobile banking solutions. According to Fiserv, Mobile Money allows financial institutions and billing organizations to drive enrollment of offline customers to a more profitable mobile banking relationship. Customer can enroll via mobile device, branch, ATM, contact center or online channel. Fiserv will provide marketing campaigns and research aimed at driving a high level of adoption and usage within this channel.
"Mobile banking holds great promise as a unique channel that offers customers the ability to manage their money anywhere, anytime, while enticing new customers and making existing customers more loyal," said James Van Dyke, president and founder of Javelin Strategy & Research. "We see 2008 as a pivotal year for the emergence of mobile banking and payments, particularly as more end-to-end, enterprise solutions start to take hold in the marketplace."
Financial institutions can deploy the Fiserv mobile banking and payments solution as a hosted solution or as software that can be managed and run in-house. The solution is available today via an in-house solution for the top 200 financial institutions. A hosted version will be available by mid-2009.
The Fiserv solution is powered by technology from M-Com Inc. (Auckland). Under their strategic partnership agreement, Fiserv and M-Com have established a joint product development center based in the Fiserv campus in Norcross, Ga.
Mobile Money supports consumers on three mobile access modes.
Fiserv, Inc. (Brookfield, Wis.) launched Mobile Money, a mobile banking and payments solution that supports consumers on all three mobile access modes " short messaging service, wireless application protocol and mobile application. Mobile Money also offers online and offline enrollment capabilities and integrates with core banking, online banking and electronic payments systems.
The new Fiserv solution builds upon the company's existing mobile banking solutions. According to Fiserv, Mobile Money allows financial institutions and billing organizations to drive enrollment of offline customers to a more profitable mobile banking relationship. Customer can enroll via mobile device, branch, ATM, contact center or online channel. Fiserv will provide marketing campaigns and research aimed at driving a high level of adoption and usage within this channel.
"Mobile banking holds great promise as a unique channel that offers customers the ability to manage their money anywhere, anytime, while enticing new customers and making existing customers more loyal," said James Van Dyke, president and founder of Javelin Strategy & Research. "We see 2008 as a pivotal year for the emergence of mobile banking and payments, particularly as more end-to-end, enterprise solutions start to take hold in the marketplace."
Financial institutions can deploy the Fiserv mobile banking and payments solution as a hosted solution or as software that can be managed and run in-house. The solution is available today via an in-house solution for the top 200 financial institutions. A hosted version will be available by mid-2009.
The Fiserv solution is powered by technology from M-Com Inc. (Auckland). Under their strategic partnership agreement, Fiserv and M-Com have established a joint product development center based in the Fiserv campus in Norcross, Ga.
MOBILE BANKING
Mobile banking in the Philippines: Interview with Globe Telecom’s Rizza Maniego-Eala
Globe Telecom is a leading mobile network operator in the Philippines and is working with CGAP to create ecosystems or mini-economies with multiple locations for people to transact with GCASH, their mobile banking service, via SMS messaging. Through intensive marketing, targeted customer education, and rapid sign-up and accreditation of retailers, the project will bring mobile phone-based payments and money transfer services for the first time to three predominantly low-income rural provinces. A total of 80,000 GCASH users in the three pilot provinces are expected to be reached, with greater success than would otherwise be possible without CGAP’s support. Rizza Maniego-Eala, President of G-Xchange, Inc, Globe’s wholly-owned subsidiary running its m-commerce business with its flagship service, GCASH, explained in a recent interview that this is just the latest in a series of innovative efforts by Globe to expand financial services using mobile phones.
How far would you say GCASH has evolved in terms of developing ecosystems for mobile commerce?Today, GCASH has over 6,000 domestic outlets in the Philippines servicing our 1.9 million GCASH subscribers. Recently we renewed our partnership with The Rural Bankers Association of the Philippines (RBAP) to further expand existing mobile phone banking services of rural banks. Using the GCASH payment platform and developed with RBAP’s Micro-enterprise Access to Banking Services (MABS) program, the convenience of mobile banking, many rural banks are using GCASH integrated into their operations benefiting the bank by being able to reach more clients and provide an additional channel for accessing the various financial services offered.
We’ve also begun a pilot transfer program for Filipinos in Hawaii, Singapore, Hong Kong and the United Arab Emirates that allows them to send Western Union mobile money transfers directly to friends and family who are GCASH subscribers in the Philippines. The cross-border service supports low-principal and high-frequency remittances at much lower rates.
Describe the importance of pricing for the lower income segment of the market.In the Philippines, the greater portion of the population lives at or below poverty line. In spite of this, there are over 60 million mobile phone subscribers and around 98% are on prepaid services. GCASH benefits the lower income segments because it reduces the transaction fees and costs to send and receive money. GCASH requires only a mobile phone and a one-time SMS-based registration, with a minimal charge of U$0.02 (P1.00) per transaction. Subscribers can do their transactions at home instead of traveling several kilometers to rural banks to pay or do their banking transactions.
For those of us who are less familiar with the Philippines, describe the importance of remittances to the country, as well as to your business.The Philippines received international remittances worth an estimated $16 billion (this year alone) constituting about 13% of our GDP. The continued growth of remittances to the Philippines plays an integral role in the strength of the financial sector and our economy as a whole. The Philippine domestic remittance profile is also growing although it is quite tough to find third party data estimating the size of this market. As both international and domestic remittances form a large part of our country’s economy, we continue to look ways in which GCASH can provide low-priced, secure and easily accessible solutions for our growing merchant partner-base and various consumer segments.
What are the benefits of GCASH to your partners on the ground – banking agents?GCASH is all about convenience and lower transaction costs. For partner establishments, GCASH has the potential of reducing costs and promoting efficiency. Since transactions are electronic, their processing capabilities are automated thereby reducing manual handling and potential reducing back office costs. The reduction of operating cost could translate to increased margins, better value passed on to our partners’ customers, or both. Utilizing GCASH to help in our partners’ automation and increased access to more customers requires almost zero capital expenditure on their part.
Globe Telecom is a leading mobile network operator in the Philippines and is working with CGAP to create ecosystems or mini-economies with multiple locations for people to transact with GCASH, their mobile banking service, via SMS messaging. Through intensive marketing, targeted customer education, and rapid sign-up and accreditation of retailers, the project will bring mobile phone-based payments and money transfer services for the first time to three predominantly low-income rural provinces. A total of 80,000 GCASH users in the three pilot provinces are expected to be reached, with greater success than would otherwise be possible without CGAP’s support. Rizza Maniego-Eala, President of G-Xchange, Inc, Globe’s wholly-owned subsidiary running its m-commerce business with its flagship service, GCASH, explained in a recent interview that this is just the latest in a series of innovative efforts by Globe to expand financial services using mobile phones.
How far would you say GCASH has evolved in terms of developing ecosystems for mobile commerce?Today, GCASH has over 6,000 domestic outlets in the Philippines servicing our 1.9 million GCASH subscribers. Recently we renewed our partnership with The Rural Bankers Association of the Philippines (RBAP) to further expand existing mobile phone banking services of rural banks. Using the GCASH payment platform and developed with RBAP’s Micro-enterprise Access to Banking Services (MABS) program, the convenience of mobile banking, many rural banks are using GCASH integrated into their operations benefiting the bank by being able to reach more clients and provide an additional channel for accessing the various financial services offered.
We’ve also begun a pilot transfer program for Filipinos in Hawaii, Singapore, Hong Kong and the United Arab Emirates that allows them to send Western Union mobile money transfers directly to friends and family who are GCASH subscribers in the Philippines. The cross-border service supports low-principal and high-frequency remittances at much lower rates.
Describe the importance of pricing for the lower income segment of the market.In the Philippines, the greater portion of the population lives at or below poverty line. In spite of this, there are over 60 million mobile phone subscribers and around 98% are on prepaid services. GCASH benefits the lower income segments because it reduces the transaction fees and costs to send and receive money. GCASH requires only a mobile phone and a one-time SMS-based registration, with a minimal charge of U$0.02 (P1.00) per transaction. Subscribers can do their transactions at home instead of traveling several kilometers to rural banks to pay or do their banking transactions.
For those of us who are less familiar with the Philippines, describe the importance of remittances to the country, as well as to your business.The Philippines received international remittances worth an estimated $16 billion (this year alone) constituting about 13% of our GDP. The continued growth of remittances to the Philippines plays an integral role in the strength of the financial sector and our economy as a whole. The Philippine domestic remittance profile is also growing although it is quite tough to find third party data estimating the size of this market. As both international and domestic remittances form a large part of our country’s economy, we continue to look ways in which GCASH can provide low-priced, secure and easily accessible solutions for our growing merchant partner-base and various consumer segments.
What are the benefits of GCASH to your partners on the ground – banking agents?GCASH is all about convenience and lower transaction costs. For partner establishments, GCASH has the potential of reducing costs and promoting efficiency. Since transactions are electronic, their processing capabilities are automated thereby reducing manual handling and potential reducing back office costs. The reduction of operating cost could translate to increased margins, better value passed on to our partners’ customers, or both. Utilizing GCASH to help in our partners’ automation and increased access to more customers requires almost zero capital expenditure on their part.
MOBILE BANKING-HELPS THE POOR
How banking on a mobile phone can help the poor
What's the most revolutionary cell phone in the world today? Hint: it's not Apple's new iPhone. It may not run iTunes or switch seamlessly to Wifi, but an ordinary, hand-me-down phone can be revolutionary (pdf) when used as a virtual bank. "Yawn," the gadget geeks will say—mobile payment options are old hat in places like Japan, where mobile phones linked to credit/debit cards have become as much a part of the culture as sushi. But mobile banking, or m-banking for short, is about more than just added convenience; it's about giving millions of poor people in developing countries access to financial services for the first time. And that could change the world.
The World Bank estimates that in many countries, over half the population—"the unbanked"—has never had a bank account. The poor tend to be terrified of banks, since they're often humiliated or ignored when they try to enter them. That means they can't leave their savings anywhere safe, pay a bill without walking the cash to the office, or prove that they're credit-worthy. Meanwhile, mobile phone penetration is through the roof, especially in Africa. In 2000, fewer than 8 million Africans had a mobile phone - now over 100 million do. That's one in nine. Now, anyone with access to a cell phone has a place to keep his or her savings without needing a traditional bank account. We won't see millionaires suddenly emerging from the shantytowns just because they're "banked," but even a small nest egg needs a safe resting place.
At the moment, enthusiasm for m-banking has outrun its implementation. For one thing, regulators break out in a cold sweat at the thought of all the overlapping issues involved. But there are success stories. Leading the way is the Philippines, with over 3.5 million users split between G-cash and competitor SMARTmoney. South Africa is the other heavyweight, with MTN Mobile Banking and Wizzit both entering their second year of operations. In Brazil, m-banking may even surpass Internet banking in just five years. And on January 22, SafariCom, partly owned by Vodafone, is set to expand its M-Pesa pilot to all of Kenya.
These telecom companies aren't offering m-banking out of the kindness of their hearts. They like m-banking because it's a way for them to attract new customers by doing what they already do well—processing millions of tiny transactions. Banks aren't as interested, because they don't expect to profit from poor clients who won't be taking out a mortgage anytime soon. But the telecoms could start siphoning away bank customers who don't need all the bells and whistles.
Remittances is where m-banking will really be world-changing. In Latin America, for instance, fewer than 10 percent of remittance recipients have bank accounts. That means they're hiking to Western Union to pick up their money, which cost somebody a 15 percent commission to send. In the Philippines, SMART's customers are already sending an estimated $50 million in remittances each month via their mobile phones, and that's only the tip of the iceberg. In most of the world, remittances account for more financial flows than foreign direct investment or foreign aid combined. Lowering transaction costs even one percent would mean over one billion extra dollars would directly reach the poor each year, and that's not chump change.
What's the most revolutionary cell phone in the world today? Hint: it's not Apple's new iPhone. It may not run iTunes or switch seamlessly to Wifi, but an ordinary, hand-me-down phone can be revolutionary (pdf) when used as a virtual bank. "Yawn," the gadget geeks will say—mobile payment options are old hat in places like Japan, where mobile phones linked to credit/debit cards have become as much a part of the culture as sushi. But mobile banking, or m-banking for short, is about more than just added convenience; it's about giving millions of poor people in developing countries access to financial services for the first time. And that could change the world.
The World Bank estimates that in many countries, over half the population—"the unbanked"—has never had a bank account. The poor tend to be terrified of banks, since they're often humiliated or ignored when they try to enter them. That means they can't leave their savings anywhere safe, pay a bill without walking the cash to the office, or prove that they're credit-worthy. Meanwhile, mobile phone penetration is through the roof, especially in Africa. In 2000, fewer than 8 million Africans had a mobile phone - now over 100 million do. That's one in nine. Now, anyone with access to a cell phone has a place to keep his or her savings without needing a traditional bank account. We won't see millionaires suddenly emerging from the shantytowns just because they're "banked," but even a small nest egg needs a safe resting place.
At the moment, enthusiasm for m-banking has outrun its implementation. For one thing, regulators break out in a cold sweat at the thought of all the overlapping issues involved. But there are success stories. Leading the way is the Philippines, with over 3.5 million users split between G-cash and competitor SMARTmoney. South Africa is the other heavyweight, with MTN Mobile Banking and Wizzit both entering their second year of operations. In Brazil, m-banking may even surpass Internet banking in just five years. And on January 22, SafariCom, partly owned by Vodafone, is set to expand its M-Pesa pilot to all of Kenya.
These telecom companies aren't offering m-banking out of the kindness of their hearts. They like m-banking because it's a way for them to attract new customers by doing what they already do well—processing millions of tiny transactions. Banks aren't as interested, because they don't expect to profit from poor clients who won't be taking out a mortgage anytime soon. But the telecoms could start siphoning away bank customers who don't need all the bells and whistles.
Remittances is where m-banking will really be world-changing. In Latin America, for instance, fewer than 10 percent of remittance recipients have bank accounts. That means they're hiking to Western Union to pick up their money, which cost somebody a 15 percent commission to send. In the Philippines, SMART's customers are already sending an estimated $50 million in remittances each month via their mobile phones, and that's only the tip of the iceberg. In most of the world, remittances account for more financial flows than foreign direct investment or foreign aid combined. Lowering transaction costs even one percent would mean over one billion extra dollars would directly reach the poor each year, and that's not chump change.
MOBILE BANKING GROWTH
Mobile Banking Is Still in Its Infancy
It is clear that mobile banking is still in its infancy, but what about future growth prospects? Our research reveals that consumers are significantly more likely to view mobile banking as “very useful” (23%) than “not at all useful” (12%) (see below). It is interesting to note that 28% of respondents currently appear to be indifferent towards mobile banking, neither citing the functionality as useful or not useful.
Many of these indifferent consumers are likely to demand mobile banking functionality once the technology and partnerships make the usability of this banking channel easier for the average consumer. One good example is a current Bank of America (BAC) promotion for free mobile banking to current online customers. The messaging promotes the accessibility, convenience, and security of mobile banking.
Financial institutions are investing heavily to build technological platforms and strategic partnerships to capitalize upon the growth of the mobile banking channel. We wanted to separate the hype from the reality by exploring one fundamental question: Is there really significant consumer demand for performing banking activities on a mobile device? The results of a recent survey targeted at online bankers illustrates that the mobile market, although still in its infancy, is poised for future growth.
One of the obvious drivers of mobile banking adoption is consumers having access to the internet from their mobile device. Our research indicates that 72% of online bankers never access the internet from their mobile device (see below). Mobile internet access will undoubtedly rise, as technology advances and “smart phone” adoption (Blackberry, iPhone, etc.) proliferates; however, if almost ¾ of online bankers never access the internet from a mobile device, how many people actually utilize mobile banking services? The answer is not many, as only 5% of online bankers currently use a mobile device to check a banking account.
One of the obvious drivers of mobile banking adoption is consumers having access to the internet from their mobile device. Our research indicates that 72% of online bankers never access the internet from their mobile device (see below). Mobile internet access will undoubtedly rise, as technology advances and “smart phone” adoption (Blackberry, iPhone, etc.) proliferates; however, if almost ¾ of online bankers never access the internet from a mobile device, how many people actually utilize mobile banking services? The answer is not many, as only 5% of online bankers currently use a mobile device to check a banking account.
It is clear that mobile banking is still in its infancy, but what about future growth prospects? Our research reveals that consumers are significantly more likely to view mobile banking as “very useful” (23%) than “not at all useful” (12%) (see below). It is interesting to note that 28% of respondents currently appear to be indifferent towards mobile banking, neither citing the functionality as useful or not useful.
Many of these indifferent consumers are likely to demand mobile banking functionality once the technology and partnerships make the usability of this banking channel easier for the average consumer. One good example is a current Bank of America (BAC) promotion for free mobile banking to current online customers. The messaging promotes the accessibility, convenience, and security of mobile banking.
MOBILE BANKING-BANK IN EVERY POCKET
Mobile banking
Nov 15th 2007 From The Economist print edition
THE idea that mobile phones bring economic benefits is now widely accepted. In places with bad roads, few trains and parlous land lines, they substitute for travel, allow price data to be distributed more quickly and easily, enable traders to reach wider markets and generally ease the business of doing business. Leonard Waverman of the London Business School has estimated that an extra ten mobile phones per 100 people in a typical developing country leads to an extra half a percentage point of growth in GDP per person. To realise the economic benefits of mobile phones, governments in such countries need to do away with state monopolies, issue new licences to allow rival operators to enter the market and slash taxes on handsets. With few exceptions (hallo, Ethiopia), they have done so, and mobile phones are now spreading fast, even in the poorest parts of the world.
As mobile phones have spread, a new economic benefit is coming into view: using them for banking (see article), and so improving access to financial services, not just telecoms networks. Pioneering m-banking projects in the Philippines, Kenya and South Africa show the way. These “branchless” schemes typically allow customers to deposit and withdraw cash through a mobile operator's airtime-resale agents, and send money to other people via text messages that can be exchanged for cash by visiting an agent. Workers can then be paid by phone; taxi-drivers and delivery-drivers can accept payments without carrying cash around; money can be easily sent to friends and family. A popular use is to deposit money before making a long journey and then withdraw it at the other end, which is safer than carrying lots of cash.…
Nov 15th 2007 From The Economist print edition
THE idea that mobile phones bring economic benefits is now widely accepted. In places with bad roads, few trains and parlous land lines, they substitute for travel, allow price data to be distributed more quickly and easily, enable traders to reach wider markets and generally ease the business of doing business. Leonard Waverman of the London Business School has estimated that an extra ten mobile phones per 100 people in a typical developing country leads to an extra half a percentage point of growth in GDP per person. To realise the economic benefits of mobile phones, governments in such countries need to do away with state monopolies, issue new licences to allow rival operators to enter the market and slash taxes on handsets. With few exceptions (hallo, Ethiopia), they have done so, and mobile phones are now spreading fast, even in the poorest parts of the world.
As mobile phones have spread, a new economic benefit is coming into view: using them for banking (see article), and so improving access to financial services, not just telecoms networks. Pioneering m-banking projects in the Philippines, Kenya and South Africa show the way. These “branchless” schemes typically allow customers to deposit and withdraw cash through a mobile operator's airtime-resale agents, and send money to other people via text messages that can be exchanged for cash by visiting an agent. Workers can then be paid by phone; taxi-drivers and delivery-drivers can accept payments without carrying cash around; money can be easily sent to friends and family. A popular use is to deposit money before making a long journey and then withdraw it at the other end, which is safer than carrying lots of cash.…
Saturday, November 22, 2008
MOBILE BANKING UPDATES
Mobile Banking Updates - Nov 16th
"Firethorn Introduces New Capabilities To Enhance Mobile Banking and Payments"
Leading mobile commerce enabler Firethorn Holdings, LLC, a Qualcomm company, today announced the introduction of its mobile application upgrade which will enable Firethorn to transition its financial institution and wireless operator relationships from banking to broader mobile commerce functionality.
"A Look at RBC's Mobex Mobile Payment Service"
In late September, RBC Royal Bank in Canada announced the launch of a trial of a text message-based mobile payment service called RBC Mobex. We recently heard from a colleague in Canada who's delighted with the service.
"Monilink reaches 1 million transactions in October"
Monitise's UK mobile banking service Monilink reveals it has processed over one million transactions during October, a 15 percent increase compared to the previous month.
"First Interstate - Mobile Banking Security Using SMS"
First Interstate Bank, a regional bank with 50 locations and 100 ATMs in Montana and Wyoming, has launched a mobile banking site at firstinterstate.mobi.
"mFoundry to Provide Mobile Banking & Payments Solutions to Zions Bancorporation"
Mobile financial services leader, mFoundry today announced that Zions Bancorporation has selected mFoundry's financial services platform to power its mobile banking and payments offerings."
Mobile Banking Updates - Nov 11th
Report: Smartphone Adoption Driving Growth of Mobile Banking"
Cell phones may have been invented as a means of carrying on voice conversations in an ultra-portable way, but today these devices have evolved into miniature computers of sorts, and are used for all kinds of fun and practical purposes, including playing games, listening to music, checking e-mail, sending text messages, and performing mobile banking tasks.
"Mobile Insecurity: Reality or Just hype?"
The increasing functionality and numbers of mobile banking platforms, the growing sophistication of criminals, and the popularity of smart cell phones create the potential for mobile banking security issues, but industry watchers have widely divergent opinions about how serious the threat really is.
"Go Mobile, Go Green"
According to a recent report by Javelin Strategy and Research, 75 percent of consumers still receive paper statements and about 34 percent pay by paper check. Thankfully, a new paperless method is available for reducing the amount of waste the average consumer generates: mobile banking.
"Mashreq unveils mobile banking service"
In keeping with the fast-paced lifestyle of the region, Mashreq Mobile Banking will provide customers secure and fully transactional access to their bank accounts through their mobile phones 24/7, from any GPRS / 3G / wireless (Wi-Fi) network, anywhere in the world."
"Firethorn Introduces New Capabilities To Enhance Mobile Banking and Payments"
Leading mobile commerce enabler Firethorn Holdings, LLC, a Qualcomm company, today announced the introduction of its mobile application upgrade which will enable Firethorn to transition its financial institution and wireless operator relationships from banking to broader mobile commerce functionality.
"A Look at RBC's Mobex Mobile Payment Service"
In late September, RBC Royal Bank in Canada announced the launch of a trial of a text message-based mobile payment service called RBC Mobex. We recently heard from a colleague in Canada who's delighted with the service.
"Monilink reaches 1 million transactions in October"
Monitise's UK mobile banking service Monilink reveals it has processed over one million transactions during October, a 15 percent increase compared to the previous month.
"First Interstate - Mobile Banking Security Using SMS"
First Interstate Bank, a regional bank with 50 locations and 100 ATMs in Montana and Wyoming, has launched a mobile banking site at firstinterstate.mobi.
"mFoundry to Provide Mobile Banking & Payments Solutions to Zions Bancorporation"
Mobile financial services leader, mFoundry today announced that Zions Bancorporation has selected mFoundry's financial services platform to power its mobile banking and payments offerings."
Mobile Banking Updates - Nov 11th
Report: Smartphone Adoption Driving Growth of Mobile Banking"
Cell phones may have been invented as a means of carrying on voice conversations in an ultra-portable way, but today these devices have evolved into miniature computers of sorts, and are used for all kinds of fun and practical purposes, including playing games, listening to music, checking e-mail, sending text messages, and performing mobile banking tasks.
"Mobile Insecurity: Reality or Just hype?"
The increasing functionality and numbers of mobile banking platforms, the growing sophistication of criminals, and the popularity of smart cell phones create the potential for mobile banking security issues, but industry watchers have widely divergent opinions about how serious the threat really is.
"Go Mobile, Go Green"
According to a recent report by Javelin Strategy and Research, 75 percent of consumers still receive paper statements and about 34 percent pay by paper check. Thankfully, a new paperless method is available for reducing the amount of waste the average consumer generates: mobile banking.
"Mashreq unveils mobile banking service"
In keeping with the fast-paced lifestyle of the region, Mashreq Mobile Banking will provide customers secure and fully transactional access to their bank accounts through their mobile phones 24/7, from any GPRS / 3G / wireless (Wi-Fi) network, anywhere in the world."
TAPPING YOUR CELL PHONE BY BOB SEGALL
Tapping Your Cell Phone by Bob Segall
Over the last few years you've probably been exposed to a great deal of information on the topic of mobile banking security, but the implications of what you're about to see are staggering.You can read the story Tapping Your Cell Phone by Bob Segall but I'd recommend that you watch the YouTube video to fully appreciate what's at stake.
Monday, October 20, 2008
MOBILE BANKING
Lance Drummond is the global consumer and small business banking e-commerce/ATM executive at Charlotte, N.C.-based Bank of America. Drummond manages the consumer online bank, which has more than 22 million subscribers and 11 million bill payers. He is responsible for growing online customer relationships, generating online sales and providing more-efficient processes that leverage the Internet. He also is responsible for delivering capabilities across the bank-owned network of more than 17,000 ATMs. Previously, Drummond was the service and fulfillment operations executive for Bank of America's global technology and operations.
Most wireless devices on the market are different from one another, and new technologies are being introduced faster than efforts to standardize.As banks search for new delivery channels for their products and services, mobile banking has come to the forefront as one of the leading candidates. Why? According to George Tubin of TowerGroup, in his November 2007 report "Bank of America Drives a Half-Million Customers to Web-Based Mobile Banking," "Approximately 213 million U.S. wireless subscribers have mobile Internet capability on their devices (about 86 percent of the 249 million total wireless subscribers)."
For customers, mobile banking offers improved and convenient access to their account balances and transactions. For banks, it offers a way to strengthen existing customer relationships and expand into more-profitable areas, such as payment and trading revenue. For others in remote locations with bad roads and/or inaccessible landlines, it substitutes for travel to the local branch, access to personal accounts and the marketplace, and an easier way of doing business overall. For these reasons and others, TowerGroup reports in the same study, "By year-end 2008, 100 percent of the top 10 banks in the United States will launch a mobile banking platform."
An Embraced Technology
At Bank of America, we began investigating the viability of mobile banking as early as 2005. Based on a favorable evaluation, we decided to move forward with the development and launched our first mobile banking platform nationally in May 2007.
To better manage costs and include as many customers as possible, we opted to develop an in-house mobile browser as our technology solution. The choice turned out to be a good one. Within the first six months, we had secured more than 500,000 active users, and that number has since increased to more than 1 million users as of early July 2008.
Nationwide, mobile banking is being widely adopted across the Bank of America footprint. Metro locales that skew toward high mobile phone usage rank among the fastest adopters of Bank of America's mobile banking service (see table). Almost all of our mobile banking customers use the service to view account balances, eight in 10 review transactions, while four in 10 use their handhelds to transfer funds or pay bills. Two-thirds of our mobile bankers are under 35 years old, and four out of five are under 45 years old, as Gen Y and Gen X consumers who have embraced mobile Web technology are similarly driving mobile banking usage. Frequency of use by our active users continues to increase monthly, with more than 4 million account sessions in May 2008 alone.
In hindsight, it's not overly surprising that mobile banking was so quickly embraced. Certainly, with all the wireless users in the United States, the potential market was there -- we just had to figure out how to tap it. Customers enjoy the freedom of using their wireless devices anytime and anywhere, and they seem genuinely pleased to experience 24/7 accessibility to their account balances and transactions. Moreover, it offers a great alternative to those customers who reside in remote areas, where a mobile platform offers a better alternative than a fixed line.
At the same time, our institution has also benefited from the mobile banking channel. We have found that it has helped deepen our customer relationships due to the added value our service provides. We strongly believe this level of service will be hard to duplicate elsewhere and will be a key differentiator in helping us retain customers going forward. As we further develop our mobile banking channel, we also anticipate leveraging it for greater product opportunities.
Not Without Peril
Our initial successes did not come without difficulty. We spent a great deal of time wrestling with a number of technological, cultural and marketing-related issues. To illustrate this point, here are some of the key lessons we learned and the challenges we have yet to face going forward:
Information Security. Perhaps the biggest challenge in mobile banking is protecting a customer's financial information over the air and on handheld devices. For example, a secure mobile banking infrastructure requires (1) security for the handheld device, (2) security for the application running on the device, (3) authentication of the device with the service provider before initiating a transaction, (4) ID/password authentication of the customer, (5) encryption of the data being transmitted over the air, and (6) encryption of the data that will be stored in the device for later review by the customer. Clearly, it is a complex process. At Bank of America, we use a number of security technologies (key among them, SiteKey) to provide security via the mobile channel, so that accessing online banking via one's home computer, work computer or mobile phone is consistent -- and just as secure.
SiteKey uses a two-step process that clearly identifies both the customer and the bank when accessing online banking. First, the bank uniquely identifies the customer's device (in this case, a mobile phone) or, if using an unrecognized device, prompts the customer to go through additional security steps (such as security questions). Once the bank has established the customer's identity, it will present an image and phrase (previously selected by the customer) to identify the bank to that customer. The point is to help reassure customers that access to their accounts will be secure and well protected, and that their personal information will remain private and confidential.
Device Fragmentation. Another major challenge is connecting to multiple devices. Most wireless devices on the market are different from one another, and new technologies are being introduced faster than efforts to standardize (see Figure 1). To address this issue, developers worldwide have joined forces to build a community around a shared repository of device capability information, called WURFL (the Wireless Universal Resource File).
WURFL is a configuration file that contains information about the capabilities and the features of all wireless devices. By using WURFL, we can develop content pages using abstractions of page elements which, at run time, are converted to the appropriate, specific markup types for each device (see Figure 2). In short, WURFL helps us identify the capabilities of each device so we can serve different content to different devices dynamically. However, WURFL is not a stand-alone solution. It is still critical to work closely with the wireless operators to address a wide range of technology and security challenges.
Scalability and Reliability. A third challenge we found is creating a platform that balances reach and richness. While some technologies (such as SMS) offer extensive reach, they have other limitations. Other technologies offer a richer experience for customers, but limit the number of customers who can actually use it. Finally, any technology introduced has to be up and running in a true 24/7 fashion, effectively managed and maintained, and able to support potential growth in the years ahead. As more and more customers begin to rely on mobile banking, their expectations should increase proportionally. Banks unable to meet these performance and reliability expectations may lose customer confidence and, in turn, negatively impact customer retention.
Latency and Network Interruptions. One particularly interesting challenge we faced was addressing the issues around connectivity. Mobile Web connections are usually slower than broadband connections -- by as much as 10 seconds -- even after reducing some of the clutter normally found on Web pages. Fortunately, we found that customers were good about accepting a 10-second refresh interval. We were also initially concerned about addressing the potential loss of connectivity in the middle of a transaction. For example, is the information simply lost, or should it be cached locally and then uploaded when the network becomes available? However, this concern became a non-issue over time because we found that customers were not experiencing dropped connections.
Staff Training. Any newly introduced technology is bound to cause some confusion for customers, so it is critical to have well-trained customer service associates on hand who can help smooth out the process. At Bank of America, we trained our associates in all areas of mobile banking and actively encouraged them to use the technology so they could fully understand the concerns of our customers. Through this hands-on, personal experience, we were able to more effectively address customer queries.
Customer Marketing. Our mobile banking marketing activities were sparse in the early stages of the rollout -- primarily to work out the bugs in the technology, reduce the number of potential questions they would raise and minimize any negative impact on customers. We first conducted a series of internal pilots to test the new channel and then, in March 2007, rolled out a pilot to a limited number of bank customers. After making some adjustments, we did our full launch two months later. Only after all the major bugs had been worked out did we aggressively start targeting customers via traditional marketing methods, such as advertising in branches and cross-selling through the Web, online banking and mobile operators.
Cost of Investment. Another key concern while developing a mobile banking solution is keeping costs down. With more than 25 million online customers at Bank of America, integrating a third-party solution was simply not a realistic option for us. Instead, we relied on our internal technical team to build, deploy and maintain our mobile banking platform. While we personally found this method to be a cost-effective alternative, it may not offer the best solution for smaller institutions with a limited amount of internal resources.
Future Opportunities: Over the long term, we see a wide range of opportunities that have yet to be pursued. The first is how best to upgrade mobile banking applications going forward. Due to the nature of the connectivity between customers and the bank, it would be unrealistic to expect customers to visit a branch or connect to the Web to upgrade their mobile banking application. Rather, it would be more practical for the mobile application itself to download any necessary patches in a way that is transparent to the customer. However, there are many technical issues that will have to be explored surrounding this approach, such as determining when to distribute upgrades, synchronizing dependent components and more.
Another expected hurdle is exploring ways to personalize the mobile banking application. As customers begin to trust and use the application more robustly, it is likely that they will expect it to eventually support a number of personalized features, such as a preferred language, date/time formats, different currencies, default transactions, alerts and more. Accordingly, we will need to consider how to customize the application to meet the specific needs of our customers.
A final challenge will be to develop new ways to fully leverage the benefits of the mobile banking technology itself. Ideally, the technology should represent the ability for customers to interact with their bank in real time, including receiving immediate account updates, conducting transactions or making last-minute payments. In short, the technology should allow customers to do things they cannot currently do online and it will need to be advanced in that direction going forward.
Lessons Learned
The introduction of mobile banking at Bank of America has been both exciting and rewarding. It was not an easy road to travel -- we faced a host of challenges as we navigated through virtually uncharted territory. In just two short years, we had to develop an understanding of the mobile banking market, carefully weigh the risks and rewards, build a successful mobile banking platform and support it going forward. Most importantly, we had to do all of this without eroding our core customer base.
We also had to make sure that our substantial investment of time, energy and resources in mobile banking would eventually pay off. While it is too early in the process for us to measure the full value of our platform, we have already witnessed its wide acceptance by our customers, and that should serve as a stepping-stone for us to realize even greater value in the future. However, until mobile banking transforms into customers authorizing mobile payments and interchange via their wireless devices, we might not see significant revenues being generated.
In the meantime, we are slowly and carefully rolling out mobile banking so that both our customers and our institution grow comfortable with its use. Are we on the right path? We like to think so and, judging by the growth in our user base, our customers seem to agree with this assessment.
Lance Drummond is the global consumer and small business banking e-commerce/ATM executive at Charlotte, N.C.-based Bank of America. Drummond manages the consumer online bank, which has more than 22 million subscribers and 11 million bill payers. He is responsible for growing online customer relationships, generating online sales and providing more-efficient processes that leverage the Internet. He also is responsible for delivering capabilities across the bank-owned network of more than 17,000 ATMs. Previously, Drummond was the service and fulfillment operations executive for Bank of America's global technology and operations.
Fastest Metro-Locale Adopters of Bank of America Mobile Banking Service
1. Los Angeles
2. Atlanta
3. Washington, D.C.
4. Dallas
5. New York
6. Houston
7. Phoenix
8. Boston
9. Miami
10. Anaheim
Most wireless devices on the market are different from one another, and new technologies are being introduced faster than efforts to standardize.As banks search for new delivery channels for their products and services, mobile banking has come to the forefront as one of the leading candidates. Why? According to George Tubin of TowerGroup, in his November 2007 report "Bank of America Drives a Half-Million Customers to Web-Based Mobile Banking," "Approximately 213 million U.S. wireless subscribers have mobile Internet capability on their devices (about 86 percent of the 249 million total wireless subscribers)."
For customers, mobile banking offers improved and convenient access to their account balances and transactions. For banks, it offers a way to strengthen existing customer relationships and expand into more-profitable areas, such as payment and trading revenue. For others in remote locations with bad roads and/or inaccessible landlines, it substitutes for travel to the local branch, access to personal accounts and the marketplace, and an easier way of doing business overall. For these reasons and others, TowerGroup reports in the same study, "By year-end 2008, 100 percent of the top 10 banks in the United States will launch a mobile banking platform."
An Embraced Technology
At Bank of America, we began investigating the viability of mobile banking as early as 2005. Based on a favorable evaluation, we decided to move forward with the development and launched our first mobile banking platform nationally in May 2007.
To better manage costs and include as many customers as possible, we opted to develop an in-house mobile browser as our technology solution. The choice turned out to be a good one. Within the first six months, we had secured more than 500,000 active users, and that number has since increased to more than 1 million users as of early July 2008.
Nationwide, mobile banking is being widely adopted across the Bank of America footprint. Metro locales that skew toward high mobile phone usage rank among the fastest adopters of Bank of America's mobile banking service (see table). Almost all of our mobile banking customers use the service to view account balances, eight in 10 review transactions, while four in 10 use their handhelds to transfer funds or pay bills. Two-thirds of our mobile bankers are under 35 years old, and four out of five are under 45 years old, as Gen Y and Gen X consumers who have embraced mobile Web technology are similarly driving mobile banking usage. Frequency of use by our active users continues to increase monthly, with more than 4 million account sessions in May 2008 alone.
In hindsight, it's not overly surprising that mobile banking was so quickly embraced. Certainly, with all the wireless users in the United States, the potential market was there -- we just had to figure out how to tap it. Customers enjoy the freedom of using their wireless devices anytime and anywhere, and they seem genuinely pleased to experience 24/7 accessibility to their account balances and transactions. Moreover, it offers a great alternative to those customers who reside in remote areas, where a mobile platform offers a better alternative than a fixed line.
At the same time, our institution has also benefited from the mobile banking channel. We have found that it has helped deepen our customer relationships due to the added value our service provides. We strongly believe this level of service will be hard to duplicate elsewhere and will be a key differentiator in helping us retain customers going forward. As we further develop our mobile banking channel, we also anticipate leveraging it for greater product opportunities.
Not Without Peril
Our initial successes did not come without difficulty. We spent a great deal of time wrestling with a number of technological, cultural and marketing-related issues. To illustrate this point, here are some of the key lessons we learned and the challenges we have yet to face going forward:
Information Security. Perhaps the biggest challenge in mobile banking is protecting a customer's financial information over the air and on handheld devices. For example, a secure mobile banking infrastructure requires (1) security for the handheld device, (2) security for the application running on the device, (3) authentication of the device with the service provider before initiating a transaction, (4) ID/password authentication of the customer, (5) encryption of the data being transmitted over the air, and (6) encryption of the data that will be stored in the device for later review by the customer. Clearly, it is a complex process. At Bank of America, we use a number of security technologies (key among them, SiteKey) to provide security via the mobile channel, so that accessing online banking via one's home computer, work computer or mobile phone is consistent -- and just as secure.
SiteKey uses a two-step process that clearly identifies both the customer and the bank when accessing online banking. First, the bank uniquely identifies the customer's device (in this case, a mobile phone) or, if using an unrecognized device, prompts the customer to go through additional security steps (such as security questions). Once the bank has established the customer's identity, it will present an image and phrase (previously selected by the customer) to identify the bank to that customer. The point is to help reassure customers that access to their accounts will be secure and well protected, and that their personal information will remain private and confidential.
Device Fragmentation. Another major challenge is connecting to multiple devices. Most wireless devices on the market are different from one another, and new technologies are being introduced faster than efforts to standardize (see Figure 1). To address this issue, developers worldwide have joined forces to build a community around a shared repository of device capability information, called WURFL (the Wireless Universal Resource File).
WURFL is a configuration file that contains information about the capabilities and the features of all wireless devices. By using WURFL, we can develop content pages using abstractions of page elements which, at run time, are converted to the appropriate, specific markup types for each device (see Figure 2). In short, WURFL helps us identify the capabilities of each device so we can serve different content to different devices dynamically. However, WURFL is not a stand-alone solution. It is still critical to work closely with the wireless operators to address a wide range of technology and security challenges.
Scalability and Reliability. A third challenge we found is creating a platform that balances reach and richness. While some technologies (such as SMS) offer extensive reach, they have other limitations. Other technologies offer a richer experience for customers, but limit the number of customers who can actually use it. Finally, any technology introduced has to be up and running in a true 24/7 fashion, effectively managed and maintained, and able to support potential growth in the years ahead. As more and more customers begin to rely on mobile banking, their expectations should increase proportionally. Banks unable to meet these performance and reliability expectations may lose customer confidence and, in turn, negatively impact customer retention.
Latency and Network Interruptions. One particularly interesting challenge we faced was addressing the issues around connectivity. Mobile Web connections are usually slower than broadband connections -- by as much as 10 seconds -- even after reducing some of the clutter normally found on Web pages. Fortunately, we found that customers were good about accepting a 10-second refresh interval. We were also initially concerned about addressing the potential loss of connectivity in the middle of a transaction. For example, is the information simply lost, or should it be cached locally and then uploaded when the network becomes available? However, this concern became a non-issue over time because we found that customers were not experiencing dropped connections.
Staff Training. Any newly introduced technology is bound to cause some confusion for customers, so it is critical to have well-trained customer service associates on hand who can help smooth out the process. At Bank of America, we trained our associates in all areas of mobile banking and actively encouraged them to use the technology so they could fully understand the concerns of our customers. Through this hands-on, personal experience, we were able to more effectively address customer queries.
Customer Marketing. Our mobile banking marketing activities were sparse in the early stages of the rollout -- primarily to work out the bugs in the technology, reduce the number of potential questions they would raise and minimize any negative impact on customers. We first conducted a series of internal pilots to test the new channel and then, in March 2007, rolled out a pilot to a limited number of bank customers. After making some adjustments, we did our full launch two months later. Only after all the major bugs had been worked out did we aggressively start targeting customers via traditional marketing methods, such as advertising in branches and cross-selling through the Web, online banking and mobile operators.
Cost of Investment. Another key concern while developing a mobile banking solution is keeping costs down. With more than 25 million online customers at Bank of America, integrating a third-party solution was simply not a realistic option for us. Instead, we relied on our internal technical team to build, deploy and maintain our mobile banking platform. While we personally found this method to be a cost-effective alternative, it may not offer the best solution for smaller institutions with a limited amount of internal resources.
Future Opportunities: Over the long term, we see a wide range of opportunities that have yet to be pursued. The first is how best to upgrade mobile banking applications going forward. Due to the nature of the connectivity between customers and the bank, it would be unrealistic to expect customers to visit a branch or connect to the Web to upgrade their mobile banking application. Rather, it would be more practical for the mobile application itself to download any necessary patches in a way that is transparent to the customer. However, there are many technical issues that will have to be explored surrounding this approach, such as determining when to distribute upgrades, synchronizing dependent components and more.
Another expected hurdle is exploring ways to personalize the mobile banking application. As customers begin to trust and use the application more robustly, it is likely that they will expect it to eventually support a number of personalized features, such as a preferred language, date/time formats, different currencies, default transactions, alerts and more. Accordingly, we will need to consider how to customize the application to meet the specific needs of our customers.
A final challenge will be to develop new ways to fully leverage the benefits of the mobile banking technology itself. Ideally, the technology should represent the ability for customers to interact with their bank in real time, including receiving immediate account updates, conducting transactions or making last-minute payments. In short, the technology should allow customers to do things they cannot currently do online and it will need to be advanced in that direction going forward.
Lessons Learned
The introduction of mobile banking at Bank of America has been both exciting and rewarding. It was not an easy road to travel -- we faced a host of challenges as we navigated through virtually uncharted territory. In just two short years, we had to develop an understanding of the mobile banking market, carefully weigh the risks and rewards, build a successful mobile banking platform and support it going forward. Most importantly, we had to do all of this without eroding our core customer base.
We also had to make sure that our substantial investment of time, energy and resources in mobile banking would eventually pay off. While it is too early in the process for us to measure the full value of our platform, we have already witnessed its wide acceptance by our customers, and that should serve as a stepping-stone for us to realize even greater value in the future. However, until mobile banking transforms into customers authorizing mobile payments and interchange via their wireless devices, we might not see significant revenues being generated.
In the meantime, we are slowly and carefully rolling out mobile banking so that both our customers and our institution grow comfortable with its use. Are we on the right path? We like to think so and, judging by the growth in our user base, our customers seem to agree with this assessment.
Lance Drummond is the global consumer and small business banking e-commerce/ATM executive at Charlotte, N.C.-based Bank of America. Drummond manages the consumer online bank, which has more than 22 million subscribers and 11 million bill payers. He is responsible for growing online customer relationships, generating online sales and providing more-efficient processes that leverage the Internet. He also is responsible for delivering capabilities across the bank-owned network of more than 17,000 ATMs. Previously, Drummond was the service and fulfillment operations executive for Bank of America's global technology and operations.
Fastest Metro-Locale Adopters of Bank of America Mobile Banking Service
1. Los Angeles
2. Atlanta
3. Washington, D.C.
4. Dallas
5. New York
6. Houston
7. Phoenix
8. Boston
9. Miami
10. Anaheim
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