7.2 Mobile Applications in Financial Services

Mobile financial applications include banking, wireless payments and micropayments, wireless wallets, bill payment services, brokerage services, and money transfers. While many of these services are simply a subset of their wireline counterparts, they have the potential to turn a mobile device into a business tool, replacing bank branches, ATMs, and credit cards by letting a user conduct financial transactions with a mobile device any time and from anywhere. For example, in Japan cell phones have a built-in smart card that is used for micropayments. In this section we will look at some of the most popular mobile applications in banking and in financial services.

MOBILE BANKING AND STOCK TRADING
Mobile banking is generally defined as carrying out banking transactions and other related activities via mobile devices. The services offered include bill payments and money transfers, access administration and check book requests, balance inquiries and statements of account, interest and exchange rate, and so on, and the sale/purchase of stocks.
Throughout Europe, the United States, and Asia, an increasing percentage of banks offer mobile access to financial and account information. For instance, Merita Bank in Sweden pioneered many services, and Citibank and Wachovia in the United States has a diversified mobile banking services. Consumers in such banks can use their mobile handsets to access account balances, pay bills, and transfer funds using SMS. The Royal Bank of Scotland, for example, uses a mobile payment service, and Banamex, one of Mexico’s largest banks, is a strong provider of wireless services to customers. Many banks in Japan allow for all banking transactions to be done via cell phone. For a demo, go to Wachovia.com, find mobile banking, and click on “go mobile today.”
According to CIO Insight (2007), Wells Fargo provides an increasing number of banking services to wireless customers. The major objective is to increase customer loyalty. Basic wireless services are being offered by most major banks worldwide. Among services are mobile alerts (e.g.,when your balance is low). Also, mobile browsing, downloading, and text messaging are becoming popular.
As the wireless technology and transmission speeds improve, the rate of mobile financial service increases. The same picture holds true for other mobile financial applications such as mobile brokering, insurance, and stock market trades.