Why Mobile Banking is not Internet Banking

The Internet changed banking forever. It is impossible to consider banking without the functionality, the ease of use and the availability that Internet banking brought to the majority of people WITH bank accounts. This was a silent revolution and became prevalent in only a few years. During the 1990's banks started offering rudimentary banking services via Internet sites and early in the 2000 decade this feature was being widely used. The volume of transactions and the monetary value grew dramatically to a point where Internet banking is probably the biggest source of electronic banking transactions. (Credit card transactions may still hold the lead, but is loosing the lead fast).

With the deployment of Mobile banking solutions during 2001, many analysts expected mobile banking to end up as another type of Internet banking deployment. Many bankers expected mobile phones to provide just another "channel" to customers to access the Internet Banking portal. As a matter of fact I have heard many an IT architect in large banks talk of the convergence of channels to be supported by only one means of interacting with your bank. This was of course a big misconception, because mobile banking is fundamentally different to Internet banking and because of the following reasons:

1. The banking alert services that grew to be a major driver of mobile banking in many countries cannot be effectively implemented in an Internet banking paradigm. It is just not possible to send SMS confirmations to Internet users.

2. The security implementations possible with mobile banking is much more advanced (especially if the SIM card is utilised). This is because mobile banking security can be based on keys or certificates - the holy grail of electronic banking very difficult to implement with Internet Banking. The notion of carrying your banking keys in a device that you have with you all the time (your mobile phone) is extremely powerful and enable the deployment of new types of banking solutions never before possible.

3. The immediacy of mobile phones and the fact that it can probably be utilised anywhere (very few places do not have mobile phone coverage), allows for new types of solutions. Some of these solutions can be implemented in conjunction with existing banking operations. (E.g. allow clients to change a PIN on the phone after an ATM transaction, allow clients to block a credit card from a phone, enable a client to authorise access to personal information from the phone etc. etc.)

4. The best mobile banking deployments utilise message-based implementations (rather than session-based implementations which is prevalent in Internet banking). This architecture leads to significant differences in what is possible and how service is to be delivered. I will discuss this in more detail later on.

However, the biggest difference is the access that mobile banking have enabled to banking that have never been the case before. Internet banking enabled people to access their banking electronically only if they had been banked before, whereas mobile banking is leading to a revolution where people are being banked who never had a banking relationship in the past. This is largely because of the utility and functionality that is now being made available to people with cell-phones (which is much more than people with access to the Internet)