Mobile banking, sometimes known as M-banking, is a term used to describe banking processes such as making payments, checking balances etc through the use of a mobile phone or PDA. In the past, mobile banking took place via SMS. Account holders could receive balance statements in the form of a text message from their bank. The introduction of smart phones has allowed users to carry out all their normal banking transactions through special client programs known as apps.
This means that customers can now transfer funds whilst on the move. It is even possible for users to receive updates on stock prices and perform stock trading when they are actually stuck in a traffic jam. As long as their phone can receive a signal, banking can be done from any location, meaning business can continue without the physical presence of a customer or bank employee.
The trouble with mobile banking
Mobile banking is not completely free from limitation. One such problem that banks are faced with is the difference between the mobile phones themselves. Mobiles have different operating systems and capabilities. Some phones will support Java, others will be WAP enabled, more basic phones will be SMS only. Creating a system that is reliable and works across all platforms is certainly a challenge for the companies involved.
Possibly the main issue is the security of the mobile banking system. The system has to ensure that if the mobile phone is stolen, the thief cannot easily access the phone user’s details. The main way of stopping this is through user ID and password combinations.
However, this is not the only way that the data can become compromised. When a mobile banking customer taps the information into his or her phone and presses “send”, this information is transmitted to the bank wirelessly. The confidential data is effectively floating through the air and if not properly encrypted, or if the encryption is decoded somehow, then hackers can more or less pluck this information straight from the sky it is travelling through and get access to the customer’s funds.