Banking the "Un-banked" - Could those without existing bank accounts be the early adopters of mobile banking

There are three key waves coming from the banks, writes Elena Malykhina in her post "Three Mobile Banking Developments To Keep Your Eye On" on the Information Week Web log -

1. Mobile banking, which uses mobile devices for self-service functions. Several major banks, including Citibank, Wachovia, and Bank of America, have launched mobile applications that will allow customers to view their account balances, pay bills, transfer money, and even call customer service reps with one click -- all using a cell phone or smartphone.

2. Contactless payments, which enables cell phones to be used as payment devices instead of credit cards. As a separate effort, top credit card issuers MasterCard and Visa are paving the way for "contactless" payments, where cell phones serve as electronic wallets for purchases that can be made at CVS, McDonald's, and many other retailers. The phones use Near Field Communication, or NFC, a wireless technology for short-range communications between electronic devices.

3. Mobile marketing, which includes things such as loyalty programs, ads, and electronic coupons. MasterCard plans to offer rewards and special offers via text messages that customers can redeem when they visit stores, as an incentive for using its mobile services. Similarly, Visa will provide customers with electronic coupons on their cell phones as part of its payment-related services. Other companies have similar mobile marketing efforts under way.

In my opinion - another key area to look out for is - Banking the unbanked using the mobile account!

The time for mobile banking has finally arrived. Most banks realise and appreciate that they can not ignore this channel for the simple reason that the number of mobile phones far outstrip the number of active Internet users and they can see the business case. However, their struggle with getting banking customers to get online is making them wary of adopting this "new" e-channel.

You don't carry your Internet in your pocket - but you do carry your hand phone. Irrespective of age the mobile phone is becoming a part of one's life. From this extension the banks and some carriers are now looking at reaching out to potential customers who may not even have a bank account. This is one area where mobile banking is sure to succeed - Banking the unbanked - provided we can find the right business model to do so.

Mobile Banking could drive data protection on lost / stolen phones

Just came across news that AT&T’s Cingular wireless has taken the plunge into Mobile banking. Check out the post titled "AT&T Planning Mobile Banking" dated 27th Mar 07 by Bruce Meyerson. Wachovia Corp., Regions Financial Corp., SunTrust Banks Inc. and BancorpSouth Inc. will enable AT&T customers who bank with those companies to use their cell phones to check account balances, transfer funds between accounts and pay bills.

However what caught my attention was not the mobile banking bit – but the part about data deletion in case of lost phones. To use the new service on an existing AT&T mobile phone, customers will need to download a program. AT&T plans to begin embedding software on new handsets starting in the second half of 2007. The application downloads account and bill information to the handset, so users will be able to view account balances, transfer funds, and receive and pay bills when their devices are not connected to AT&T's mobile Internet service. If a device is lost or stolen, the data can be remotely cleared from the device.

There is a growing use of this kind of a facility (for remote data deletion) – but the early adopters of this would be applications of mobile handsets in situations that involve sensitive, personal or commercially exploitable (e.g. account and bill information) information.

Security Issues Continue To Shake Up Handhelds

As mobile phones become more computer-like, they're becoming more vulnerable to digital maladies that have long afflicted desktop PCs and laptops writes PAUL KORZENIOWSKI in his article FOR INVESTOR'S BUSINESS DAILY. He has talked about mobile phone viruses - Liberty Trojan horse (Palm), Phage.936 virus (Palm), Troj/Delf-HA Trojan horse (sends out the spam via SMS messages), Backdoor.Brador.A (Microsoft's Windows CE) and hackers increasing interest in handheld systems.

Security vendors and mobile operators are now getting their act together to address mobile security issues. Security market leaders such as McAfee, Symantec, Trend Micro and VeriSign and Wireless carriers like Sprint in the US, Wataniya in Kuwait, Mobinil in Egypt, b.mobile in Brunei, Celcom in Malaysia, Excel comindo in Indonesia see mobile security as a revenue opportunity.

Sprint has developed Sprint Mobile Security, which includes data encryption and a variety of endpoint defense tools. Celcom recently launched Secret SMS service to prevent spoofing / data disclosure of SMS messages on unattanded or lost phones. Other phone operators are contemplating release of innovative mobile security services that provide alerts when users lose their phones and even allow remote deletion of data on lost / stolen handsets.

Data Security on the hand phone! who gives a damn?

To begin with let me post a most basic question first and then try to answer it from my perspective. I would then like to invite some of the executives whom I have met - from among users, government agencies, enterprise users, telecom operators, handset manufacturers, value added service providers, security companies, application developers & aggregators and banks looking at m-banking and m-commerce - to look at it from their perspective?

Does a “user” care about security of data on his / her hand phone?

Some of the guys when asked if they care about security of data or told about a new product that helps secure SMS messages for instance went on to ask what is the threat to SMS messages? They do not perceive the threat!

But is there a real threat? A normal Joe using texting for interacting with friends and family does not basically know whether there is a threat to him / her if SMS messages fall into wrong hands or are spoofed. When users were explained that data security and privacy is considered breached even if some one say browses through their mobile phone when they have left it at their desk at office by mistake, they almost unanimously agreed that they would not be happy about it. One of the mobile operator when looking at mobile security/ SMS security product to be rolled out as a service even went so far as to confirm that they know 2 person in their office at this moment who have a habit of doing that. When I have asked a number of people the question – “What data on your handset would be your biggest worry if you say lost a phone or had your phone stolen?” Contacts, SMS Messages, images and in some cases video clips appear to be the biggest areas of concern. What are your big concerns when you lose your hand set???

My answer would be “Yes” users do care about security of data on their hand phones. Some or rather most of them may not have thought of it till they are asked or till they suffer a breach – someone snoops in on their data or they lose a phone. What do you say?