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Financial Services

Key Dimensions of Mobile Banking Services

Key Dimensions of Mobile Banking Services – This is the 2nd part of a 5-part story on Mobile Financial Services and info-security. This part focuses on Mobile Banking opportunities and key dimensions.

 

Mobile Banking – Smart Mobile Apps with AI

Mobile banking services (sms notifications) was the first digital banking services offerings made by banks.  Mobile Money and Mobile Banking are viewed under the same umbrella. Currently both of the services are encapsulated in a financial world which is viewed as complicated. As far as Mobile Money and Mobile Banking are concerned, in terms of technology, there is no rocket science in both services. Major issues are found in business rules, business requirements, distribution channels and regulatory requirements.

In US market mobile banking typically operates across all major mobile service providers through one of three ways: SMS messaging, mobile based web, mobile apps.

MBS

Majority of users do not acknowledge the fact that Mobile Money and Mobile Banking are two different service offerings. Both are completely separate businesses.

 

Mobile Money vs Mobile Banking vs Mobile Payments

Mobile Money normally focuses on unbanked and low income customers where margins are very low, transaction values are low but the high volumes can suffice to bring profitability to the operators. Mobile Banking on the other hand is when a financial institution allows its customers to conduct financial transactions on their bank account via a mobile device.

Africa is heaven for Mobile Money because banking penetration is less than 5% while in Asia, through countries like Indonesia, Singapore, India and many more, Mobile Money services can never fly or if I can say never be a success; chances are almost zero due to the high level of financial inclusion, availability of ATMs and the rife of Agency Banking. When Africa delivers on its potential in terms of Mobile Money, the winners will be those operators who have been ready to live with the risks involved in the business.

Mobile banking differs from mobile payments, which involve the use of a mobile device to pay for goods or services either at the point of sale or remotely. Analogously to the use of a debit or credit card to effect an electronic funds transfer at point of sale (Payment method) which is an electronic payment system involving electronic funds transfers based on the use of payment cards, such as debit or credit cards, at payment terminals located at points of sale.

 

Mobile Financial Services

Unless we talk about value added services on top of banking, Mobile Banking and Mobile Money basics remains the same as in mainstream banking (Debit or Credit), nothing beyond. Banks are losing out to Mobile Money services due to their failure to compete with MNOs/MVNOs and skepticism to open up their Mobile Banking services to run side by side with Mobile Money

Mobile Banking (Including Mobile Airtime Top up Services) on the other hand is when a financial institution allows its customers to conduct financial transactions on their bank account via a mobile device. Mobile banking also known as M-banking basically allows a user to operate a bank account using one’s mobile phone. With a registered mobile phone linked to one’s normal bank account, a bank customer would be able to perform basic operations using his mobile phone such as topping up airtime, transferring money, check his account balance, pay bills as well as make special requests to his bank. SMS Mobile Banking and alert is the simplest, allowing the user to transfer funds, check balance or access account information via text message.

 

SMS Banking

Texting terminology varies from bank to bank, but the overall function is generally the same. For example, texting “Bal” will obtain the account balance while “Tra” will allow inter-account transfers. First user registers and creates trust relationship between their phone number and bank server in order to verify their phone numbers with their bank, but once that’s completed, they can also set up alerts to let them know about balances or other confirmations.

Mobile web (Restricted to handset properties and operators ip pool) is the second mobile banking option. Similar to online account access from a home-based computer, this option allows for checking balances, bill payment and account transfers simply by logging into the user’s account via a mobile web browser. Mobile banking applications for Android, iPhone and Blackberry connect the user directly to the bank server for complete banking functionality without having to navigate a mobile web browser. These applications can be downloaded either through the bank’s website or through the iTunes store.

 HashTags – #WeTransformLives, #iTransformLives, #MobilePayments

 

Books + Other readings Referred

  • Research through Open Internet – NewsPortals, Economic development report papers and conferences.
  • Personal experience of  @AILabPage members.

 

 


Sign-tConclusion
– Africa is heaven for Mobile Money because banking penetration is less than 5%. While in Asia, through countries like Indonesia, Singapore, India and many more, Mobile Money services can never fly. May be its is correct to say it would never be a success. As chances are almost zero due to the high level of financial inclusion, availability of ATMs and the rise of Agency Banking. When Africa delivers on its potential in terms of Mobile Money, the winners will be those operators who have been ready to live with the risks involved in the business. For consumers, mobile banking is a terrific way to efficiently manage the occasional administrative task on the go. For small and mid-size business owners, mobile banking gives the precious gift of time.

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