Wireless networks are a key enabling technology for the modern information age. The proliferation of Wi-Fi hotspots, cellular data networks, and generally ubiquitous and pervasive networks, combined with mobile devices that support the global positioning system and the varied wireless standards, has led to an access anywhere paradigm that transforms the delivery of services. One of the transformative, emerging uses of wireless technologies is the mobile banking application. Mobile banking applications that utilize wireless networks provide a secure and convenient means for customers to access financial services. The Bank of America Mobile Banking application is a real world implementation of the secure and convenient financial services described.
Typically, wireless network based customer service interactions are considered less secure than the wired or face-to-face analogues. However, as Herzberg describes in his 2003 article, “Payments and Banking with Mobile Personal Devices,” the security of wireless devices adds capabilities that do not exist with traditional banking systems. (Herzberg, 2003) According to Herzberg, with traditional systems, “assigning responsibility for damages resulting from fraud and disputes is therefore done through administrative and legal means rather than through technical means.” (Herzberg, 2003) As Herzberg describes, mobile banking applications provide a technical solution to these issues,
Mobile personal devices, usually with a built-in display and keyboard, are well positioned to provide a technical solution for reducing fraud and allowing the fair allocation of responsibility for damages from fraud. Some amount of security is already part of the authentication mechanism of existing cell phones as a way to prevent call theft. (Herzberg, 2003)
Utilizing the mobile device as an authenticator is a capability provided by Bank of America’s Mobile Banking application. The use of the mobile device as a secure payment platform is further described by Mallat, “the [mobile device payment] service is especially valuable for small- and medium-sized enterprises, for example taxi companies, which do not want to keep company credit cards in cars for security reasons.” (Mallat, Rossi, & Tuunainen, 2004) According to David Eads, “Bank of America also uses mobile to provide additional security in other channels. Specifically, Brown mentioned that all high-value transfers in other channels like online banking require confirmation from their SafePass product on the mobile phone.” (Eads, 2009)
Next to security, convenience is the second reason most financial institutions pursue mobile banking applications for their customers. (Herzberg, 2003) As Herzberg describes, “Convenience can result from using their communication capabilities when paying for goods and services, whether on foot or in cars, planes, or trains, and authorizing transactions at remote servers of banks, brokerages, and merchants.” (Herzberg, 2003) While customers perceive the mobile banking application as a significant convenience over a visit to a brick-and-mortar location or a long wait on the phone, the bank also receives a financial benefit. David Eads reports on a Verisign reporton mobile commerce,
Verisign also provided cost figures for various channels based on a study commissioned by MCOM. Banks can find significant savings by serving customers in the mobile channel ($0.08) rather than through the contact center ($3.75), IVR banking ($1.25), ATM ($0.85) or even online banking ($0.17).” (Eads, 2009)
The data reported by Eads are per transaction costs associated with checking account balances. Another example of convenience, similar to Eads’ example, with mobile banking applications is leveraging global positioning system coordinates and online databases of bank and money machine locations enable customers to provide self-service. Most customers prefer looking up these kinds of information up via self-service to automated attendants. The Bank of America Mobile Banking application provides these types of self-service features.
As Herzberg states in the conclusion of his article, “mobile personal devices are beginning to be used to per- form secure banking, payment, and other transactions. Cell phones, PDAs, and other mobile personal devices are a convenient means for authorizing transactions.” (Herzberg, 2003) The security and convenience of mobile banking applications translates to an improved customer experience and significant cost savings for the bank. The Bank of America Mobile Banking application serves as a useful case study for wireless financial services.
Eads, D. (2009). Mobile Banking ROI Tips from Bank of America. Mobile Manifesto Retrieved 2/21/2010, 2010, from http://blog.mobilestrategypartners.com/2009/10/22/mobile-banking-roi-tips-from-bank-of-america/
Herzberg, A. (2003). Payments and banking with mobile personal devices. Commun. ACM, 46(5), 53-58.
Mallat, N., Rossi, M., & Tuunainen, V. K. (2004). Mobile banking services. Commun. ACM, 47(5), 42-46.