Column Banking on your mobile

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: his family needs to do is go to the closest retail bank outlet and encash the amount credited to their account.

That’s a sea change from the initial impression that such a service was meant for customers in developed nations. Today, it is emerging as a handy tool for meeting the needs of the unbanked millions across the developing world. Hundreds of micro transactions are happening on the mobile phone in the poorest regions of the world.

The biggest gainer in mobile banking is undoubtedly the customer. It provides him with a tool to manage his funds at any point of time. But for the banks it is an opportunity to access a whole new set of customers who would have other wise not entered a bank by themselves. By simply owning a mobile phone, today anyone can be a bank customer. Second, the cost of doing a financial transaction over the mobile network will be substantially lower than what it costs the banks today. As a result, these banks can cater to more people without actually opening branches in remote locations, thanks to the presence of the mobile network. It’s the next step for banks after the emergence of the ATM.

However, while mobile banking sounds good, most people are wary of using the phone as an instrument to do financial transactions. For mobile banking to take-off, it is imperative to build in adequate security measures. Protection of consumer data will be critical to the success of mobile banking. Since mobile banking covers banking, telephony and payment systems, there is a need to have a comprehensive legislation that looks at all the regulatory issues. Also, in case of any disputes, the customer should be able to redress his issues from a single authority.