SMS Banking – Beyond Simple Notifications

In this post I would like to focus on mobile messaging services in the banking and financial services sector. An obvious service is to get SMS notifications on your mobile phone whenever there is a transaction on your account, such as a new debit or credit. However, there are many more services that are potentially available and I have listed some below:

* Notifications for account changes and transfers
* SMS notifications for credit card transactions
* Top-up prepaid cards directly from your bank account
* Transfer money to a friend’s prepaid card
* Subscription-based (premium) financial information, e.g. stock rates, breaking news
* Interactive requests for account details or financial information
* Customer announcements and greetings, e.g. birthday greetings
* Notifications on certain portfolio thresholds
* Payments for utilities such as electricity, water, etc.
* Actual bank transfers
* Receive financial charts via MMS
* Interactive currency converters
* Mobile TAN’s , i.e. use the mobile phone for authentication
* Reconfirm credit card transactions
* Mobile payment and micro credits
* Request details of the closest ATM
* Marketing campaigns via SMS or MMS
* And many more ...

The above can all be used without the need of deploying any additional applications on the mobile phones.

While notifications seem an obvious use, other services such as actual bank transfers are more complex when offered via SMS. However, even this service is already live at a couple of banks. The key to this service is to use a two-way SMS dialogue between the bank and its customer. In this way the customer is asked to reply to SMS notifications from the bank with certain information before a request or transaction can be processed. This approach has two benefits. Firstly it is more convenient for the user and secondly it is more secure.

The number-one concern of every bank is security and whether SMS banking is truly secure? It is often said that it is much easier to listen in to a telephone conversation than it is to read SMS messages ‘over the air’. Also, for sensitive services, clever transactional methods can add further security and therefore actually make this medium compliant with the strong security policies of a bank.

SMS banking could prove popular in rural areas where it might be the only way to carry out basic banking activity without traveling into the next city. And in more modern or developed cities these services add user convenience and therefore increase customer loyalty and retention.

Source from Ronald Czachara

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