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Banks to open flood gates to m-commerce Back  
Secure mobile banking will be a killer application for mobile commerce, writes Irene Dehaene.
Within Europe the most advanced market for mobile phones is Finland with some 65 per cent ownership by the end of 1999. Ireland is coming close to this with the Information Society Commission here estimating mobile penetration at 50 per cent by the end of last year, after a surge of GSM phone sales before Christmas. Just as PC Internet access drove e-commerce into the US, the level of mobile phone penetration in Europe will speed m-commerce into the ‘old world’. In Ireland alone there are almost three times as many mobile phone users as there are PC based internet users, 1.45 million versus 0.5 million respectively in early 2000.

Killer applications
Ticketing and share trading are both set to be frequently used services over mobile phones. However the real ‘killer app’ is predicted to be mobile banking. In its WAP on-line offering, SFR found that amongst consumers, banking was the third most popular from a choice of twenty services which included things like e-mail, ticketing, news, sports and horoscopes.

A recent survey by KPMG and AIT into the UK banking market estimated that 28 per cent of all banking transactions will be carried out via wireless devices by 2005 and, as shown in the graph, that branch transactions will drop from 65 per cent to a staggering 10 per cent.

Several examples of mobile banking services have already been rolled out in Europe. In February Abbey National announced plans to launch its internet bank, Cahoot, which will be available both on mobile phones and PCs. It intends to spend Stg?200 million on it over the next three years and aims to have one million new customers registered for its e-commerce ventures within the next 12 months.

In the same vein, the German Hypovereinsbank has announced its intention to develop a limited wireless internet banking services in 2000 based on WAP in a move to strengthen its position amid rising European competition in e-banking and e-commerce. But these banks are not alone - UK’s National Westminster Bank and the Bank of Scotland also have plans to launch WAP-based mobile banking services this year.

M-banking in Ireland
Ireland reflects the increasingly hectic pace of life in European countries. With increased competition the banks are keen to announce their mobile banking strategies, not so much to win new customers as to retain existing ones. As with the internet, mobile banking strategy is proving to be one of ‘act and learn’ as opposed to ‘plan and act’. According to Forrester Research, 12 per cent of banks launched Internet services to win new customers whereas 46 per cent did it to retain existing customers.

Enabling secure mobile banking
One of the foremost considerations for any bank or financial institution when making its services available online is security. This is just as critical in the wireless world. At the GSM World Congress in Cannes this February, Jinny Software showcased full strength security to WAP for mobile commerce working with Baltimore Technologies. Our WAP Gateway now incorporates Baltimore’s Telepathy WAP Security Toolkit to implement WTLS (Wireless Transport Layer Security) within the WAP protocol.

Incorporating this security layer into WAP technology means that sensitive banking information, like balance enquires and bill payments, is encrypted all the way from the mobile handset of the user to the bank’s premises. The details of any banking transaction are completely concealed from all third parties, including makers of the technology, and can only be unencrypted by the initiating and end users.

Another technology gaining favour is the use of security certificates known as Public Key Infrastructure (PKI). Using PKI a digital certificate is issued to both the client (the handset) and the server. This identifies both parties and data can only be exchanged between the two on recognition of the appropriate certificate. It enables the bank’s customer to verify that it is in fact connected to the correct location

First, banking by text
Possibly the more realistic option for mobile banking, in the short term at least, is based on text messages or SMS. Offering banking services via text messaging enables banks to propose this service to the existing 75 million plus handsets supporting SMS that are already on the market today. The customer is not obliged to upgrade to a new WAP handset.

Next moves
For mobile commerce and mobile banking to become truly ubiquitous, offering these services to prepaid customers will have to be examined. In Ireland 58 per cent of the country’s 1.45 million GSM subscribers are prepaid customers. Prepaid WAP and prepaid mobile commerce may well be the next issue facing network operators worldwide.

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