Monday, January 17, 2011

Given their track-record, can banks do mobile banking?

Contrary to popular believe, it is actually very difficult to do mobile banking. Not only does it require complex systems doing high volumes of transactions (with very high levels of availability), but business processes are also turned on its head. Many of the common banking principles of yesteryear do not apply anymore.

A few years ago, we viewed banks as the bedrock of society. The images of banks were solid and untarnished. The few (smaller) bank failures went by almost unnoticed. As we all know, this is not the case anymore. In many ways the images of many banks are very much different. The large stock of jokes and cartoons about the infallibility of banks are an indication of this.

Also the recent failures in bank systems (For instance, read here), have not helped to improve the image of banks. If average banks have difficulty keeping ordinary (low volume) systems like ATM's running smoothly, how much more difficult would it be to run real high volume systems like mobile banking? I think it is fair to ask if classic banks are really able to run mobile banking systems?

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