Sybase Blog – Diarmuid Mallon

Introduction
Over the next 6 blog posts I’ll look to explore the evolution of mobile banking over the last few years. How it started, and in many ways has ended with SMS leading the charge. How phone based applications have lost the battle, but in some segments have won the war.

Any comments, thoughts and feedback as always are very much appreciated.

Applications are where it is at
Mobile banking, or mBanking as you will, where did it all start? The answer may surprise you that it started almost as soon as (GSM) mobile did, way back in the mid 90s. But we are going to ignore that.

Whilst mobile banking has a long history, that history was limited to a very few markets, often focused on market (or even bank) specific problems. What I will focus on is the shift in mobile banking that has occurred, primarily in North America over the last three years, and how banks and other financial institutions have found pragmatic solutions to a number of key mobile banking challenges.

In most markets, mobile banking was synonymous with SMS (or Text) banking. Banks like First Direct and Société Générale had been running successful SMS alerting services for many years. However, SMS banking meet with resistance in the States. There are many reasons that attributed to this, including a general lack of knowledge of the technology and “SMS receiver pays” model adopted by US carriers held back SMS Banking. However the biggest perceived problem was security. How could SMS be secure? (Addressing this misconception is something I will also omit from this article, as the perception is far more important than the reality of the situation.)

So US banks took a different approach; they focused on a thick client approach based on an application being installed on to the mobile phone.

This route looked to address all the perceived issues with SMS and mobile browser based solutions. Mobile specific credentials controlled access to the service, communications were encrypted to the bank’s specification, and the application provided a rich user experience.

So all was well?