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Mobile banking – the future of banking
The way businesses are conducted in the
financial sector revolutionised after
internet came into existence. With the
help of the internet, business owners
came up with new models for their
businesses. Also, newer methods were
invented so that they could offer
non-stop services to their consumers.
With the possibility of conducting
financial transactions over the
internet, many new players came into
existence such as online brokers and
online banks. Mobile devices such as
smart phones have become the most
promising method for businesses to reach
out to their customers because of their
ability to provide services anywhere and
anytime. Moreover, these mobile devices
not only have high penetration rates but
also high potential for growth which has
made it a force to recon with in the
banking sector. Business models for
mobile banking depend upon banking
agents such as the postal or retail
outlets for processing financial
transactions in the place of banks.
Banking agents play a vital role in
business models for mobile banking since
cash management, service quality and
customer care rely on them.
Mobile banking models can be classified
into three main categories –
-
Non-bank led models
-
Bank-led models
-
Bank focussed models
The Bank focussed model is obtained when
traditional banks use low cost
non-traditional channels for providing
banking related services to the existing
consumers. Examples of bank focussed
models include ATM or automatic teller
machines, mobile phone banking or online
banking to offer limited services to the
consumers.
The Bank-led model is an alternative to
the traditional branch-based banks,
through which consumers conduct
financial transactions through mobile
phones or retail agents in the place of
bank branches or through bank
executives. This model has the potential
to increase the reach of financial
services by utilising different delivery
channels like mobile phones or retail
agents, different trader partners such
as telcos or chain stores, and is also
cheaper when compare to other bank-based
alternatives.
Non-bank led models is a type of model
where banks are nowhere in the picture
and all the functions are performed by
non-banks such as telcos.
The fastest growing sector is mobile
banking which may replace debit/credit
card system in the near future.
Moreover, mobile banking helps in
reducing costs for transactions.
The total number of people who use
mobile is much more than the number of
people who use the internet. Hence, it
is essential to take measures so that
this medium is safeguarded while
financial transactions are carried out.
Certain systems need to be in place to
ensure security so that this medium is
safe for e-banking. Techniques such as
phone-loch function on the mobile
handset, setting up hard-to-crack
passwords, and secure phone
configuration should be used which will
ensure security. Moreover, the e-mail
software and web browser should also be
configured such that security is not
breached. It is essential to keep mobile
phones updated with the most recent
updates and patches including using
software such as anti-virus which will
keep unwanted troubles at bay. |
