We’ve turned a corner in mobile enterprise. Bank of America recently announced that its customers preferred online and mobile banking to dropping by the branch office. They’re shutting down several branches, leaning on their popular online and mobile services. As companies like BofA increase their dependence on mobile, new opportunities and concerns arise. This month we’ll look at what BofA and other banks have done and lessons we can all learn. Our other articles detail some of the challenges for the mobile enterprise – including availability and performance. How are you capitalizing on the rising tide of doing business on mobile?
Tim Murphy
Keynote Marketing Manager, Mobile Quality
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SMS banking is a technology-enabled service offering from banks to its customers, permitting them to operate selected banking services over their mobile phones using SMS messaging.
Push and pull messages
SMS banking services are operated using both push and pull messages. Push messages are those that the bank chooses to send out to a customer's mobile phone, without the customer initiating a request for the information. Typically push messages could be either Mobile marketing messages or messages alerting an event which happens in the customer's bank account, such as a large withdrawal of funds from the ATM or a large payment using the customer's credit card, etc. (see section below on Typical Push and Pull messages).
Another type of push message is One-time password (OTPs). OTPs are the latest tool used by financial and banking service providers in the fight against cyber fraud. Instead of relying on traditional memorized passwords, OTPs are requested by consumers each time they want to perform transactions using the online or mobile banking interface. When the request is received the password is sent to the consumer’s phone via SMS. The password is expired once it has been used or once its scheduled life-cycle has expired.
Pull messages are those that are initiated by the customer, using a mobile phone, for obtaining information or performing a transaction in the bank account. Examples of pull messages for information include an account balance enquiry, or requests for current information like currency exchange rates and deposit interest rates, as published and updated by the bank.
The bank’s customer is empowered with the capability to select the list of activities (or alerts) that he/she needs to be informed. This functionality to choose activities can be done either by integrating to the internet banking channel or through the bank’s customer service call centre.
Typical push and pull services offered under SMS banking
Depending on the selected extent of SMS banking transactions offered by the bank, a customer can be authorized to carry out either non-financial transactions, or both and financial and non-financial transactions. SMS banking solutions offer customers a range of functionality, classified by push and pull services as outlined below.
Typical push services would include:
* Periodic account balance reporting (say at the end of month);
* Reporting of salary and other credits to the bank account;
* Successful or un-successful execution of a standing order;
* Successful payment of a cheque issued on the account;
* Insufficient funds;
* Large value withdrawals on an account;
* Large value withdrawals on the ATM or EFTPOS on a debit card;
* Large value payment on a credit card or out of country activity on a credit card.
* One-time password and authentication
Typical pull services would include:
* Account balance enquiry;
* Mini statement request;
* Electronic bill payment;
* Transfers between customer's own accounts, like moving money from a savings account to a current account to fund a cheque;
* Stop payment instruction on a cheque;
* Requesting for an ATM card or credit card to be suspended;
* De-activating a credit or debit card when it is lost or the PIN is known to be compromised;
* Foreign currency exchange rates enquiry;
* Fixed deposit interest rates enquiry.
Concerns and skepticism about SMS banking
Many banks would have some concerns when the prospects of introducing SMS banking are discussed. Most of these concerns could revolve around security and operational controls around SMS Banking. However supporters of SMS claim that while SMS banking is not as secure as other conventional banking channels, like the ATM and internet banking, the SMS banking channel is not intended to be used for very high-risk transactions.
Quality of service in SMS banking
Because of the concerns made explicit above, it is extremely important that SMS gateway providers can provide a decent quality of service for banks and financial institutions in regards to SMS services. Therefore, the provision of Service Level Agreement(SLA) is a requirement for this industry; it is necessary to give the bank customer delivery guarantees of all messages, as well as measurements on the speed of delivery, throughput, etc. SLAs give the service parameters in which a messaging solution is guaranteed to perform.
Technologies employed for SMS banking
Most SMS banking solutions are add-on products and work with the bank’s existing host systems deployed in its computer and communications environment. As most banks have multiple backend hosts, the more advanced SMS banking systems are built to be able to work in a multi-host banking environment; and to have open interfaces which allow for messaging between existing banking host systems using industry or de-facto standards.
Well developed and mature SMS banking software solutions normally provide a robust control environment and a flexible and scalable operating environment. These solutions are able to connect seamlessly to multiple SMSC operators in the country of operation. Depending on the volume of messages that are require to be pushed, means to connect to the SMSC could be different, such as using simple modems or connecting over leased line using low level communication protocols (like SMPP, UCP etc.). Advanced SMS banking solutions also cater to providing failover mechanisms and least-cost routing options.
Bharti Airtel launches ‘mChek on Airtel’ on voice (India)
Bharti Airtel, India’s leading mobile operator, has reportedly announced the launch of its m-Commerce service ‘mChek on Airtel’, enabling its susbcribers to pay their Airtel mobile and fixed-line bills on the voice platform. The service will also enable subscribers to recharge Airtel mobile pre-paid and DTH accounts through Interactive Voice Response (IVR). The subscribers will have to call 543219 to access the service, which is toll free, and this service ensures seamless and secure use of voice (IVR) for m-Commerce transactions for all Airtel mobile customers, Airtel said in a statement.
“There is a tremendous potential for voice enabled m- Commerce services in India and we are giving a huge thrust in this area. We believe that m-Commerce has the power to facilitate a paradigm shift in the way mobile users do commercial transactions and business in future,” Bharti Airtel President (Mobile Services) Atul Bindal said.
To avail the service the subscribers will have to call the number and create their own six-digit mChekPIN and link their VISA/Mastercard credit card and for later transactions, the subscriber needs to enter the PIN on their registered mobile number to authorise the transaction.
The convenience of executing simple transactions and sending out information or alerting a customer on the mobile phone is often the overriding factor that dominates over the skeptics who tend to be overly bitten by security concerns.
As a personalized end-user communication instrument, today mobile phones are perhaps the easiest channel on which customers can be reached on the spot, as they carry the mobile phone all the time no matter where they are. Besides, the operation of SMS banking functionality over phone key instructions makes its use very simple. This is quite different from internet banking which can offer broader functionality, but has the limitation of use only when the customer has access to a computer and the Internet. Also, urgent warning messages, such as SMS alerts, are received by the customer instantaneously; unlike other channels such as the post, email, Internet, telephone banking, etc. on which a bank's notifications to the customer involves the risk of delayed delivery and response.
The SMS banking channel also acts as the bank’s means of alerting its customers, especially in an emergency situation; e.g. when there is an ATM fraud happening in the region, the bank can push a mass alert (although not subscribed by all customers) or automatically alert on an individual basis when a predefined ‘abnormal’ transaction happens on a customer’s account using the ATM or credit card. This capability mitigates the risk of fraud going unnoticed for a long time and increases customer confidence in the bank’s information systems.
<--38 Million Indians access web via mobile-->
Indian internet users are vehemently using their mobiles to keep themselves connected to Internet. Thirty-eight million Indians use their handsets to browse the web. The number of people using their mobile handsets to access the web is now over four times those using a PC.
The findings based on a report of the Telecommunications Regulatory Authority of India (TRAI) also stated that even as net connections fell in the year 2007, the number of people accessing the web on their cellphones increased from16 million to cross the 38 million mark. This included both CDMA and GSM users logging on to the Internet to surf, check email etc, among whom the number of 'active' Internet users in India currently stands at 32.2 million. The average usage per week on the traditional web stood at 2.4 days. Access using Mobile web surprisingly stood slightly higher at 2.7 days per week.
A report on mobile expansion by the Centre for Telecoms Research (CTR), London said that mobile phone connections in India will reach 600 million in five years time as handsets and tariffs become more affordable for the urban population. The report is made on the backdrop of the assumption that within the next five years, urban populations of India will reach high levels of mobile phone saturation, to the extent where many phone users will have two or more handset connections. A large portion of this growth will arise from pre-paid connections, driven by the increasing affordability of handsets and tariffs amongst India's lower middle classes. D. Shivakumar, Managing Director of Nokia India said, "The average usage of the web on the PC per week stood at 2.4 days, while the use of mobile web surprisingly stood slightly higher at 2.7 days per week."
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