It is not surprising that technological developments in the financial sector this year have been somewhat overshadowed by the wake of the credit crunch and the continuing recession. Yet, it is fair to say that despite such developments as the historically low Bank of England Base Rate, the financial market has become very competitive when it comes to return on savings (as exemplified by the popularity of fixed rate bonds), and customer accessibility via advancements in technology.
Consequently, the latest buzz in the world of finance is no doubt mobile banking. In a logical progression from 24/7 accessibility to our money via online banking, the rise of smart phones and 3G is giving customers the option access their accounts directly from their mobile phones.
Although we have been able to control our accounts on our mobiles for at least a couple of years now, mobile banking has truly become mainstream this year. In the UK both Phones 4U and O2 have collaborated with both MasterCard and NatWest respectively to offer prepaid credit cards advertised as being risk-free in terms of debt problems. Both providers are aiming their cards at different demographics, with O2 available fee-free for existing customers and Phones 4U offering to anyone for a small charge.
O2's Ronan Dunne recently commented on the move in The Metro. "We believe that we are at the start of a journey towards the coming together of phone and wallet," he said. "And we intend, through O2 Money, to be at the forefront of this trend."
In the US, market intelligence specialists, the international Data Group (
IDC) have advised banks to invest in the technology or be left behind. A gradual uplift in the economy, as well as projected consumer and business demand means that without investment now, banks may be in need to catch up in order to ensure they keep customers. Marc DeCastro, quoted at v3.co.uk, said: "Just like online banking, the justification for offering a mobile solution will be based on customer retention and cost reduction."
As is expected, when both money and new technology begin to intertwine, questions of security are sure to be raised. As increased functionality becomes available, i.e. beyond checking our balances and instead using the mobile to transfer money, banks will also need to ensure customers that their money is safe. This is something that David Sancho at Trend Micro says has been criticized in Europe - with the industry as a whole having been accused of "tardiness."
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Paul Roberts writes about finance,
savings accounts,
fixed rate bonds and technology.
