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Welcome to Mobile Banking
Access to computer-based information systems is becoming increasingly pervasive; that is, the systems are available anywhere at anytime. Consider the banking industry. The earliest banks kept customers’ money and valuables in vaults, and each bank dealt only with its customers’ financial needs. Financial data networks were then created to support an interconnected banking system that allowed the transfer of funds electronically. Still, customers needed to visit the bank and speak with a cashier to deposit and retrieve funds. Next, automatic teller machines (ATMs) extended the electronic banking system to the customers and provided the convenience of banking in numerous locations, including out of town. More recently, banking services have extended to the Internet and Web, where a substantial number of bank transactions occur today. Because of online banking, ATMs, and direct deposits, bank customers rarely have to visit the bank.
The latest trend in computer-based information systems designed for banking is called mobile banking. Mobile banking provides banking services such as transferring funds, paying bills, and checking balances from cell phones. While mobile banking is well established in Japan, much of Europe, and elsewhere, it has been slow to catch on in the United States. Some analysts believe that this is due to banks’ and wireless carriers’ inability to agree on who should design and control the software. Others think that U.S. cell phone users simply aren’t interested in the service. A study by Forrester Research found that only 10 percent of Americans were interested in mobile banking, while 35 percent already bank online.
Ready or not, mobile banking is coming to U.S. cell phone users. AT&T, a large telecommunications company, is now offering online banking applications in partnership with Wachovia and other banks. Citibank has designed its own mobile banking software that can be downloaded and installed on more than 100 handsets over any carrier’s network. A new system called goDough has been designed by Jack Henry & Associates that delivers the same services offered at a bank’s Web site from the small display of a cell phone. Most banks and cell phone service providers believe that the time for mobile banking in the United States has arrived and are making moves to set the standard. Chances are that by the time you read this, your bank will be offering cell phone banking services.
When considering mobile banking, many customers are concerned about security. Sending private financial data over wireless networks poses more risk than sending voice and text communications. Mobile banking systems address these risks with security measures. Typically, a six-digit PIN is required for accessing account information. Secondly, mobile banking software does not store account numbers or PINs on the handset. Lastly, mobile banking communications is secured with 128-bit encryption so that it cannot be intercepted and decoded easily.
Mobile banking provides an interesting case study for mobile computer-based information systems. It illustrates the difficulties of getting customers to adopt new systems and disproves the notion that “if you build it, they will come.” Companies must invest time and resources to make consumers aware of the advantages and safety of mobile banking. If it catches on, mobile banking will pave the way for more electronic-wallet cell phone services. Countries that have a head start in mobile banking have moved on to use cell phones to pay cashiers in restaurants and stores, purchase items in vending machines, and buy a ride on the bus. Over the next decade, it is expected that the cell phone will become a user interface to thousands of different computer-based information systems.
1. Would you be comfortable using mobile banking for transferring funds, paying bills, and checking balances? Why or why not?
2. How might mobile banking attract the attention of hackers? Are the precautions discussed in this article enough to keep hackers at bay?
1. One of the few services not available through online and mobile banking is depositing and withdrawing cash. What would have to change in society to do away with cash all together?
2. What additional dangers are there for making payments with a cell phone, that don’t exist when making payments with credit cards? How might they be minimized?