Mobile banking focuses on challenges

MUMBAI, INDIA: Today, it is a known fact that a mobile phone is not just a communication tool but a multitasking device that throws ample opportunities for businesses. That was the mood at the international conference on mobile banking, 'Mobile Banking India 2009', held in Mumbai on Thursday.

Most of the experts and speakers at the summit stressed on the issues and challenges that are obstructing the onset of mobile banking services in India. These issues and challenges include, low popularity of mobile banking, lack of lingual support, weak network coverage in rural areas, different technologies, ecosystems and security needs.

According to John Kattakayam, mCheck's chief information security officer (CISO), the mobile banking concept addresses the limitation of Internet banking and stressed that everybody is talking of mobile banking and (mobile) m-commerce but for the users it is still more of confusion.

“For mobile banking services, the users face many problems right from the telecom operator to banks, the handset to software application support for using services. Above that still there's lack of trust while using mobiles for banking, so awareness needs to be created at large,” said John.

He added that there's need for multilingual service support rather than just two language support and for illiterate people there should be voice-based service support.

Representing the banking industry's view, Kotak Mahindra Bank's group head – Retail Liabilities and Branch Branch, K V S Manian said if mobile payments are ensured, then in future plastic cards and cheque payments can easily be made redundant.

Manian pointed out that there exists lack of standardization among mobile operators, m-commerce solution providers, device or product makers and the banks.

“There's a need of collaboration among competitors to have a common platform so applications can talk to each other. The Reserve Bank of India (RBI) has set the Real Time Gross Settlement (RTGS) platform as an open platform for banks and mobile operators, hence the industry should also have such common platform for settlements,” explained Manian.

But, he cautioned that due to security concerns, banks will not have mobile financial transactions and will limit just to non-payment based transaction service using SMS.

According to Probir Roy, PayMate India's co-founder and board director, the latest RBI guidelines for mobile banking will push towards mobile financial services - fund transfers, bill payments etc - via the cell phones.

While, Tata Teleservices' assistant vice president, Zubin Jimmy Dubash, quite in contrast to others, spoke on revenue sharing for catering mobile banking to subscribers.

“We are not NGOs here to create values for customers, but want to create values for us. And as telecos, we should also get benefits from the service offered by us,” said Dubash.

He added, telecos have far more penetration and reach compared to banks, so they should be used as a distributive channel.

He said mobile banking has flourished in countries like Japan and Philippines mainly due to less regulations. Here we have TRAI, DoT and RBI as governing bodies; that also should make less complicated regulations to help to grow mobile banking.

On mobile security, KPMG's director – IT Advisory services, Kunal Pande said that security needs to be looked across the chain right from user's handset to telecom operator, service providers to banks.

“Define minimum technology and security standards that helps to mitigate risk, provides authentication and security via encryption and follow a periodic reviews to address the threats and vulnerabilities,” suggested Pande. He concluded that security should not act as a speed breaker for mobile banking.

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