executive vice president, SunGard’s wealth management business

Technology innovations in mobile banking

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Global mobile banking subscribers have doubled in each of the past three years, with strong growth predicted as far out as 2015.  The rapid rise in mobile banking is fueled by two primary drivers.  Mobile is the only channel available today that provides immediate banking services, and usage of the mobile phone is high across all demographic and socioeconomic levels.  Mobile technology is driving both advanced services for sophisticated users and access to banking services for a large population without current access to banks or desktop applications.

To service the ever evolving applications designed for the mobile banking market, the underlying technology is changing just as quickly.  SMS / text messaging, mobile browsers and mobile applications are the lynch pins behind the mobile capabilities.  Apple’s iPhone takes advantage of all three capabilities to provide a full range of innovative banking services.  This year Apple has announced new software available for the iPhone, iTouch and iPad that offers more than 100 new user features, management of 2160 apps up from 180, and 1500 new APIs for developers to access in creating new applications.

Near field communication (NFC) also known as proximity payments have shown enormous potential in the mobile banking sector to replace traditional bank and credit cards.  This technology permits customers to purchase goods in-store by waving an NFC enabled handset in front of a contactless reader and entering a password.  The total transaction takes a mere fraction of the time required for the typical cash or credit card transaction.   NFC is also being used to transfer money between phones, and swap information just by tapping the respective handsets together.

Today approximately 1,000 US banks already offer mobile banking services out of 30,000 financial institutions(1).  While the US market is trailing its Asian and European counterparts, core adoption is increasing as regional and smaller banks follow the lead of the large banks.

Has the availability of low cost technology encouraged mobile usage within the markets and the customers you serve?  How do you view mobile banking as a distribution channel for your services?

1. Charles Landry, “Year of Mobile Banking and Payment,” Reuters (2010).

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