A recent report from IDC Financial Insights emphasized that banks need to prepare themselves for the coming wave of mobile adoption to avoid being left behind by competitors and advices to take a more strategic look at mobile banking rather than evaluating it simply as an extension of online banking and bill payment.

Their recommendation is concordant with Sybase365’s findings of last year’s survey that revealed a bright future for mBanking with growing momentum worldwide. According to Sybase365, the most common mobile banking services currently available to customers include balance on demand, transaction alerts, money transfers, and balance alerts, with the goal to improve customer experience, to extend internet banking and to achieve competitive advantage.

Europe appears here most eager to take advantage of mobile banking, with 61 percent of mobile users interested in mobile services if offered by their bank. This compares to 40 percent in Asia-Pacific, and 37 percent of those surveyed in the Americas, who would like to be able to interact with their bank via a mobile device. In fact, in each of the regions surveyed, more than a quarter of respondents would consider switching banks if an alternative provider offered them free mobile banking. Thus, mobile banking could be an opportunity for banks to offer a value-added service as an incentive for new customer acquisition and customer retention, and on the other hand, promotion of mobile banking services will have a direct impact on consumer adoption of the technology.

While the study points to a strong interest in mobile banking, it also reveals that mobile banking is globally still in its infancy. The following interview with Tarik Husain, Director, mCommerce, Sybase 365, intends to shed some light on this issue. As part of its mCommerce offering, Sybase 365 offers mobile banking (mBanking), mobile payment (mPayment) and mobile remittance (mRemittance) and Tarik explains it to us in detail:

Mobile Banking

Sybase mBanking 365 is the only mobile banking product that offers a single connection to a complete, multi-channel mobile banking solution with SMS, intelligent SMS, mobile browser, and downloadable mobile client on a single platform. mBanking helps create cost savings to mobilize the banked and enable new services to mobilize the unbanked. The banks that make mobile banking a simple and secure experience for customers will get an edge over the competition.

• Mobilizing the Banked: Implement a mobile banking solution roadmap integrating all mobile channels and optimize the financial institution’s approach to mobile messaging.
• Mobilizing the Unbanked: Create low cost payment ecosystems in emerging markets to bank the unbanked with savings, money transfer and microfinance mechanisms.

Mobile Payment

Mobile payment opportunities create new services to mobilise payments, top-up and purchase content.

Mobilizing payment: End customers can make domestic person-to-person (P2P) payments to known as well as to unknown end customers. They can make remote and proximity purchases at various merchant acceptance points. Leveraging the same payment gateway, acceptance points can be vending machines, point-of-sale (POS) terminals, ATMs, contactless devices, web-enabled PCs, kiosks, mobile portals or Internet shops. End customers can pay for their utility bills, repay their loans and send money across borders to an intended beneficiary. They can deposit and withdraw funds using the mobile phone and traditional plastic cards.

Mobilizing top-up: End customers can top-up their own or any other mobile phone directly via the operator’s prepaid system or via an electronic voucher. They can use electronic payment instruments and set top-up rules. This allows end customers to go to a top up portal, share airtime within a network and transfer airtime across borders. Merchants can sell airtime or other credits directly from a cash register, a POS terminal, an Internet enabled PC mobile device or a mobile device to the consumer mobile phones. Merchants can also manage the typical hierarchical agent structures modeling large, medium and small sized merchants who distribute the recharge credits against commission within the merchant hierarchy or directly to the consumer.

Mobilizing marketing: Clients can maximize the end customer user experience through easy access to and interaction with all mobile Content, Commerce and Marketing services using any mobile channel (SMS, USSD, IVR, Mobile Internet, Downloadable Client) to process, interpret, route and queue SMS and USSD messages based on short code sharing and fault tolerant context matching, to process and allow a fast time-to-market with generic standard applications such as quizzes, voting and campaigns.

Mobile Remittance - mRemittance

mRemittance helps create new value to mobilizing money transfer across borders.

• Mobilizing remittance: enable efficient international mobile money transfer scenarios for senders and beneficiaries created via bilateral relations or multilateral hub relations.
• Mobilizing airtime transfer: enable small value transfers across borders by sending mobile credit from a mobile phone or through retailers to friends and family back home.

What is the adoption and usage for the mentioned Sybase365 products offered in Asia?

Adoption has definitely been gaining momentum and there are many opportunities available in the market. More countries are using the mobile channel as a transaction tool, as the use of mobile devices like handhelds and laptops have become pervasive, and people are more comfortable using them to surf the Internet and perform transactions.

What does it take to build, provide and implement an electronic banking / payment technology that supports millions of transactions via mobile phone?

In order to build, provide and implement an electronic banking or payment technology, companies need a strong understanding of existing in-country payment channels, a future-proof platform that offers scalability as well as a strong understanding of security and back end processing.

The Sybase 365 mobile banking platform offers the following features to support banks in achieving the above requirements:

• One Application Platform: Sybase 365 delivers a full range of mobile banking services; SMS, Rich Client and Mobile Browser channels, from a single application platform
• Rich Solution Set: The customer experience and usability are key design characteristics of the Sybase365 mobile banking product offerings
• Simplified Integration: The platform supports easy integration into existing back-end banking systems with over 100 pre-built adapters and supported protocols such as ISO8583, XML, etc
• Industry Standard Software & Servers: Operates on a wide range of commodity hardware and standard software configurations, and is architected with performance, reliability and redundancy in mind. The platform sits inside the bank, ensuring the security of customer data
  What are the challenges your company is facing regarding m-banking/payment?

Some of the challenges we have observed include:

• Usability – adoption rate has been limited due to the lack of user-friendly products. Sybase has a number of products that address the issue of usability, like Sybase Intelligent SMS
• Customer education – it takes quite a lot of time for banks to educate customers on the features, functions and capabilities of mobile payments, especially if the offering is complex to use
• Security – many implementations need to overcome the customer mindset of mobile commerce not being secure. Security really should not be a concern, as there are technologies in place to safeguard mobile banking and ensure secure mobile payments
• Compliance – ensuring that banks implementing the systems are compliant with industry standards and requirements

Do you see mobile banking and m-commerce as a competitive advantage for banks and shops, or do you see it just as a fundamental feature that is needed just to maintain a status quo position?

mBanking and mCommerce offer an absolute competitive advantage, and are the lowest cost channels for the delivery of services to market. It also allows banks to service customers from other banks, and open new revenue streams, as they are equipped with the right platform to offer mobile services to just about anyone, as long as he or she has a handset or mobile device.

For example, a large Canadian bank implemented mobile payments with the help of Sybase 365. The project enabled the bank’s customers to send and receive payments using their mobile device. The project also created a new mobile payment service, through which funds could be loaded, sent, received and withdrawn.

This shows the importance of why banks, when considering mobile banking, should plan out the processes, infrastructure and resources they require rather than implement the technology and then figure out what to do. It is crucial to look at the mobile commerce channel as a strategic channel for the bank and not just another channel to add. Taking a macro approach and looking at the whole ecosystem will enable banks to not only generate revenue, but also reduce costs.

We see the market evolving in the following manner:

• Phase 1 – mobile banking and services are launched as an access mechanism for customers
• Phase 2 – banks adding functionality to the services they offer
• Phase 3 – looking from a single channel approach – with more information alerts more transactions, and more payment options

In the long term, we see a decline in the use of plastic cards, and envision scenarios that include people using their mobile phone to pay for rounds of beers in bars.

Can you summarize the real value mobile banking can bring to financial institutions and their customers?

• Service Extension: The mobile channel allows a bank to deliver existing payments services, via a new channel. Customers are increasingly demanding convenience and 24/7 operating hours from their bank for transactional banking.
• Market Reach: Institutions can launch mobile payment services that serve both existing bank customers, customers from other banks, and even non-banked customers, empowering banks to generate revenue from everyone who owns a mobile phone
• Revenue Generation: The mobile handset has evolved from simply being a mobile banking ‘information’ portal to a full transaction portal. The platform allows a whole series of new non-traditional payments points to be created (parking, transit, POS, P2P, money transfer, etc). This allows mobile payments to happen anywhere

Mobile banking provides universal access via mobile across any network. What are your predictions for the future when it comes to mobile banking in Asia?

Asia, more than anywhere else, has a great potential for mobile banking. Excluding financial hubs like Singapore or Hong Kong, there is a large unbanked population in this region. This is coupled with the fact that there is a high usage of mobile devices than in any other region. It makes sense to launch mobile banking in areas where people have to travel for a while to get to the bank.

Is there a specific type of phone you would recommend as most suitable for your services?

When it comes to mobilizing banking, there is very little differentiation between the handsets offered in the market today. What is important is that the services offered are interoperable by all phones in the market today, regardless of brand or model. The customer experience and usability are key design characteristics of the Sybase365 mobile banking product offerings.

We all know that mobile business isn’t just about developing the application and putting it into the hands of the user, but that you have to figure out means to support and educate the different target groups. Can you elaborate on it regarding your products?

Letting bank customers know that the service is available and educating them about the perks of mobile banking is simple. What is difficult is the fact that for many services currently being offered, customers are required to remember lists of keywords in order to perform transactions or carry out processes.

Sybase mBanking 365 enables banks to avoid the keyword trap with Intelligent SMS, allowing customers to communicate with their banks in their own language through the natural language interface. This interface not only copes with spelling mistakes, but slang and SMS speak. With its unique disambiguation capabilities, it is able to guide customers – even when they do not know the command or syntax required.

What are your future plans? Do you have any exciting new projects in the pipeline?

We are currently negotiating a number of large regional deals with players. We are also witnessing a paradigm shift in the mPayments and mBanking business in Asia, and are leveraging this opportunity for our customers. 

How is your company dealing with the ever-evolving mobile threats?

We are constantly aware of evolving threats that are presented on the mobile platform. We are confident in our ability to handle such threats, and we ensure that our channels are kept as secure as possible. This experience comes from having more than 15 million end customers, and 20,000 merchants.

Indeed, according to Sybase365’s study, security is often seen as another barrier to the adoption of mobile banking, with 47 percent of respondents in Asia-Pacific and 44 percent in the Americas citing security as a concern, whereas European consumers seemed to be the least worried.

Processing more than 100 billion messages per year and reaching more than 700 mobile operators and 2.4 billion subscribers around the world respectively, Sybase365 proved not only with their insightful answers that they are knowing their job well.

For more information, visit: www.sybase.com/365.

By Daniela La Marca