Mobile Banking Information Technology in Bank of Abyssinia
The internet and the mobile phone, the two technological advancements that have profoundly affected human behavior in the last decade have started to converge. Using a variety of platforms, services are being created to enable mobile devices to perform many activities of the traditional internet in a reduced format for mobile devices. One such area of activity is mobile banking.
A cluster of dedicated and demanding mobile phone users (consumers) have multiplied tremendously over the years, who expect real-time information and access and high levels of service.
This article looks at how and why banking customers have begun to take advantage of mobile services for their banking requirements and why some of them are still hesitant to adopt mobile banking in Ethiopian banking sector. Also this article throws light on some of the eminent challenges faced by the mobile banking service providers, which can be seen as opportunities for the financial institutions and the bankers.
The rapid pace of adoption of next-generation mobile handsets in Asia and Europe has created opportunities for new and innovative mobile services. Some of the most promising, while still marginally adopted, are mobile financial services. Here, we investigate emerging mobile financial applications, including both mobile payments and banking services, showing how the new financial services can be deployed in mobile networks and identifying the main players in the emerging mobile financing value chain in Ethiopia. We use examples from Bank of Abyssinia to highlight the features of the new services as we explore the players’ particular strengths and weaknesses in providing the services.
Recently, the demands and requirements of banking consumers are altering quickly with the rise in the technological avenues made available in the banking world. Banking Customers have started demanding flawless, multi-channel service experiences. The result is forcing banks and financial institutions to facilitate them with the latest business models and banking solutions.
With the increase in the customer demands and expectations, it has become necessary for the banks and Financial Institutions to update and transform their retail distribution channel for banking services from a branch banking-dominated model to a multi-channeled service model. Mobile banking is one such channel through which ample business is getting generated for Banks.
III. Meaning of Mobile Banking
In a layman’s context, the term Mobile Banking means;
“Execution of Banking and Financial transactions using a Mobile phone” or “Availing banking services through a medium of cellular phone, without visiting the bank’s branch”
SMSs sent by bank on withdrawal and deposit transactions, credit card and ATM card usage notifications sent by bank, a call received from customer care department of the bank for critical transaction requests, Bill payments made from the bank balances through cell phone, transfer of money from one account to another using cell phone, etc. are all examples of Mobile Banking transactions.
Also it is the primary responsibility of the Banks (Mobile banking facilitators) to ensure that all the Mobile banking transactions are secured and performed on a real time basis.
IV. Key Players
The applications and solutions presented here seem to form an overly complex and mismatching set of possibilities. This complex structure of the mobile commerce business environment is caused by multiple players: traditional phone operators, Internet companies, content providers, and new m-commerce start-up companies, the various players having different backgrounds, agendas, and motivating interests (Paavilainen, J., 2001). Delivery of m-commerce applications and services requires the network, m-commerce technologies, contents, the user interface, and an efficient billing system. Each player has different strengths and weaknesses in providing these services and applications.
From the perspective of mobile financial services, the key players include banks and other financial institutions, such as credit card companies, the telecommunication operators, and retailers. Also, equipment manufacturers—of both handheld devices such as mobile phones and PDAs, as well as of POS registers and software vendors enabling the services—are incremental in creating the infrastructure.
Banks want to preserve their position as a central payment and banking services provider in the financial market. They are interested in participating in different pilot projects to see whether mobile technology has potential as a platform for financial services, and to protect their interests in the market. Banks are also interested in supporting their smart card standards (EMV) in the mobile environment. Credit card companies are interested in promoting mobile payment services especially in those countries and among those user groups where credit card penetration is low (Begonha, et. Al. 2002).
V. Behavioral intentions of consumers for using mobile banking services
Consumers will generally prefer using Mobile Banking over the traditional Branch banking for the following reasons:
- Mobile phone has already evolved as a familiar device in majority of middle class house holds
- Mobile Phone is always handy
- Sufficient guidance is available in using mobile phone for banking
- Mobile Phone enables fast and effortless banking transactions
- Service quality provided by banks, for Mobile Banking transactions is acceptable one
- Consumers are generally hesitant using Mobile Banking services for the following reasons:
- Mobile banking services cannot be used practically, due to expensive phone bills
- Data transmission rate is too slow while carrying out Mobile Banking transactions
- Mobile phone is found complicated in use due to Poor user interface
- Users have faced disappointment due to Malfunction of services and lack of operating instructions by Banks
VI. Challenges Faced by Banks and Financial institutions in facilitating Mobile Banking Transactions in Ethiopia (Bank of Abyssinia)
1) Security of financial transactions, fraud and identity theft issues are getting increased importance, as the mobile banking users need to be safeguarded against such malpractices.
2) Compliance issues are now being examined by governmental agencies, which include anti-money laundering compliance issues for banks, because cell phones, particularly those using prepaid accounts, (having few checks on the identity of the user) are popularly used by money launderers to transfer funds quickly, inexpensively, and anonymously.
3) There are no common technology standards for mobile banking. Various kinds of Client-based and Server based technologies are used, so there are Interoperability issues. A mobile banking solution usually is client specific and cannot have connectivity with multiple banks and hence becomes inconvenient for a user with multiple accounts. Also there are different kinds of mobile phone devices and it is a big challenge for banks to offer mobile banking solution for a particular type of device.
4) The Service offerings range from simple complex transactions like checking account balances, bill payments, alerts, loan statements, etc. to complex transactions like electronic wallet, forex payments, mobile financial advisor, etc. making it difficult for a technology solution provider to deliver on all parameters.
5) Again a same mobile solution may not work in every market, it should be market specific solution, and different markets should be understood properly. In developed markets, being an innovator is very likely to be a failure and also expensive.
6) Some consumers also have barriers in mobile banking adoption due to lack of awareness and understanding of the benefits provided by mobile banking. Therefore overcoming the perception of consumer risks and increasing the computer and technological skills literacy among the mobile phone user stands as a challenge for the banks.
The usage of Mobile Devices for Financial and Banking transactions could be made more effective by controlling mobile banking transactions by voice instead of opting for long typed sentences on the mobile devices.
Mobile banking has already evolved as a powerful intermediate towards efficient and real-time banking service. The Banks and the mobile banking service providers are working their way towards increasing consumer acceptance with mobile devices to carry out their banking transactions. The mobile banking service providers are teaming up with mobile banking technology vendors for consistently improving technology solutions that focus on creating a better consumer friendly experience with mobile banking. These technology advances will further increase consumer acceptance and ease with mobile devices
The principal value to consumers has always been time and location service fulfillment and this need will be further enriched enabled through the mobile channel. Mobile banking in the future will not be just about receiving SMS and transferring funds; but will evolve into a” mobile wallet” concept, thus opening up a gamut of opportunities for companies in the BFSI domain to tap potential customers.
And this is how mobile banking is raging to improve the customer service relationships as Advancement towards Consumer Value Creation.
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