With the ease of mobile smart phones and their wide variety of applications today, it's not surprising the mobile banking is now coming into full vogue. However, the concept and ability is not a new concept. In fact, in some third world countries mobile banking has already begun widespread acceptance.
Mobile banking is an electronic system that provides most of the basic services available in daily, traditional banking, but does so using a mobile communication device, usually a smart phone. In some cases, a well developed mobile banking system can actually provide point-of-sale ability similar to an ATM or credit card, except the purchaser buys by using their phone instead.
Mobile banking as a financial tool has been seeing its time of acceptance occur very much thanks to increasing mobility offered by smart phones. Phones essentially pack the capability of a basic computer and Internet access into a communication device. The technological push for increased mobility and function via a phone has begun to take shape with increased capital investment into networks and systems that can support these features.
Furthermore, young generations expect an increasing amount of automation to occur and meet their expectations of how the world should work. Whether it's faster Internet access or increased capabilities of Web 2.0 social features on a phone, young adults are putting their consumer dollars into those business models that respond.
Banks, keen on increasing their portfolios and customer base, are redesigning how they market their services. The capability of mobile banking to offer to customers is seen as a niche advantage that can be offered by the more technologically capable market players. By attracting new customers with these features for daily banking, the banking industry then has new consumers it can market other products to that make more profits, such as loans and investing services.
Typical Mobile Banking Services
Mobile banking services are usually limited to electronic movement of funds and data retrieval. This can include balance checking, transaction history retrieval, transfer of funds between linked accounts and purchasing through compatible vendor systems. In some cases, investment services can be activated, such as stock trading. Loans and other complex bank services are not included.
One of the major hurdles to overcome for successful consumer acceptance of mobile banking is financial systems security. The idea of managing funds over a cell phone or similar, with a signal that can easily be grabbed by others with the right equipment, is a scary idea for many consumers. Specific features are being designed or tested to enhance privacy and security. These include using identification smart cards so only the valid phone can access account information, enhance software security so the mobile user's phone doesn't get hacked and ID/Password requirements are being integrated regularly. Further, mobile banking systems are being bolstered with encryption protocols to make sure that anything caught in transit is useless without the right code to translate the data.
- Photo Credit smart phone image by Jon Le-Bon from Fotolia.com
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