Tuesday, November 02, 2010

Why is mobile banking different to online banking?

Four years ago, I wrote a blog arguing why mobile banking is not at all like Internet banking (Read here). Most (if not all) of the arguments are still very much applicable today. The biggest being that through mobile banking it is now possible to reach a large percentage of the world's population that do not have access to banking infrastructure. This in itself is a major revolution.

However, with the massive advances in mobile phone technology and the convergence of smart phones with tablet PC's and desktops, is it still possible to distinguish between mobile banking and online banking? How is it possible to distinguish between an Internet banking session originating from an iPhone browser, a iPad's browser or a MAC? The answer is that it is not possible. It is therefor possible to perform online (read browser-based) banking from a phone. Also, it is quite conceivable that a mobile banking app (written for the iPhone) can now be run on a iPad. Is this mobile banking or tablet banking?

What is needed, possibly, is to redefine online and mobile banking in different terms and utilise new terms to distinguish between the two. I would propose still using online banking, but rather refer to mobile banking as transactional (or message-based) banking. Mobile banking (designed correctly) have utilised the phone characteristics of being able to work with messages better and also support real time push capabilities. This functionality is of course now also available on PC's and can/should be utilised by banks for this form-factor too. Transactional banking would typically focus on payment transactions (bill payments, ad hoc person to person payments, cheque-related payments etc.) whereas, online banking offer much more sophisticated reporting and information representation capabilities.

The most important difference in my mind is recognising the difference in requirements in back office systems. Online banking and Transactional banking have very different scaling challenges and the design for the one (concurrent sessions), would be very different to the other (queue management). Also the security paradigm and risk management and mitigation are also very different.

It is clear that the boundaries between online and transactional banking are busy blurring, but by making this distinction, it is possible to design better banking applications.


Blackberry application development services said...

It’s the next generation thing. Basically it’s because different standards are used for mobile web which creates the difference, not sure about the exact details though but IMO mobile banking is more secured then online banking.

innjos said...

yes new technologies are currently over taking the banking industry with the view of enhancing security in mobile banking platform, but its not clear whether stakeholders are willing to embrace this technologies due the cost of moving from one legacy system to another with huge pack of customer data. however, there are still lots of challenge facing the mobile banking sector and only little can be done now to salvage the security problems, unless organizations, financial institutions and stakeholders put what they have together and work as a team, then this threat might linger for a very long time.