Text banking revolution coming your way
Banks are jumping on the mobile bandwagon and offering increasingly innovative mobile banking services. According to Jacob Jegher, a senior analyst for Celent’s Banking Group, ‘soon, people around the world will be using their mobile phone in place of their wallet.’ IMS research indicates that nearly 900 million users will complete an estimated 62 billion banking transactions with their mobile phone by 2012.
Text messaging was initially used as a customer relationship management tool in the financial services sector. SMS services included text messaging alerts or ‘point-of-sale’ mobile receipts giving peace of mind to customers about their financial transactions as well as playing a significant role in reducing incidences of fraud and identity theft. Mobile marketing campaigns were also used with great success, to acquire new customers and expand the brand awareness of the organization in new markets.
Today text messaging applications are being used for far more complex transactions, including mobile purchases and payments. These premium mobile banking services offer great convenience and value to customers but also act as an additional revenue stream for banks. When offering services such as prepaid airtime, electricity or gift vouchers through a mobile platform, security plays a far greater role than in the past. This is even more evident with the latest peer-to-peer mobile banking initiatives requiring only the beneficiary’s phone number in order to process the transaction.
There are a wide range of security measures taken by financial institutions for text banking. SSL encryption ensures that sensitive information is encoded and message tracking systems confirm delivery of confidential or time-sensitive information. Message escalation options allow for delivery to alternative contact details, until the customer acknowledges receipt of the message. Auditing, analyzing and reporting on message delivery and receipts are also important factors for mobile banks to consider.
Additional security measures that can be put in place for text banking include options such as 2-factor authentication whereby a secondary code or PIN number is dispatched to the customer via text message or ‘card not present’ measures where, following an online transaction, the user is sent an additional authentication token via SMS text message and needs to enter it online to complete the transaction. Concerns around PIN codes being stored on the device or in the SMS outbox are eliminated with mobile authentication measures involving secure channel switching from SMS to voice or audio entry of verification PIN codes.
Customers all over the world are demanding secure banking on the go. It’s only a matter of time. Financial institutions that have not already stepped in, are only waiting for their right time to make a jump and play their part in the mobile banking revolution.
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