NatWest's recent plan to offer services based on the wireless application protocol (Wap) by April is a bold move for the bank, but a logical one. With online banking services on the rise, mobile banking using cellular phones is the next logical step for banks to take in a bid to improve customer service.
Such mobile phone-based banking trials using WAP and other more established technologies, such as short messaging service (SMS), are more common than you might think. Andy Agnew, e-business consultant at consultancy Cap Gemini, says that BT Cellnet has embarked on several mobile banking initiatives, including a pilot with Barclays Bank that enabled individuals to check account details via a phone, and a demonstration with Visa that enabled people to download cash to a Visacash card in a mobile phone.
Agnew describes a mobile banking initiative that Cap Gemini has been working on with OpenBank, a Spanish banking client. Integration with back-end systems is a major challenge, he says, adding that the consultancy had worked closely with the bank on a core banking system and had taken care to separate the back-end applications from the front-end delivery mechanisms. This meant that it could add new delivery channels into the system very quickly.
Displaying financial information coherently on a small footprint display is another big challenge, says Agnew. Given the sensitive nature of banking data, though, perhaps security is the major concern. If WAP-enabled banking is to work properly implementors will have to address the security issue.
One way around this could be the use of smart cards, says David Sharp, membership chairman of the Global Mobile Commerce Forum, an organisation foundedby Logica and BT Cellnet. GMCF's customerresearch reveals that customers would be happy to conduct everyday transactions over a data-enabled cellular telephone, but that security is one of their biggest concerns.
"There are political issues because the bank would feel more comfortable if it was using its own SIM card [in the phone] rather than the operator's," he says. "From the equipment supplier's point of view it has to decide if putting in the extra card slot into its handsets will drive sales."
Agnew argues that the initial level of service offered via Wap will not be overly sensitive, but as it develops, more security will be needed. The Wap Identity Model (WIM), a method of identifying the user via WAP, will make things easier, especially in conjunction with smart cards, he says.
Nevertheless, the retail bank's customer base is likely to be highly conservative when it comes to adopting these technologies. Immature channels of delivery mixed with personal information makes for a relatively shallow growth curve. Agnew agrees, pointing to the patchy growth of Internet banking services in the UK.
The most likely scenario is that safer Wap-based financial services, such as inter-account transfers between accounts held by the same person, and balance checking, will grow the fastest, says Agnew. The riskier transactions, such as payments between different people, may take a little longer to grab the market's attention.
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