Will People Use It?

It is such an amazing situation for me - this constant question: "will people use it?". It is like self-fulfilling prophecies. It seems to me that that is what analysts do. They take positions and then their positions make things happen... and we easily forget when they were wrong.

Take Y2K. Even weeks before 31 December, the world was only 63% ready. Yet nothing happened, except that the world spent billions to be "ready".
So why can't analysts get themselves to say that if banks don't deploy mobile banking they will be out of business in ten years.... like they did with Internet banking? Maybe it is because there is nothing sexy about stating the obvious. Lets just take one case study in South Africa. A bank called First National Bank (FNB), launched mobile banking in little more than two years ago. This is some of their results:

• Have more mobile banking customers than Internet banking customers within two years. It took them more than fifteen years to get to the same numbers with the Internet
• The monetary value running through their mobile banking deployment have risen to a point where it is conceivable to outstrip credit card purchase volumes in the next year.
• The service became profitable within eighteen months - now adding a sizable value to the bottom line.

Will people use it? Come-on, get real..

Mobile Banking Fraud!

Two cases of transactional fraud was recently reported in South Africa. The one related to the arrests of waitresses at a well-known restaurant. Waitresses were paid for "skimming" of credit card information, which were later utilised for fraudulent transactions. Read more here.

In the other it was reported that criminals conducted fraudulent transactions on ABSA clients, by swapping client's SIM cards. Read more about it here. This was a much more elaborate sting and was based on a security measure implemented by ABSA where a one-time password is sent to a clients cellphone for entry into a website. By swapping SIM cards, criminals could intercept this critical and important password in order to complete the fraud.

Both of these fraudulent acts were possible because of a weak Dual Factor Authentication (DFA)implementation (or the lack thereof). Criminals were able to steal clients' identity, because this was solely based on one factor (the card, or the mobile phone). If one managed to intercept this device (only one factor), one would have access to the client's financial information and it is possible to commit a fraud.

An improved version of DFA would have prevented these frauds. For instance, even if the SIM have been swapped, the one-time password would only be visible after entry of a private key, or if the card have been skimmed, could only be used if a secret PIN entry is required before a payment can be completed. Both these designs are incorporated in Fundamo technology, which makes it the most secure mechanism to interact with your bank.

Perceptions of Banking in Developing Worlds

It is a phenomena that many observers have seen: Mobile banking is taking off in developing world more rapidly than in first world economies. Many people have asked why? I have now come across a number of people that seems to imply that this is because people in developing countries are prepared to use inferior products, that they would not mind using mobile banking if it is insecure or not usable - this is so far from the truth and is an indication of a lack of exposure and understanding.

Mobile banking deployments in Africa are far more advanced (both technologically and conceptually) than what is available in other parts of the world. These solutions deploy the highest degree of security and design than any I have seen. (and I have been around). As a matter of fact these solutions represents a quantum jump in security and features. If true (which I think you may doubt anyhow), why would this be the case?

I believe this came about because of the following reasons:

a. Development of mobile banking in Africa was developed "under the radar". It was not scrutinised as is usually the case with advances in technology. Nobody felt like copying the developments or even to analyse them in more detail. This lead to the development of extremely advanced secure solutions over almost TEN years, without any-one else doing it.

b. Africa do not have any legacy systems. As we all know, legacy systems often constrain systems development. Mobile banking systems in the early days were not exposed to these constraints.

c. When you have very little and have lots of needs, you are more prepared to experiment. This was/is the case in Africa, where subscribers, corporates and governments embraced mobile banking as a means to alleviate many of the problems of Africa. Also in these situations you are more forgiving. This allowed mobile banking to evolve to a very powerful solution.

It pains me when people belittle the technology from developing economies. This technology is far more advanced than what is available in developed economies. If you don't believe me, come and have a look.

Mobile Money

Mobile Money is the brand that MTN banking also use in their deployments in South Africa and on their other networks in Africa. We are the primary technology partner for all of these deployments.

But then, "Mobile Money" is a very widely used brand name, as a simple Google search show. I know that everyone can do a Google search so at the risk of boring the reader I thought I would pick my fovorites:

1. Mobile money is the name of a lending company in the UK. I don't know why they call it MM - probably because the loans fly off the shelf.
2. In Malaysia Mobile Money is owned by entrepreneur Lee Eng Sia, who is also known for Cutie Compact toilet rolls which he pioneered and seems to be a well known brand in Malaysia. An yes, MM in Malaysia is the name of a mobile payment solution.
3. The mobile payment solution mPesa (currently being deployed in Kenya and supported by Safaricom/Vodafone) is supposedly Swahili for "mobile money".
4. Mobilemoney is the name of an application that can be loaded on the iPhone, Palm or Winodws CE devices with which you can manage your financial information.

So it is absolutely clear that Money is getting more and more mobile.