Industry group Mobey Forum has launched a tailored-to-fit mobile banking solution that uses existing handsets and open technology, which it claims is simple and immediate. Stephen Timewell reports.
Mobile banking may not be a new innovation, but a mobile solution that genuinely works and is convenient, open and uses non-proprietary technologies would be quite a breakthrough. Mobey Forum, the industry group whose mission is to encourage the use of mobile technology in financial services, has just launched such a solution and it will be available for global implementation from June 30, 2003.
Unlike other innovations in this area, which have suffered through limited or impractical technologies, Mobey Forum has brought together its extensive membership, comprising 24 financial institutions, mobile handset manufacturers and consultants, to produce a solution based on financial industry requirements.
“The role of Mobey Forum is to promote mobile financial services based on open-architecture solutions or mass-market use,” says Bo Harald, Mobey chairman and executive vice-president of Scandinavian banking group Nordea.
“This solution capitalises on recent developments in handset technology to provide a software-based solution with no additional hardware requirement for the user, and therefore presents no delay to market. It is extremely simple to implement, convenient and immediate. I believe this is one of the most significant advancements made to the mobile banking services area.”
Latest generation devices
The new solution was developed by Mobey Forum member Meridea Financial Software – a Helsinki-based firm founded in 2001 by Accenture, Nokia, Sampo and 3I. It works with the latest generation of mobile devices supporting Java technology. The available transactions, which include paying bills, checking account information and the purchasing of stocks and shares, are linked directly to customers’ bank accounts and are enabled with a permanent PIN code, making the solution convenient and safe.
Unlike other approaches that may be reliant on specific bandwidth, this solution can be used by million of handsets already in use from a range of manufacturers. No new handset or hardware is required since the solution works on standard phones that support Java technology.
To get started, customers download the mobile banking software (for example, a Java MIDlet) to their handset to generate a digital signature. The software creates a public key infrastructure (PKI) based key pair, consisting of a public key stored on the bank’s server and a secret private key that is permanently stored on the customer’s handset. The customer uses the private key with a self-created PIN number that enables the PKI technology to authenticate the user and authorise any banking or payment transactions. This is done via a user-friendly interface directly linked to a customer’s bank account.
A key aspect of the Mobey solution is that the banking relationship, operator relationship and type of handset are all independent of each other, allowing fast mass-market adoption. But how many take up this solution – and how quickly they do it – remains to be seen. Mobey acknowledges in its June white paper that “the success of mobile banking services is heavily influenced by the general success of mobile internet services”. It adds: “Matching high security and high usability with low costs remains a challenge.”
But as Ron Karpovich, leader of the Mobey Business Workgroup, told The Banker: “We think that this is a product that fulfils the requirements of the white paper and we believe our banks will examine the business case for the product.”
Mobey Forum’s founder member banks are ABN Amro, BNP Paribas, HSBC, Nordea and UBS and full members are American Express, Banco Comercial Portugues, Bank of Ireland, BBVA, Credit Suisse, GroupeCreditMutuelArkea, The Royal Bank of Scotland, Sampo, Standard Bank and Union Bank of Norway. Now the software is in place the banks are expected to run pilots in the course of the year, ready for implementation in 2004.
Decisions pending
Although Mobey has done well to provide a convenient, secure vehicle for mobile financial services, there is no guarantee it will be accepted by either banks or consumers. Banks may decide for cost reasons that mobile banking represents one business channel too many, or they may see the opportunities in certain market segments and in different payment application areas such as ticketing and vending. No bank has as yet committed to the solution and they are said to be awaiting the results of the forthcoming pilots.
Consumers may then get the opportunity to decide whether such mobile financial services are of interest to them. The outlook for mobile banking is still wide open and uncertain but now there is at least an attractive solution on offer and it will be up to the banks to decide if they want to go with it.
