Information Technology Reference
In-Depth Information
INFORMATION
Welcome to Mobile Banking
Access to computer-based information systems is becoming
increasingly pervasive; that is, the systems are available anywhere
at anytime. Consider the banking industry. The earliest banks kept
customers' money and valuables in vaults, and each bank dealt
only with its customers' financial needs. Financial data networks
were then created to support an interconnected banking system
that allowed the transfer of funds electronically. Still, customers
needed to visit the bank and speak with a cashier to deposit and
retrieve funds. Next, automatic teller machines (ATMs) extended
the electronic banking system to the customers and provided the
convenience of banking in numerous locations, including out of
town. More recently, banking services have extended to the Inter-
net and Web, where a substantial number of bank transactions
occur today. Because of online banking, ATMs, and direct deposits,
bank customers rarely have to visit the bank.
The latest trend in computer-based information systems
designed for banking is called mobile banking. Mobile banking pro-
vides banking services such as transferring funds, paying bills, and
checking balances from cell phones. While mobile banking is well
established in Japan, much of Europe, and elsewhere, it has been
slow to catch on in the United States. Some analysts believe that
this is due to banks' and wireless carriers' inability to agree on who
should design and control the software. Others think that U.S. cell
phone users simply aren't interested in the service. A study by For-
rester Research found that only 10 percent of Americans were
interested in mobile banking, while 35 percent already bank online.
Ready or not, mobile banking is coming to U.S. cell phone
users. AT&T, a large telecommunications company, is now offer-
ing online banking applications in partnership with Wachovia and
other banks. Citibank has designed its own mobile banking soft-
ware that can be downloaded and installed on more than 100
handsets over any carrier's network. A new system called
goDough has been designed by Jack Henry & Associates that deliv-
ers the same services offered at a bank's Web site from the small
display of a cell phone. Most banks and cell phone service
providers believe that the time for mobile banking in the United
States has arrived and are making moves to set the standard.
Chances are that by the time you read this, your bank will be offer-
ing cell phone banking services.
When considering mobile banking, many customers are con-
cerned about security. Sending private financial data over wireless
networks poses more risk than sending voice and text communica-
tions. Mobile banking systems address these risks with security
measures. Typically, a six-digit PIN is required for accessing
account information. Secondly, mobile banking software does not
store account numbers or PINs on the handset. Lastly, mobile
banking communications is secured with 128-bit encryption so
that it cannot be intercepted and decoded easily.
Mobile banking provides an interesting case study for mobile
computer-based information systems. It illustrates the difficulties
of getting customers to adopt new systems and disproves the
notion that “if you build it, they will come.” Companies must invest
time and resources to make consumers aware of the advantages
and safety of mobile banking. If it catches on, mobile banking will
pave the way for more electronic-wallet cell phone services. Coun-
tries that have a head start in mobile banking have moved on to
use cell phones to pay cashiers in restaurants and stores, pur-
chase items in vending machines, and buy a ride on the bus. Over
the next decade, it is expected that the cell phone will become a
user interface to thousands of different computer-based informa-
tion systems.
Discussion Questions
1.
Would you be comfortable using mobile banking for
transferring funds, paying bills, and checking balances?
Why or why not?
2.
How might mobile banking attract the attention of
hackers? Are the precautions discussed in this article
enough to keep hackers at bay?
Critical Thinking Questions
1.
One of the few services not available through online and
mobile banking is depositing and withdrawing cash. What
would have to change in society to do away with cash all
together?
2.
What additional dangers are there for making payments with a
cell phone, that don't exist when making payments with credit
cards? How might they be minimized?
SOURCES:
Hamilton, Anita, “Banking Goes Mobile,” Time, April 2, 2007,
“Next Generation of Mobile Banking Draws Interest,” Ecommerce Times,
November 23, 2007,
www.ecommercetimes.com/story/60435.html.
Noyes,
Katherine, “Qualcomm Beefs Up Mobile Banking with $210M Firethorn Buy,”
Ecommerce Times, November 14, 2007,
www.ecommercetimes.com/story/
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