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Mobile banking demand drives app development innovation

Karl Flinders

Barclays bank says its decision touse private cloud and Linux will help it cut development costs and compete in the mobile banking sector.

This year banks will invest in mobile banking platforms as the business case for these investments becomes easier to make in the light of increasing demand. Over a billion people will use mobile handsets to access banking services by the end of 2017, according to the results of a study by Juniper Research.

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So far, UK banks have largely emulated their online banking platforms on smartphones but – with increased demand for additional services on top of services such as payments and balance checking – this will change in 2013.

Banks in Asia and the US offer customers value-added services such as personalised, location-based offers. Consumers even choose banks based on mobile banking apps in Asia, says Rik Turner, financial services analyst at Ovum.

European banks lag behind Asia and North America and software development investments are expected to increase.

Barclays is a good example. About 12 months ago the bank, under the leadership of COO for Barclays' retail and business banking Shaygan Kheradpir, embarked on a programme of mobile developments.

In creating its mobile money platform, Barclays is using a private cloud and Linux to cut costs.

“This has delivered massive re-use of software, since their components are written once and used openly by many internal applications,” said a Barclays spokesman.

The costs associated with developing apps such as Pingit – which allows customers to make small payments via their mobile phones – will be reduced by 90%, says Barclays.

The bank has added over a dozen updates this year to Pingit and is now expanding internationally. “Our deployment speed for updates is 12 times faster than the old systems which would have required us to re-write from scratch,” said a Barclays spokesman.

Private cloud cuts software development costs

Employing private cloud for reducing the costs and time associated with software development is one of the most proven uses of cloud computing.

Electricity supplier Haven Power is using the Amazon Web Services (AWS) cloud to provide cost-effective access to computing power, when required, to develop systems.

The power of the cloud was demonstrated to Haven Power when it had an issue with a pricing server.

"When we had a problem with a system, I was telephoned, while travelling from Ipswich to London, by IT staff to ask whether they should build a replacement. We agreed to do this using the AWS cloud and by the time I arrived in London (about one and a half hours later) it was complete," said Paul Armstrong, business systems manager at Haven Power.

Armstrong said it would normally take a few days to complete such a task if the company had the computing capacity available in-house. If it didn't, the process would take a week, he said.

The costs when developing and testing new applications can also be cut dramatically.

In 2010 Wipro’s CTO, I Vijay Kumar, told Computer Weekly about the benefits of using the cloud to develop software. Wipro tested cloud computing out in relation to its software development business by building an internal cloud and connecting between 350 and 500 people to it.

Wipro found that setting up a software project is made faster and more cost-effective by doing it in a cloud.

Traditionally, when Wipro set up a software development project, the team it would have to get hold of computing power in the form of servers. This would take some time because they would have to request the kit, have the request approved and then wait for it to arrive. But through the cloud an email is sent to the cloud management asking for the computing power and it is allocated via the cloud. So the time and cost savings are easy to identify.

The other massive advantage is the removal of waste. Computing power can be more accurately allocated. Kumar said traditional server utilisation levels were between 20% and 30%.

 


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