Mobile Banking: A Boon for Unbanked
The advent of Internet has revolutionized the financial services industry, empowering organizations with new business models and alternatves to offer 24X7 accessibility to their customers. The ability to online financial transactions has also created new players in the financial services industry, such as online banks, online brokers and wealth managers who offer personalized services. People are mobile-savvy, and are always ready to try out advanced hand-sets and services. Mobile banking also saves the time and effort of going to the bank, standing in queues, etc. According to a Business Standard survey, one out of every three persons was ready to change his/her banks to avail free mobile banking services. Around 50 percent of the people who were surveyed used cell phones to check their bank balance. Awareness of mobile banking is also high in India. Although such players still account for a tiny percentage of the industry, it is the latest in customer convenience in banking, to access and operate your bank account from anywhere from your cell phone. This is available on advance technology phones. One can access bank account through SMS or scripting languages like XML, HTML, SOAP and WAP. Mobile banking and ATMs use the same infrastructure.
In the recent past, banks across the globe have invested billions of dollars to build sophisticated internet banking capabilities. As the trend is shifting to mobile banking, there is a challenge for CIOs and CTOs of these banks to decide on how to leverage their investment in internet banking and offer mobile banking, in the shortest possible time. According to Financial Consultancy Celent study, 35 per cent of online banking households will be using mobile banking by 2010, up from less than 1 per cent today. Upwards of 70 per cent of bank center call volume is projected to come from mobile phones. Mobile banking will eventually allow users to make payments at the physical point of sale. "Mobile contactless payments" will make up 10 per cent of the contactless market by 2010.
Mobile Banking or M-Banking, m-banking, SMS banking, etc., is a term used for performing balance checks, account transactions, payments, etc., via a mobile device such as a mobile phone. Mobile banking today is most often performed via SMS or the Mobile Internet but can also use special programs clients download to the mobile device. The mobile acts as a branch of the bank by storing a database of customers. It also has a smartcard, which biometrically stores the identity of the customer such as name, address, photograph, fingerprint templates and relevant details of the savings or loan accounts held by the issuing bank. Acadamically, mobile banking is defined as: -
"A provision and availment of banking and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts, and to access customised information."
Apparantly, Mobile Banking can be said to consist of three inter-related concepts: Mobile Accounting; Mobile Brokerage and Mobile Financial Information Services. Most services in the categories designated Accounting and Brokerage are transaction-based.
The non-transaction-based services of an informal nature are, however, essential for conducting transactions - for instance, balance enquiries might be needed before committing a money remittance. The accounting and brokerage services are, therefore, offered invariably in combination with information services. Information services, on the other hand, may be offered as an independent module.
Over the last few years, the mobile and wireless market has been one of the fastest growing markets in the world and it is still growing at a rapid pace. According to the GSM Association and Ovum, the number of mobile subscribers exceeds 2.5 Billion, of which more than 2 Billion are GSM. This part of the mobile commerce is very popular in countries where most of their population is unbanked. Countries like Sudan, Ghana and South Africa received very well this new commerce. In Latin American countries like Uruguay, Paraguay, Argentina, Brazil, Venezuela, Colombia, Guatemala, and recently Mexico, it started with a huge success. In Colombia, it was released with Redeban. In Guatemala, it has the support of Banco Industrial. Mexico released the mobile commerce with Omnilife,Bancomer and a private company (MPower Ventures).
The mobile phone culture is growing and has penetrated the urban and semi-urban population in India. The number of mobile users is estimated to have far surpassed the number of Internet users. Recently, in India, there has been a phenominal growth in the use of Mobile Banking applications with leading banks adopting Mobile Transaction platform and the Central Bank (RBI) publishing guidelines for mobile banking operations.
Two important, yet quite unrelated, events in the evolution of mobile payments in India occurred in 2008. Firstly, the new credit policy of the RBI came along with guidelines for facilitating mobile payments. Secondly, according to Dr. Raghu Raghuraman's CSFR Report, Mobile banking is the most promising front-end technology for broadening the access of finance in the country. Taken together, these are defining moments in the recognition of mobile now as an accepted channel for banking and commerce, and clearing the way for its rapid and mass deployment across the country by the financial sector. Technology related regulation can never keep pace with the fast-pace nature of technology innovations and progress, nor fully define it. Regulation here has to have a light touch, so as not to throttle innovation, yet, serve public interest.
In the same order, mobile banking is getting wider acceptance, but the convenience it offers has its own share of risk. It is, therefore, even more important to be aware of the safeguards for the secure usage of this medium for financial transactions. Thousands of people from rural areas across Indian states are likely to get their social security pension and wages paid under the National Rural Employment Guarantee Act (NREGA) Scheme with the help of mobiles in the near future.
Mobile banking pilots and full-scale operations are being conducted across different states of Indian Union and the entire eco-system is being managed by the government with the help of the Reserve Bank of India, other banks, leading telecom operators and technology implementation partners. The eco-system is important since banking regulations in India currently do not allow cash for exchange of another 'unit' such as 'airtime' in the case of mobiles. Only banks and the Indian Post (through money-orders) are currently allowed such transfers.
The country's financial regulatory body, Reserve Bank of India, has relaxed the norms for mobile banking by raising the caps on fund transfers as well as mobile-based payments. Continuing with its earlier announced draft guidelines for mobile banking services in India, RBI has increased fund-transfer limit from Rs. 2,500 a day to Rs. 5,000 a day.
The regulator has also provided a cap of Rs. 10,000 for purchases through mobile. The move was made after requests from banks to raise the limits for mobile banking transactions. According to RBI, banks should ensure mobile banking services to customers of all network operators. Long term goal of mobile banking is to enable funds transfer from account in one bank to any other account in the same or other bank in real time. The Central Bank is also planning to relax the registration procedure for mobile banking on a case-to-case basis, when banks apply for their licenses. Presently, banks are required to get a form signed by all their customers.
These guidelines definitely provide the vision of our regulators in terms of ensuring a secure payments environment. The specific focus on security is very welcome and the changes made to the transaction limits moving towards only daily limits will allow more flexibility to the customers for their payments as well as the banks for defining their risk parameters. A Rs. 10000 limit for purchase of goods / services covers most of the basic transactions except purchase of electronic / high-end luxury goods, or air-ticketing. However, it is hoped that this would be relaxed to a certain degree at some later stage once the confidence is gathered in the system to bring in all commerce into the mobile payments net.
Mobile payment firms are expecting a further relaxation of norms after the successful roll-out of m-banking products. Industry players have been positive with the changes and expect mobile banking to become more practical and broaden it's scope. The increase in limits is a significant change, which shows RBI's intention of making the medium a universally acceptable payment tool. Further, the relaxation in the registration process is a positive step since one needs to keep the customers' convenience in mind for new initiatives like these.
Mobile banking, which is catching up fast in the cities and hinterland, is not only helping the government to take a step forward towards fulfilling its aim of having one bank account for every household, but also saving crores of rupees by way of reduced transaction costs. The government incurs a transaction cost of Rs. 12-13 for every Rs. 100 it shells out, mobile banking helps to reduce the cost to a mere Rs. 2. RBI estimates that around 40 per cent of Indians lack access to formal financial services and are largely 'unbanked'.
Technology
Mobile payments are a wireless consumer product or service. In short a benefit - convenience, like, escalators, ATMs, etc. Methods and approaches for mobile commerce will differ across region, country and even service providers, as each stakeholder has its own assessment of what works best and what value proposition appeals to the consumer. Basic principles of PIN management, customer confidentiality, KYC, ALM, customer registration, risk mitigation, consumer protection, etc., are applicable. Just as they would apply to credit cards, ATM cards, ATMs, collection boxes, internet banking, internet e-commerce, telephone banking, cheque books, bank website, etc. This is not to say that there is a fool-proof system for any of these, but they are as 'safe' as long as they generate enough 'trust' and convenience to offset perception (and actual) of risk so as to be pervasive in the financial system. After all, a wallet with cash is only as safe as you keep it. Neither cash nor wallet can be pilfer (tamper) proof!
Indian banks and payment service providers have been by and large dovetailing their mobile payment initiatives under the umbrella of mobile banking even before the guidelines were out. The banking system has already been in conformity with these suggested guidelines, which now have the legal sanction of the Reserve Bank of India. Banks own operating experience and other payments systems prevalent have provided the necessary grist for the RBI mill, and as time go on, hopefully these will evolve and become far more enabling for stakeholders, rather than favor one approach or another or cripple themselves in strangulated regulations.
On the financial inclusion side, if we go strictly by Dr. Raghuraman's recommendations of creating a 'National Electronic Financial Inclusion System' (NEFIS), the backbone of such a system would be in its ability to carry out small value transactions (Rs. 100) at limited transaction. And the only way that can be done on a mass acceptable basis is via SMS, which is the single most pervasive feature in mobile technology revolution, cutting across all SEC's, geographies, hand-set vendors, MNOs etc. The humble SMS along with dynamic authentication does indeed have pride of place in the scheme of things. Although advanced / high-end transactions can be conducted using cell phones, most mobile banking customers use it for basic activities like balance enquiry, making payments of regular bills, etc.
Most of banks are still stuck on the typical GPRS-based model or working out applications that need GRPS to operate on. Security is one issue that practically strips the banking ability out of these services. The only possible solution is the use of USSD platform, which inherently has higher levels of security as compared to other existing platforms. The Unstructured Supplementary Service Data (USSD) platform inherently has higher levels of security as compared to other existing platforms. USSD is independent of SMS, GPRS, and WAP. The real time operations ensure that the data is not stored anywhere, providing high level security. There is no risk to customer's personal information unlike SMS or GPRS, as the service doesn't store any data or session on the hand-set. Barclays Bank, through its 'Hello Money' scheme is the only mobile banking solution in India to operate on the USSD technology platform.
There are two limitations inherent in applications that leverage USSD. Firstly, the screen of a typical mobile phone can accommodate only 160 characters, and secondly, the mobile phone service providers impose a time restraint on a single session, ranging from 3 to 10 minutes. The above issues need to be addressed by designing the application user interface in a manner that the number of characters doesn't become a limitation and multiple sets of customer transactions can be executed within the allowed time limit.
Safety Measures
Mobile banking in India has a marked substantial improvement viewed by the government as a potent tool for financial inclusion. Still, there are many hurdles before it can fulfill its objective of reaching to the un-banked masses. Apart from the basics, one should be aware of the safety measures that one needs to take: -
• One should immediately change his/her password and destroy the password mailer after doing so. Disclosing your password to someone (including bank staff) and using obvious passwords like name, date of birth, etc., is the biggest folly.
• Never store mobile banking PIN (m-pin) in your cell phone memory and also delete all messages that have your m-pin information. If possible, disable the temporary storage. The bank accounts of mobile banking users can be manipulated very easily if they lose their phone or change their phone number or hand-set. Tampering of any kind with phone or the number should be immediately reported to the bank; get mobile banking services blocked and request for a new m-pin.
• Use the phone-lock function on your mobile device when it is not in use. Choose passwords which are difficult to crack and keep them safe. Strong passwords have eight characters or more and use a combination of letters, numerals and symbols.
• Never disclose via text message any personal information such as account numbers, passwords or any combination of sensitive information like your PAN card, birth date, etc., that could be used for identity theft.
• Make sure your phone is configured securely, especially when it comes to configuring the web-browser and e-mail software. Security and privacy settings can be configured without any special expertise, simply by using the 'Help' feature of the software, or visiting the vendor's website.
• Protect the phone with security software, including a software firewall and antivirus protection. Download files only from a trusted source. Also, make sure the Bluetooth is switched off while not in use to avoid viruses.
• Before letting someone else have access to your device (lending it to another person, discarding, or selling your mobile device), ensure that you have deleted all personal account information. Keep the device always up-to-date with the latest patches and updates including antivirus updates.
• It is true that mobile banking saves you from those bank trips for every small little thing. But before you get lured by the convenience and the ease that mobile banking services provide, make sure that you know everything about the service. Mobile banking is available through many modes. Which one is compatible with your hand-set is the first thing that one should know as a mobile banking user. A user must know what his bank is charging for the service and also the rates that telecom companies levy for connectivity and messaging.
How Frauds Occurs
Mobile banking has been at the threshold of a revolution for some time. While many operators as well as banks, have introduced mobile banking applications, it never became popular due to security concerns. If we think that mobile banking solutions are all about cutting down the number of visits to the bank, think again. Mobile banking frauds have become very common these days and can happen in a variety of ways. If you have stored your m-pin on sent messages or on the phone and the phone is lost, then your account can be easily misused. Anyone can easily read your messages as they are sent in clear text. Other than that, if there is virus in your phone and the same has the capability to access your m-pin details, then also you can be a victim of fraud.
Frauds can happen by way of cloning of websites. Although most banks have encrypted websites, but if they are not encrypted, then account users can be fooled by fake websites. One of the possible ways of identifying the cloned website is the http address at the top. The fake website can never have the same uniform source locator (URL), and therefore, one must always check the address bar properly at the top.
The use of mobile for financial and non-financial transactions has had a chequered history. Several initiatives during the last decade (overseas) have come and gone, and several more initiatives into the future are emerging. The difference between now and then is: Mobiles have come a along way. They find themselves in the hands of a third of humanity, and have pipped the internet in penetration! Mobile banking as a service is still to catch up in large parts of the world. Even the developed countries, where mobile banking has gained momentum, are still exploring opportunities to exploit this space and develop new ways of usage. India is no different. It is among the fastest growing markets in the world. Though, basic services like bill payments, recharges, and money transfers have picked up in some markets. In developed countries, m-commerce has started gaining popularity due to higher level of comfort with emerging technologies. Also, increasing penetration of mobile phones in countries across the world has fuelled expectations. Thus, mobile banking is the service of the future and m-commerce is inevitable. Mobile banking is expected to become common and popular the world over and replace traditional banking activities and facilities. In fact, people have begun to prefer mobile banking to debit/credit cards, also because the numbers of cell phone users are more than debit/credit card holders.
Apparently, mobile banking has emerged the most promising front-end technology for broadening the access of finance in the country. However, people have to worry about frauds in their accounts as they think it has a weaker security system than personal banking. Even RBI is concerned about the security, especially when it comes to verifying the bonafides of users accessing bank accounts from distant locations. Banks haven't marketed the service aggressively enough to attract customers.
Furthermore, there is a lack of common technology standards for mobile banking. Many protocols are being used for mobile banking - HTML, WAP, SOAP, XML, to name a few. It would be a wise idea for the vendor to develop a mobile banking application that can connect multiple banks. It would require either the application to support multiple protocols or use of a common and widely acceptable set of protocols for data exchange. There are a large number of different mobile phone devices and it is a big challenge for banks to offer mobile banking solution on any type of device. Some of these devices support J2ME and others support WAP browser or only SMS.
Since it's a relatively new concept, many people are still unaware of its existence, benefits and use. In the interiors of India, where banking is still a new concept, mobile banking is still a distant dream.
The advent of Internet has revolutionized the financial services industry, empowering organizations with new business models and alternatves to offer 24X7 accessibility to their customers. The ability to online financial transactions has also created new players in the financial services industry, such as online banks, online brokers and wealth managers who offer personalized services. People are mobile-savvy, and are always ready to try out advanced hand-sets and services. Mobile banking also saves the time and effort of going to the bank, standing in queues, etc. According to a Business Standard survey, one out of every three persons was ready to change his/her banks to avail free mobile banking services. Around 50 percent of the people who were surveyed used cell phones to check their bank balance. Awareness of mobile banking is also high in India. Although such players still account for a tiny percentage of the industry, it is the latest in customer convenience in banking, to access and operate your bank account from anywhere from your cell phone. This is available on advance technology phones. One can access bank account through SMS or scripting languages like XML, HTML, SOAP and WAP. Mobile banking and ATMs use the same infrastructure.
In the recent past, banks across the globe have invested billions of dollars to build sophisticated internet banking capabilities. As the trend is shifting to mobile banking, there is a challenge for CIOs and CTOs of these banks to decide on how to leverage their investment in internet banking and offer mobile banking, in the shortest possible time. According to Financial Consultancy Celent study, 35 per cent of online banking households will be using mobile banking by 2010, up from less than 1 per cent today. Upwards of 70 per cent of bank center call volume is projected to come from mobile phones. Mobile banking will eventually allow users to make payments at the physical point of sale. "Mobile contactless payments" will make up 10 per cent of the contactless market by 2010.
Mobile Banking or M-Banking, m-banking, SMS banking, etc., is a term used for performing balance checks, account transactions, payments, etc., via a mobile device such as a mobile phone. Mobile banking today is most often performed via SMS or the Mobile Internet but can also use special programs clients download to the mobile device. The mobile acts as a branch of the bank by storing a database of customers. It also has a smartcard, which biometrically stores the identity of the customer such as name, address, photograph, fingerprint templates and relevant details of the savings or loan accounts held by the issuing bank. Acadamically, mobile banking is defined as: -
"A provision and availment of banking and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts, and to access customised information."
Apparantly, Mobile Banking can be said to consist of three inter-related concepts: Mobile Accounting; Mobile Brokerage and Mobile Financial Information Services. Most services in the categories designated Accounting and Brokerage are transaction-based.
The non-transaction-based services of an informal nature are, however, essential for conducting transactions - for instance, balance enquiries might be needed before committing a money remittance. The accounting and brokerage services are, therefore, offered invariably in combination with information services. Information services, on the other hand, may be offered as an independent module.
Over the last few years, the mobile and wireless market has been one of the fastest growing markets in the world and it is still growing at a rapid pace. According to the GSM Association and Ovum, the number of mobile subscribers exceeds 2.5 Billion, of which more than 2 Billion are GSM. This part of the mobile commerce is very popular in countries where most of their population is unbanked. Countries like Sudan, Ghana and South Africa received very well this new commerce. In Latin American countries like Uruguay, Paraguay, Argentina, Brazil, Venezuela, Colombia, Guatemala, and recently Mexico, it started with a huge success. In Colombia, it was released with Redeban. In Guatemala, it has the support of Banco Industrial. Mexico released the mobile commerce with Omnilife,Bancomer and a private company (MPower Ventures).
The mobile phone culture is growing and has penetrated the urban and semi-urban population in India. The number of mobile users is estimated to have far surpassed the number of Internet users. Recently, in India, there has been a phenominal growth in the use of Mobile Banking applications with leading banks adopting Mobile Transaction platform and the Central Bank (RBI) publishing guidelines for mobile banking operations.
Two important, yet quite unrelated, events in the evolution of mobile payments in India occurred in 2008. Firstly, the new credit policy of the RBI came along with guidelines for facilitating mobile payments. Secondly, according to Dr. Raghu Raghuraman's CSFR Report, Mobile banking is the most promising front-end technology for broadening the access of finance in the country. Taken together, these are defining moments in the recognition of mobile now as an accepted channel for banking and commerce, and clearing the way for its rapid and mass deployment across the country by the financial sector. Technology related regulation can never keep pace with the fast-pace nature of technology innovations and progress, nor fully define it. Regulation here has to have a light touch, so as not to throttle innovation, yet, serve public interest.
In the same order, mobile banking is getting wider acceptance, but the convenience it offers has its own share of risk. It is, therefore, even more important to be aware of the safeguards for the secure usage of this medium for financial transactions. Thousands of people from rural areas across Indian states are likely to get their social security pension and wages paid under the National Rural Employment Guarantee Act (NREGA) Scheme with the help of mobiles in the near future.
Mobile banking pilots and full-scale operations are being conducted across different states of Indian Union and the entire eco-system is being managed by the government with the help of the Reserve Bank of India, other banks, leading telecom operators and technology implementation partners. The eco-system is important since banking regulations in India currently do not allow cash for exchange of another 'unit' such as 'airtime' in the case of mobiles. Only banks and the Indian Post (through money-orders) are currently allowed such transfers.
The country's financial regulatory body, Reserve Bank of India, has relaxed the norms for mobile banking by raising the caps on fund transfers as well as mobile-based payments. Continuing with its earlier announced draft guidelines for mobile banking services in India, RBI has increased fund-transfer limit from Rs. 2,500 a day to Rs. 5,000 a day.
The regulator has also provided a cap of Rs. 10,000 for purchases through mobile. The move was made after requests from banks to raise the limits for mobile banking transactions. According to RBI, banks should ensure mobile banking services to customers of all network operators. Long term goal of mobile banking is to enable funds transfer from account in one bank to any other account in the same or other bank in real time. The Central Bank is also planning to relax the registration procedure for mobile banking on a case-to-case basis, when banks apply for their licenses. Presently, banks are required to get a form signed by all their customers.
These guidelines definitely provide the vision of our regulators in terms of ensuring a secure payments environment. The specific focus on security is very welcome and the changes made to the transaction limits moving towards only daily limits will allow more flexibility to the customers for their payments as well as the banks for defining their risk parameters. A Rs. 10000 limit for purchase of goods / services covers most of the basic transactions except purchase of electronic / high-end luxury goods, or air-ticketing. However, it is hoped that this would be relaxed to a certain degree at some later stage once the confidence is gathered in the system to bring in all commerce into the mobile payments net.
Mobile payment firms are expecting a further relaxation of norms after the successful roll-out of m-banking products. Industry players have been positive with the changes and expect mobile banking to become more practical and broaden it's scope. The increase in limits is a significant change, which shows RBI's intention of making the medium a universally acceptable payment tool. Further, the relaxation in the registration process is a positive step since one needs to keep the customers' convenience in mind for new initiatives like these.
Mobile banking, which is catching up fast in the cities and hinterland, is not only helping the government to take a step forward towards fulfilling its aim of having one bank account for every household, but also saving crores of rupees by way of reduced transaction costs. The government incurs a transaction cost of Rs. 12-13 for every Rs. 100 it shells out, mobile banking helps to reduce the cost to a mere Rs. 2. RBI estimates that around 40 per cent of Indians lack access to formal financial services and are largely 'unbanked'.
Technology
Mobile payments are a wireless consumer product or service. In short a benefit - convenience, like, escalators, ATMs, etc. Methods and approaches for mobile commerce will differ across region, country and even service providers, as each stakeholder has its own assessment of what works best and what value proposition appeals to the consumer. Basic principles of PIN management, customer confidentiality, KYC, ALM, customer registration, risk mitigation, consumer protection, etc., are applicable. Just as they would apply to credit cards, ATM cards, ATMs, collection boxes, internet banking, internet e-commerce, telephone banking, cheque books, bank website, etc. This is not to say that there is a fool-proof system for any of these, but they are as 'safe' as long as they generate enough 'trust' and convenience to offset perception (and actual) of risk so as to be pervasive in the financial system. After all, a wallet with cash is only as safe as you keep it. Neither cash nor wallet can be pilfer (tamper) proof!
Indian banks and payment service providers have been by and large dovetailing their mobile payment initiatives under the umbrella of mobile banking even before the guidelines were out. The banking system has already been in conformity with these suggested guidelines, which now have the legal sanction of the Reserve Bank of India. Banks own operating experience and other payments systems prevalent have provided the necessary grist for the RBI mill, and as time go on, hopefully these will evolve and become far more enabling for stakeholders, rather than favor one approach or another or cripple themselves in strangulated regulations.
On the financial inclusion side, if we go strictly by Dr. Raghuraman's recommendations of creating a 'National Electronic Financial Inclusion System' (NEFIS), the backbone of such a system would be in its ability to carry out small value transactions (Rs. 100) at limited transaction. And the only way that can be done on a mass acceptable basis is via SMS, which is the single most pervasive feature in mobile technology revolution, cutting across all SEC's, geographies, hand-set vendors, MNOs etc. The humble SMS along with dynamic authentication does indeed have pride of place in the scheme of things. Although advanced / high-end transactions can be conducted using cell phones, most mobile banking customers use it for basic activities like balance enquiry, making payments of regular bills, etc.
Most of banks are still stuck on the typical GPRS-based model or working out applications that need GRPS to operate on. Security is one issue that practically strips the banking ability out of these services. The only possible solution is the use of USSD platform, which inherently has higher levels of security as compared to other existing platforms. The Unstructured Supplementary Service Data (USSD) platform inherently has higher levels of security as compared to other existing platforms. USSD is independent of SMS, GPRS, and WAP. The real time operations ensure that the data is not stored anywhere, providing high level security. There is no risk to customer's personal information unlike SMS or GPRS, as the service doesn't store any data or session on the hand-set. Barclays Bank, through its 'Hello Money' scheme is the only mobile banking solution in India to operate on the USSD technology platform.
There are two limitations inherent in applications that leverage USSD. Firstly, the screen of a typical mobile phone can accommodate only 160 characters, and secondly, the mobile phone service providers impose a time restraint on a single session, ranging from 3 to 10 minutes. The above issues need to be addressed by designing the application user interface in a manner that the number of characters doesn't become a limitation and multiple sets of customer transactions can be executed within the allowed time limit.
Safety Measures
Mobile banking in India has a marked substantial improvement viewed by the government as a potent tool for financial inclusion. Still, there are many hurdles before it can fulfill its objective of reaching to the un-banked masses. Apart from the basics, one should be aware of the safety measures that one needs to take: -
• One should immediately change his/her password and destroy the password mailer after doing so. Disclosing your password to someone (including bank staff) and using obvious passwords like name, date of birth, etc., is the biggest folly.
• Never store mobile banking PIN (m-pin) in your cell phone memory and also delete all messages that have your m-pin information. If possible, disable the temporary storage. The bank accounts of mobile banking users can be manipulated very easily if they lose their phone or change their phone number or hand-set. Tampering of any kind with phone or the number should be immediately reported to the bank; get mobile banking services blocked and request for a new m-pin.
• Use the phone-lock function on your mobile device when it is not in use. Choose passwords which are difficult to crack and keep them safe. Strong passwords have eight characters or more and use a combination of letters, numerals and symbols.
• Never disclose via text message any personal information such as account numbers, passwords or any combination of sensitive information like your PAN card, birth date, etc., that could be used for identity theft.
• Make sure your phone is configured securely, especially when it comes to configuring the web-browser and e-mail software. Security and privacy settings can be configured without any special expertise, simply by using the 'Help' feature of the software, or visiting the vendor's website.
• Protect the phone with security software, including a software firewall and antivirus protection. Download files only from a trusted source. Also, make sure the Bluetooth is switched off while not in use to avoid viruses.
• Before letting someone else have access to your device (lending it to another person, discarding, or selling your mobile device), ensure that you have deleted all personal account information. Keep the device always up-to-date with the latest patches and updates including antivirus updates.
• It is true that mobile banking saves you from those bank trips for every small little thing. But before you get lured by the convenience and the ease that mobile banking services provide, make sure that you know everything about the service. Mobile banking is available through many modes. Which one is compatible with your hand-set is the first thing that one should know as a mobile banking user. A user must know what his bank is charging for the service and also the rates that telecom companies levy for connectivity and messaging.
How Frauds Occurs
Mobile banking has been at the threshold of a revolution for some time. While many operators as well as banks, have introduced mobile banking applications, it never became popular due to security concerns. If we think that mobile banking solutions are all about cutting down the number of visits to the bank, think again. Mobile banking frauds have become very common these days and can happen in a variety of ways. If you have stored your m-pin on sent messages or on the phone and the phone is lost, then your account can be easily misused. Anyone can easily read your messages as they are sent in clear text. Other than that, if there is virus in your phone and the same has the capability to access your m-pin details, then also you can be a victim of fraud.
Frauds can happen by way of cloning of websites. Although most banks have encrypted websites, but if they are not encrypted, then account users can be fooled by fake websites. One of the possible ways of identifying the cloned website is the http address at the top. The fake website can never have the same uniform source locator (URL), and therefore, one must always check the address bar properly at the top.
The use of mobile for financial and non-financial transactions has had a chequered history. Several initiatives during the last decade (overseas) have come and gone, and several more initiatives into the future are emerging. The difference between now and then is: Mobiles have come a along way. They find themselves in the hands of a third of humanity, and have pipped the internet in penetration! Mobile banking as a service is still to catch up in large parts of the world. Even the developed countries, where mobile banking has gained momentum, are still exploring opportunities to exploit this space and develop new ways of usage. India is no different. It is among the fastest growing markets in the world. Though, basic services like bill payments, recharges, and money transfers have picked up in some markets. In developed countries, m-commerce has started gaining popularity due to higher level of comfort with emerging technologies. Also, increasing penetration of mobile phones in countries across the world has fuelled expectations. Thus, mobile banking is the service of the future and m-commerce is inevitable. Mobile banking is expected to become common and popular the world over and replace traditional banking activities and facilities. In fact, people have begun to prefer mobile banking to debit/credit cards, also because the numbers of cell phone users are more than debit/credit card holders.
Apparently, mobile banking has emerged the most promising front-end technology for broadening the access of finance in the country. However, people have to worry about frauds in their accounts as they think it has a weaker security system than personal banking. Even RBI is concerned about the security, especially when it comes to verifying the bonafides of users accessing bank accounts from distant locations. Banks haven't marketed the service aggressively enough to attract customers.
Furthermore, there is a lack of common technology standards for mobile banking. Many protocols are being used for mobile banking - HTML, WAP, SOAP, XML, to name a few. It would be a wise idea for the vendor to develop a mobile banking application that can connect multiple banks. It would require either the application to support multiple protocols or use of a common and widely acceptable set of protocols for data exchange. There are a large number of different mobile phone devices and it is a big challenge for banks to offer mobile banking solution on any type of device. Some of these devices support J2ME and others support WAP browser or only SMS.
Since it's a relatively new concept, many people are still unaware of its existence, benefits and use. In the interiors of India, where banking is still a new concept, mobile banking is still a distant dream.