Mobile Banking refers to the provision of banking and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information. Also known as M-Banking in Nigeria or in some instances SMS Banking etc. It is a term used for performing balance checks, account transactions, payments and other transaction services via a mobile device. Some mobile banking applications in Nigeria use pre-programmed configuration settings.
Mobile Banking in Nigeria started from the transaction based activities whereby Bank customers are Notified via sms when transactions are conducted on their account or via Atm. This is a one way event and only for informational purposes only. GT Bank was one of the earliest banks to provide this service to customers.
That was the early days of Mobile Banking in Nigeria. Nigerian Banks are now deploying full fledge banking via Mobile Phones with an array of services which were only possible in the Banking Halls before. Zenith Bank, UBA, GTBank, Diamond and Intercontinental Banks are the front runners of this innovation.
Despite the watch and see attitude that some very leading Banks are taking about Mobile Banking in Nigeria, The mobile remains the only and most available feasible means to provide a mass market alternative to Branch Banking in Nigeria. The internet has only a penetration rate of 6 percent in a population of 140 million, but mobile technology is close to 50 percent penetration with prospects for growth.
Mobile devices are the most promising way to reach the masses and to create a tie-in among current customers, due to their ability to provide services anytime, anywhere, high rate of penetration and potential to grow. Deployment of 3G in coming months will also enable Banks to offer more robust Mobile Banking technologies.
Key challenges in developing a sophisticated mobile banking application are Interoperability. The single reason for is the manner in which mobile phone applications evolved over time, device manufacturers focused on particular standards and this led to a proliferation of applications. The Financial Regulator CBN should look into this issue at this early stage so that the Mobile Banking ecosystem can be robust with National standards that cuts across all Banks. Bank specific Mobile Banking platforms are akin to having each bank deploying its own ATM Technology which other bank customers cannot access.
Interoperability can also help to evolve a standard that will enable low end phones which are currently excluded, to do Mobile Banking. Some countries like India and South Africa are already using some standards like R-World and USSD.
Application distribution for Mobile Banking is another area where some Banks are facing Challenges. While some forward looking Banks are overhauling their gateways and reducing their reliance on Mobile Operators settings to enable customer’s phones, Some Banks are actually asking that Customers come with regular Operator settings which in many instances might not be correct configurations settings..
Operator settings are not really meant for critical operations since most of the settings are used for entertainment based activities. Nigerian Banks that are looking at competing in this sector must look beyond operators settings which may not be correct, delayed in arrival, may not come at all and not regularly updated. Some Mobile operators do update like every three months while some do not at all. For wap and Gprs based Mobile Banking applications, mobile network coverage will also be an issue.
As part of their marketing strategies, I will expect that by now, customers do not need to visit local branches to download banking applications. Over-the-Air (OTA) Settings should be readily available online and some innovations can even come to play by Banks deploying Bluetooth application machines in Shopping malls and some strategic places where customers can visit and download Mobile Banking applications for free or for a fee ..This will increase the addressable market of the Banks offering Mobile Banking exponentially in Nigeria.