MOBILE BANKING: BACKGROUND, SERVICES AND

ADOPTION

Krassie Petrova, Auckland University of Technology

ABSTRACT
A new communications technology is redefining the convergence of telecommunications and computing. Mobile
banking has emerged as a possible powerful provider of bundled banking services. New platforms and protocols are
being developed able to create and support a support a seamless and truly global service platform. The mass
adoption of mobile banking will depend on the provision of secure, reliable and easy to customise user interfaces.
This paper examines some relevant standards and protocols for mobile banking and discusses mobile banking
services and their adoption within a conceptual framework.

INTRODUCTION
Literature sources suggest that financial institutions and telecommunication companies worldwide are facing a
new loop on the telecommunication-information technology convergence spiral. Mobile banking has emerged as a
promising new application of the next generation electronic commerce - mobile commerce. Is mobile commerce
prevalent? Siau et al (2001) point out that mobile commerce adoption strongly depends on the user infrastructure
(user-accessible mobile devices) and on the available network infrastructure (mobile telecommunications networks).
Authors like Pitruzzello (1998), Lan et al (2000), Guardini et al 2000), Kiesnoski (2000) argue that commerce
applications, including mobile banking, cannot be implemented successfully without an integrated and seamlessly
converging underlying infrastructure, and suggest approaches towards achieving coexistence and transparent hand-
off in a global coverage perspective. Others point out (e.g. Banai, 2001) that a co-factor for the successful adoption
of mobile banking is the timely development of value-added mobile banking services.

This paper is organised as follows: the next section briefly introduces a working definition of mobile banking,
then examines the technological developments which lead to the emergence of mobile banking, followed by a
discussion of the standards and protocols available for the implementation of mobile banking applications. Mobile
banking services and adoption examples are described. The last section contains a review of some of the predictions
about the future of mobile banking and is followed by a conclusion.

MOBILE BANKING: DEFINITIONS AND BACKGROUND

DEVELOPMENTS
The Internet in its present stance can be viewed as one of the commonly available distribution channels. In the
mid 1990’s, almost immediately after embracing the Internet as a channel for banking services, banks started and
telecommunications companies started to work together towards the development of an online banking service based
on mobile telephony. Projects were developed aimed at enhancing the screen and the keyboard of the mobile phone
trying to convert it into a usable, portable and foldable “pocket “cash point” device (Warren, 1995). By that time
banks and other financial institutions had already realised the huge potential of the Internet and the increasing need
for more Internet banking, and some of then were quite appreciative about the possibilities of the future online
banking services market. It was anticipated that banks would change their role from that of a finance-only provider
to a financial information provider with future banking conducted through a mobile phone.
 How did banks use the Internet? According to (Seitz & Stickel, 1998) end-user banking encompasses four classes
of services: i) information presentation, ii) information presentation combined with two-way communications, iii)
real-time interaction, and iv) transaction banking. Online Internet banking applications typically fit into one or more
of the first three categories. Examples include logging in into an account to view account details, or analysing an
investment portfolio using a built-in suite of mathematical models. Users are commonly asked to authenticate
themselves but most of the information needed throughout a session would be supplied by a back-end customer
database into which all relevant data is pre-stored.

While applications like the ones described above might be conveniently carried by a customer sitting in front of a
personal computer in an office or at home, the personal computer is not always the best platform for the delivery of
– one of the reasons being the fact that personal computers are often shared among members the members of the
family or among co-workers (Birch, 1999). In addition, personal computers are stationary desktop devices. Mobile
phones, on the other side, are truly personal. They are meant to be carried by their owner and not used by another
party. The implied privacy and its portability made the mobile phone particularly well suited for financial services
requiring high degree of confidentiality and flexibility, and gave rise to the phenomenon known as “mobile” or
“wireless” banking.

Is mobile banking a subset of online Internet banking, as classified in (Muller-Veerse (1999)? While true in some
aspects, this definition is too narrow to include all features of mobile banking. In this paper mobile banking
definition is derived form the definition of the broader category of mobile commerce, which in turn is a subcategory
of electronic commerce.

The definitions of electronic commerce, electronic business, and the related business models are constantly
evolving. Following both academic and industry based literature sources Mitchell (2001) defines electronic
commerce as “much more than buying and selling on the Net: [electronic commerce] is about doing business
electronically, both within enterprises and externally, using computer networks and mobile communications”. This
definition is general enough to be used as a reference point. Mobile commerce and mobile banking are discussed in
the next two subsections.

Mobile Commerce
Features of mobile commerce not found in traditional commerce outlined in (Siau et al 2001) include ubiquity,
personalization power, and flexibility. Mobile commerce is different from electronic commerce: electronic
commerce is conducted via stationary-networked devices while mobile commerce is supported by mobile wireless
networked devices (Varshney et al, 2000; Siau et al, 2001). Mobile commerce is characterised by i) the opportunity
it provides for a personalised and immediate purchase, and by ii) the opportunity to conducting bank transactions
using money funds. This “beaming money” feature of mobile transactions can be expanded to cover transactions
based on various forms of electronic money.

A popular Web based encyclopaedia defines mobile commerce as “the buying and selling of goods and services
through wireless handheld devices such as cellular (mobile) phones and personal digital assistants (PDAs)”i. An
extended definition found on the Web page of a prominent mobile device manufacturer states that ”mobile
commerce is the use of wireless devices and data connection to conduct transactions which result in the transfer of
value in exchange of information, services or goods.”ii Further discussion is based on these three definitions.

Mobile Banking
Mobile banking can be defined as the ability to conduct bank transactions via a mobile device, or more broadly –
to conduct financial transactions via a mobile terminal (Drexelius & Herzig, 2001). This definition is a suitable
working one as it includes not only basic services such as bank account statements and funds transfer bur also
electronic payment options as well as information based financial services (e.g. alerts on account limit or account
balance, access to stock broking). It compares ell with the definition found in (Kiesnoski, 2000) where mobile
banking is referred to as the “ability to bank virtually anytime, anywhere”. This definition needs to be expanded to
include the two different types of customer account access: a Web based interface and a simple text-messaging
interface. This addition is important as it differentiates between the two network infrastructures for mobile
commerce: the global, public, and ‘free’ Internet, and the cluster of regional, public, and paid wireless
telecommunication networks.

Is there a need for mobile banking? The answer is a firm “yes”. Although consumer demand for more
sophisticated mobile services has not been very strong, demand for basic mobile banking is more pronounced
compared to the general demand for mobile commerce services (Bansai, 2001). The number of wireless digital
device users worldwide will reach 0.5 billion by 2003, according to some projections (Kiesnoski, 2001), and an
estimated number of 40 million wireless users will have access to mobile financial services during the same period.
Accordingly, financial institutions are planning to spend on the development and marketing of wireless devices
(about US$40 million in 2003)iii. Many predict that mobile banking is going to be the most important mobile
commerce application. Viewed as an additional channel to enhance customer relationship management, mobile
banking enables both financial institutions and telecommunication network operators to strengthen their relationship
with existing customers, to extend their general user-base and at the same time to target specific, more lucrative
niche market segments (Horton, 2001). The widely quoted report (Muller-Veerse, 1999) classifies mobile financial
services as a key commercial driver for mobile commerce. Based on survey by Datamonitor, which predicts that in
2004 about 16 million Europeans will conduct their banking in a mobile way, the editor of the Credit-Suisse
publication “Bulletin Online” classifies mobile banking as the killer application for mobile commerce (Maier,
2001).

As already indicated provision of mobile banking relies on a mobile end-user device; currently there are in fact
two basic types of mobile end- user devices – the mobile (cellular, cell) phone and the portable handheld computer
known as Personal Digital Assistant (PDA).

Mobile Telephone Services

Digital mobile telephony in Europe and Asia is dominated by GSM (Groupe Special Mobile, or Global System
for Mobile Communication) which holds more than two-thirds of the digital wireless telephony market. Digital
mobile services offer voice communication and secure data communication Mobile phones are equipped with a
smart card (Subscriber Identification Module card, or SIM card). The SIM card can store user data; text messaging
is enabled trough a special stored application known as Short Message Service (SMS). SMS is popular worldwide
but especially in Europe According to (Birch, 1999) the SMS usage in Western Europe amounted to 1 billion
messages per month in 1999, and the number was doubling every six month. At that rate we should have had
something like 16 billion messages in the first half of 2001 – and some of the figures available confirm this
prediction. According to Mobile Data Association as reported in (Cronin, 2001), in January 2001 over 900 million
messages were sent in the UK alone. This represents a 300% increase compared to January 2000.

The basic functionality of the SIM card was extended as early as 1993 to support additional cervices. The
extended platform is called STK (SIM Application Toolkit Specification). It allows different operators to load their
own applications into the SIM, with full access to the keyboard, the menus and the communications network. These
applications can offer new value-added service to the owner of the mobile handset – and among them, access to
mobile transactions (mobile banking) based on SMS The steady growth of GSM users, who by the end of 2001 will
reach 175 million in Europe, 67 million in Asia-Pacific and 11.5 million in North America, suggests that the number
of mobile banking users will also grow. A study conducted at the Keyo Business School (Tokyo, Japan) which
compares the growth in fixed and mobile telephony indicates that the global number of mobile subscriptions will
reach 500 million by the end of 2002, with a significant number of users having more than one mobile handsetiv.

The installed mobile device base, the security offered by the platform and the level of standardization achieved
provide a reliable platform for personal financial services. Early adoption of such services examples include a
number of banks in Scandinavian countries, but also Citibank in Singapore (Birch, 1999). Currently, services offered
to subscribers vary from checking an account balance to making a bill payment, transferring funds. More innovative
services include level alerts, automatic payment, direct payment (eg a car wash). And, current developments include
applications based on the standard for mobile devices known as WAP (Wireless Application Protocol), which allows
full access to the Internet.

Most authors (eg Senn, 2000) agree that mobile phones will continue to be an important and significant part of the
part of the underlying infrastructure for mobile commerce and will be the device of choice for mobile transaction
management, digital content delivery, and telemetry services. Still there is another device which will play a role in
transaction banking applications - the PDA.

Personal Digital Assistants

PDAs are computers. They were designed to be portable and to be used with applications for efficient data
storage and retrieval. Unlike mobile phones, which operate on firmware, PDAs have an operating system and
software can be installed. A PDA becomes a wireless device when a wireless modem is attached to it. Although a
PDA is conceptually not different from a personal computer, its physical characteristics require a different approach
towards accessing Web based resources (eg an interface designed for a smaller screen). The World Wide
Consortium (W3C) developed a protocol (WAP) which fills-in this gap. Mobile banking with a PDA is not very
much different from online Internet banking – the customer accesses the bank’s site and after authentication gains
access to his/her account and to the services offered by the bank.

What is the future of the user-end devices? Varshney et al (2000) predict that in the future the distinctions
between PDAs and mobile phones will disappear as more intelligent mobile devices evolve while Muller-Veerse
(1999) firmly states that the future belongs to WAP enabled mobile banking rather than to STK based one.
Currently, some Palm Pilot PDAs are used for navigation using GSM, and some new models include a built in
wireless modem. Mobile phones have the advantage of carrying voice communication and are more pervasive than
PDAs. Another of their advantages is the strong built-in encryption, so the question seems a difficult one.

To summarise this section: mobile banking based on mobile phones utilizes the capabilities of the STK, while
PDA based mobile banking requires a special application protocol. In each case, the financial institution needs to
maintain an interface application linking the individual user to its databases. A conceptual framework of mobile
banking operations is shown in Figure 1 It includes some protocols and technologies which will be discussed in the
next section.

Communication Technologies And Standards For Information

Exchange
Mobile banking enabling technologies fall into four main categories: network, embedded systems, databases, and
security (Siau, 2001). Mobile banking applications are based on the interaction between available communication
and information exchange standards supported by the wireless infrastructure.

Communication Technologies
Mobile communications standards evolution encompasses 2G (second generation) communication (an example
of which is GSM), 2.5G technologies, and 3G (third generation) technologies. The de facto standard in global
communications is GSM. In contrast to analogue cellular standards, which are specified only at the level of the air
interface, GSM is fully specified and all subsequent generations derive from the initial standard.

While second generation GSM is a dial-in, circuit switched service which operates in the 900 MHz and 1,800
MHz frequency bands, the 2.5G network technologies (GPRS - General Packet Radio Service, and EDGE -
Enhanced Data GSM Environment) are packet switching data services which can achieve data rates up to 115 Kbps
and 384 Kbps respectively. EDGE is designed for multimedia applications. The two technologies are compatible
with the existing GSM infrastructure.
 Figure 1 A Conceptual Framework For Mobile Banking Services

STK STK
Data link interface Existing
interfaces-
layer: TDMA,
ATM,
CDMA. GSM EFTPOS,
Physical telephone
layer banking,
credit card,
Bank e-com
WAP payment
TCP/UDP options
IP (digital
Data link WWW cash,
layer: TDMA, interface - SET,electro
nic
CDMA. GSM HTML/WML cheques)
Physical
layer

Expected
convergence

A representative of third generation technologies is UMTS (Universal Mobile Telecommunications System)

which offers packet-based transmission of text, voice, video, and multimedia with a permanent connection to the
Internet at a speed up to 2 Mbps (Guardini et al, 2000). A 3G mobile phone is in fact a multi-purpose device which
can be used as a phone or as a computer. Multiplexing techniques for UMTS include wide band-CDMA (W-
CDMA) and time division-code division multiple access (TD-CDMA). One of the prominent applications of 3G
communication is the Japanese standard NTT DoCoMo.

There is a trend towards continuous improvement of wireless networking technologies. While 3G has been
launched in Japanv and is expected to penetrate Asia/Pacific and Europe in by 2002, fourth-generation technologies
are already researched (Vetter, 2001). According to (Royce, 2001), every second five new subscribers join GSM and
it is expected that by 2003 wireless connections to the Internet will have overtake fixed-line connections.

Wireless Application Protocol (WAP)

The WAP standard for wireless communications takes into account the limitations of wireless data networks
compared to wired networks and the limitations of mobile handsets compared to personal computers. WAP is a
client-server application standard for mobile devices and website servers (Matskin & Tweit, 2001). It allows the use
of mobile phones for Web browsing and email messaging. The implementation of data compression and error
correction techniques allows WAP enabled devices to provide high quality data transmissions over slow and not
always reliable GSM. The mobile WAP terminal runs a microbrowser, with WAP applications downloaded on
demand and erased when not in use. To ensure compatibility over different wireless network structures, WAP
maintains different software protocols so that applications can run independently of the transmission formatvi. The
WAP standard enables a device-independent user interface based on the WAP markup language (WML). Other
standards have been developed as well –among them compact HTML (c-HTML), implemented with DoCoMo.
Recently, the WAP Forum announced the release WAP 2.0, which supports XTML (extensible HTML).
Bluetooth
Bluetooth is a short-range radio technology which allows digital devices to transmit and receive messages at
distances up to 100 m without pointing. It operates in the 2.4 – 2.83 GHz range which is available practically
everywhere in the world as an unlicensed band. Within conventional wired environments, Bluetooth can connect
devices like computers and printers with cell phones. Though not yet perfect the Bluetooth technology can play a
prominent role in wireless payment applications, enabling a mobile phone or a PDA to access payment networks
like ATMs (Halperin, 2001). A WAP enabled Bluetooth mobile phone provides connectivity between the phone and
other mobile devices and links the phone to the mobile Internet vii.

Smart Cards
A somewhat different approach to enabling mobile phone banking is based on smart-card technology, where the
service platform explores a synergy between an additional, bank-issued smart card and the SIM-card. This approach
allows a number of additional cards to be used. It also supports the mutual independence between communications
network operators and added-card issuers A designated mobile banking STK application can control a range of
additional cards such as the already available chipcard credit and debit cards (Birch, 1999). A WAP enabled mobile
phone can operate additional smart cards for online mobile banking, and added-cards can be multi-application ones
– to enable the creation of targeted services for individual customers. Added smart cards allow for strong
personalization but are less flexible in that aspect (unlike WAP which allows dynamic exchange of information).
This deficiency can be overcome through downloading from designated added-card servers but would be more
costly (Biddlecombe, 1999). A less flexible approach to smart-card implementation involves the introduction of a
dial-up central server which stores personal data and complements the “slim” smart card installed in the device.

More general purpose Java-based SIM cards have been developed, and are used to manage subscriber
relationships and to configure remotely mobile handsets. A backend database is used, and Java applets are
downloaded to the mobile device, which needs to be equipped with the new generation SIM card. In this scenario
the mobile user can access the server via the GSM network as well as through the Internet. A Java SIM card
(Simera) has been trialed by companies in Europe, Canada, China and Japan (Daniels, 1998; Biddlecombe, 1999;
Schlumberger-Sema, 2001).

MOBILE BANKING SERVICES

Literature descriptions of cases of mobile banking adoption (eg Muller-Veerse, 2001; Siau et al, 2001; Engen,
2000) suggest that basic mobile banking services include familiar activities such as account balance/ credit limit
checking and funds transfer – not different from the services offered in many of the other customer formats. While
customers expect new types of services to be offered by the new technology, innovation in mobile banking faces
some challenges. One such example is the way the new technology is managed in an environment where “new tools
and products leapfrog others that have only been recently introduced” (Stewart, 2000): Stewart points out that
mobile banking is likely to supersede PC-banking over the Internet just as Internet banking took over PC-banking
over private networks. Another challenge lies in the correct choice of new services; as mobile telecommunication
offers possibilities far beyond traditional commercial banking decision-making cannot rely on historical data or
market research data. The answer might lie in service convergence and in service bundling.

Integration and Bundling

Many researchers suggest that in the future it would not be enough to offer a mobile banking service, a telephone
banking service, or an Internet banking service as a separate consumer-oriented application. According to (Praveen,
2001) customer demand will bring the convergence of mobile- and Internet banking into an integrated platform able
to support all customer interfaces (including branch banking). Integration will affect not only specific, bur also
diverse services. An example can be found in the discussion by (Altinkemer, 2001) of the phenomenon of
“bundling”. Cases include companies which first buy services from source providers (e.g. long-distance phone
service, Internet connectivity, or wireless telecommunication) and then resell them as bundle to their customers –
typically medium- and small-size companies. Altinkemer observes a similar phenomenon in the banking industry:
financial institutions offering wireless transactional banking bundled with brokerage services (called “bankerage”).
In the future, mobile customers will be able to utilise the information retrieval capacity of their services provider to
track and analyse their own service usage patterns and customise the “bundle”.

A mathematical model of banking technology and production developed by Peteiro-Novo (2000) also supports
the notion of bundling. According to the model, the diversification of financial services occurs at two separate
levels, the first of which represents an expansion of the existing level of basic banking services. Bundling of services
occurs at the second level of diversification, where the expanded set of services is offered to the customer. Peteiro-
Novo suggests that in certain circumstances new information technologies tend to create new markets for bundled
financial products and services. There is no single solution to the question ‘what to offer’. Ultimately each bank will
decide for itself what service to offer and which interface to utilise. As Engen (2000) remarks, banks face the risk of
disintermediation if they do not align with wireless network providers and try to capture their share of the evolving
electronic commerce payments systems. The next section briefly presents some cases of mobile banking adoption.

MOBILE BANKING ADOPTION

As demonstrated by numerous examples, European countries (Scandinavian countries, France, UK, Ireland,
Germany) alongside with Canada and Japan are among the leaders in mobile banking (see for example, the
Datamonitor report “eBanking in Europe in 2001viii”; Yoshida et al, 2001). While in some Asian countries
(Singapore, Malaysia) mobile banking penetration is on the increase, Australia and New Zealand are among the
“slow” adopters. Initially hesitant, USA-based banking institutions show significant interest in mobile banking as
the penetration of mobile telephony picks up strength. The next section describes in some detail the cases of
Australia, New Zealand and the USA.

Australia And New Zealand: Cautious Progress

The first interactive mobile telephone banking service in Australia was launched in late 1999 by the
Commonwealth Bank of Australia (CBA) and Vodafone (Creed, 1999). Services offered included access to
customers’ account balances, funds transfer and bill payment menu. Security and confidentiality issues were
addressed through password protection and encryption. Currently the service (called MobileBank) covers all areas
included in the Vodafone coverage. The technological basis for the service is a prescribed handset and a WAP-
enabled SIM card. The second of the four major banks in Australia - Westpac, has launched a mobile banking
initiative jointly with the mobile and fixed telephony provider Telstra. As in the case of CBA, customers have access
to account balances, funds transfer and bill payment, and need to have a prescribed mobile phone unit operating a
WAP-enabled STK. Security issues are addresses through username/password authentication and 128-bit encryption
(Saathye, 2001). The other two banks – ANZ and NAB have announced pilot projects (Sathye, 2001); according to a
recent report in News Bytes News Networkix, ANZ has put on hold its mobile banking development started earlier
with Telstra.

One of the more interesting developments is the launch of new mobile product by the NASDAQ –quoted
company “Aspect Communications”. The product provides ‘live services’ to Palm pilot or mobile phone users.
As reported by Stackhouse (2001) among the firms who have signed up for the product in Australia are Vodafone,
American Express and BankWest. There seems to be a trend in the adoption of an integrated solution. As Kung
(2000) observes banks need to develop an understanding of the business models which will evolve between banks
and network operators before they embark on a mobile service provision platform, and adopting a solution provided
by a third party signifies the acceptance of a model offered by the solution.
 The only bank in New Zealand to offer mobile banking is ASB x. Its Fastnet Mobile service was launched on the
CDMA network of telecommunications provider Telecom New Zealand in July 2001. Although it is currently
available only to Telecom mobile customers equipped with the latest model CDMA mobile phones, the bank plans
to extend the service to other telecommunications networks in the future. Banking services are very basic – account
balances, funds transfer and mini statements. It is interesting to note that in 2000 ASB trialed a Simera smart-card in
cooperation with GSM operator Vodafone, but did not launch the servicexi.

North America: Growth

By the end of 2000, at least four major North American banks were offering mobile banking services: Bank of
America, Harris Bank, Key Corp and Waichoviaxii. Services included basic access such as account information,
funds transfer and bill payment. A study conducted in 2000 by the Boston Consulting Group reports that fewer than
one-third of U.S. wireless device owners have attempted mobile online purchasing, and 20 percent of those who
have tried quit after the first few attempts” (Enos, 2000) – partly due the gap between user expectations and the
realities of mobile delivery, and partly because of the inadequate pricing structure.

Current predictions for the USA consumer market, based on reports by the Strategies Group and the Yankee
group (Siegel, 2001) estimate a 60 percent penetration of wireless services by 2007, and 1 billion wireless devices
by 2003. The number of USA companies embracing mobile banking is on the increase. Among them is one of the
twenty largest credit unions in the country - Wescom Credit Union. Its service is a no-fee one and access is through
a WAP-enabled mobile phone or a PDA. The platform is provided by ClickServices, which supports several
hypertext languages. Another credit organization – the Credit union of Texas, has recently launched a mobile
banking service (Nelson, 2001). According to (Halperin, 2001) over 27 credit unions and a number of community
banks have joined mobile banking.

In mainstream banking, names of banks that have launched a wireless initiative in the last twelve months, include
Chase Manhattan, Netbank, Claritybank, First Union, Wells Fargo (Halperin, 2001; Power, 2000). The platforms
used implement WAP. The range of services varies from account information and tacking to brokerage. The number
of wireless banking users in the USA remains small (around 200000, compared to 28 million in Europe and Asia).
The potential user base level of interest is reportedly low (84 percent of non-Web using customers expressed no
interest in mobile banking, and around 75 percent of users already using the Web for banking also expressed no
interest).

Ostergaard (2001) discusses the success factors in adopting mobile banking and points out that in the United
States the general level of cell-phone penetration is relatively high (around 40 percent) but is split among four
incompatible systems. An added hurdle is the need for many and diverse communities to jointly and concurrently
implement the new payment methods, and to equip millions of point-of-sale terminals with need additional hardware
and software. In the USA paper checks are still widely used and the banking system lacks the interoperability
already achieved in European countries, and Ostergaard concludes that considerable delays might be expected in
mobile banking implementation. An initiative to set up standards for compatibility, interoperability and transaction
security has been under development for the last twelve months under the auspices of the Financial Services
Roundtable (Bach, 2001).

TRENDS IN MOBILE BANKING ADOPTION

Banks, the consumer community, and mobile network operators are the major stakeholders in mobile banking. If
financial institutions want to take advantage of the new and emerging telecommunications technologies, the
integration of telecommunications and information technology must address the needs of the end-users – bank
customers. Although mobile banking is still predicted to be a trend, some industry reports conclude that mobile
banking services do not have any real impact on bank profitsxiii and this makes banks more reluctant to adopt mobile
banking especially in countries where other banking methods are well established, or the market is relatively small
(for example, New Zealand).
 Consumer interest is showing signs of decrease not only in the USA but also worldwide. A survey conducted by
the Chicago-based consulting firm A.T. Kearney (in cooperation with the Judge Institute at Cambridge University in
England) over more than 1,600 mobile phone users in the USA, Europe, and Asia found that only 12 percent said
they intend to engage in mobile commerce transactions - down from 32 percent a year ago (Brewin, 2001). The
results indicate that a main reason behind the lack of consumer interest is the perceived voice-centric nature of the
mobile phone. The study concludes that despite the huge investment into bringing the mobile data services into the
marketplace, consumers have not yet changed their buying habits.

Another report indicates that mobile network operators themselves show a considerate lack of enthusiasm about
mobile banking (InfotrackWeb, 2001). A Forrester research study finds that although companies like Orange and
Vodafone are planning to compete n the field of mobile banking services, it would take a significant amount of time
to build up easy-to-use, cheap, secure and standardised technological infrastructure for mobile banking. According
to the report, only 0.5 percent of consumer spending will be through the means of mobile payment, and the expected
10 percent growth in transaction volume is “actually at least a decade away”.

Among the barriers to mobile banking adoption, most authors quote security and privacy issues, opportunities for
fraud, low speed (GSM), unreliability (GPRS), lack of standards, lack of diversification in services, lack of
consumer awareness, high costs, and the prevalence of other banking methods.

CONCLUSION
In the early 1990s banking services providers started a massive re-engineering effort to realign their online
services with the emerging Web platform of global communication. Now, a new communications technology is
redefining the convergence of telecommunications and computing and is helping to define mobile banking as an
unlimited provider of basic banking services bundled with diverse applications such as electronic commerce
payment and brokerage. New platforms and protocols are being developed to support seamless and truly global
service platform.

Universal mobile telephony and mobile data communications involving all spheres of banking and financial
activities, including public and private networks, at home or at work, in any country on all continents will not be
achieved overnight. Progress will depend on resolving a number of standards and interest groups issues. The mass
adoption of mobile banking will depend on the provision of secure, reliable and easy to customise user interfaces
which can be implemented on a multi-standard, multi-functional mobile devise designed for a long life and rugged
service (Royce, 2001).Further research into the reasons for non-adoption or failure of mobile banking projects might
reveal useful insight into the true driving forces of the phenomenon – including a more complete picture of the
world-wide adoption of mobile banking (including Europe, Asia, Canada – as well as Latin America and Africa),
and a comprehensive framework for understanding mobile banking business models and the associated critical
success factors – including peer-to-peer mobile banking.
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ENDNOTES

i
http://searchnetworking.techtarget.com/sDefinition/0,,sid7_gci214590,00.html 1/12/2001
ii
http://www.nokia.com/networks/systems_and_solutions/solution_main/1,23797,92,00.html 1/12/2001
iii
Quoted from “Wireless Financial Services”, Meridien Research, Cambridge, Mass., 2001
iv
http://www.ecrp.org/english/MWP/Worldwide%20developments/worldindex.htm 30/10/2001
v
www.lalettre.com/techinfos/today.cfm 30/10//2001
vi
http://www.wapforum.org/what/technical.htm; http://forum.nokia.com/ 10/02/2002
vii
http://www.bluetooth.com/ 10/02/2002
viii
http://cyberatlas.internet.com/markets/finance/article/0,,5961_878751,00.html 10/02/2002
ix
http://www.newsbytes.com, 21/08/2001
x
http://www.asbbank.co.nz/ 10/02/2002
xi
http://www.1.slb.com/smartcards/news/00/sct_vodophone1502.html 12/02/2002
xii
http://www.zdnet.com/zdnn/intweek/ 1/10/2001
xiii
http://www.emarketer.com 18/01/2002