What is Mobile Banking?

Mobile banking refers to the channel model where banks use smartphones as carriers to enable customers to use banking services on this terminal. With the advancement of communication and Internet technology, the business functions of mobile banking are constantly updated and improved ^[1] . Refers to the use of mobile phones and other mobile devices to achieve customer docking with banks, provide customers with related banking services or provide financial services. Mobile banking is both a product and a channel, and belongs to the category of electronic banking ^[2] .

mobile bank

Mobile banking, also known as mobile banking, refers to the use of mobile phones, PADs, and other mobile devices to connect customers with banks, handle related banking services or provide financial services for customers. Mobile banking is both a product and a channel, and belongs to the category of electronic banking ^[2]

Mobile banking consists of mobile phones,

(1) Account management

Provide customers with account management functions such as balance inquiry, same-day details inquiry, historical details inquiry, registration card maintenance, account loss, default account settings, etc. ^[5]

Mobile banking was born in the Czech Republic in the late 1990s. It was jointly created by the country s bank Expandia Bank and mobile communications operator Radiomobilc. Its mobile phone model is dominated by traditional banks. Most of the initial mobile banking was dominated by traditional banks. Mobile operators only provided operating platforms, the most typical of which was China. With the development of social economy and the advancement of information and communication technology, mobile banking gradually emerged by mobile operators, the most typical of which are African countries, such as Kenya M-Pesa. M-Pesa has become the most accepted mobile payment system in the world. In Kenya, M-Pesa's remittance business has exceeded the sum of all its domestic financial institutions. This emerging mobile banking model emerging in African countries has largely benefited from the desire of African people for basic financial services. The underdeveloped financial systems of African countries make it difficult to meet people's basic financial services, which has led to the birth of this mobile banking model. The mobile banking model dominated by mobile operators has overturned traditional banks and will emerge as a new financial model in the forest of the world. At the same time, mobile banking led by third-party payment companies, such as CelPay in Zambia, also appeared. This model, like the second model, is also dominated by non-traditional banks, and it will have a profound impact on the development of the financial industry. With the development of information and communication technology, the boundaries of mobile banking dominated by different institutions will become increasingly blurred, and the boundaries of different financial services will become increasingly blurred. ^[6]

Each bank's mobile banking will undergo rigorous security tests. The system is equipped with multiple firewalls. When necessary, it will also update the system and clients. The password of the customer's mobile banking is also set with multiple key encryption during transmission to fully ensure security. Double protection through mobile banking login password and account transaction payment password, even if the mobile phone is lost, it will not cause capital loss. Even so, because the use of mobile banking involves multiple aspects and multiple links, the safety of mobile banking use cannot be taken lightly. Financial consumers should develop the following good habits when using mobile banking ^[7]

(I) Risk analysis

First, technical risks. Including risks such as identity authentication, smart phone client management, and network transmission environment security. In terms of identity authentication, mobile banking generally adopts SMS authentication, reservation code verification, and reservation information verification. There is a risk that passwords will be cracked or stolen due to weak customer security awareness and frequent interpersonal interactions. Smartphone customers /, In terms of terminal management, when users download new mobile phone software, customers are not required to conduct a comprehensive test on the security of the newly installed software because it involves customer privacy. This has caused security risks to mobile banking to a certain extent, and the network transmission environment is safe. The problem is that stealing customer information through phishing WiFi sites, communication interception, etc., also exists in mobile banking. The stability and reliability of the operator's network link has become an important consideration that affects the safety of customer funds and the reputation of the operator ^[8]

SMS mode

The MS (short message service) mode uses mobile phone short messages for banking services. Customers can easily access them. Mobile phones generally support short messages, and most people use short messages. The active on-demand mode of short messages can also be used to implement bank transactions. However, the security level of this method is very low, leaving traces in the mobile phone and the network operator's server ^[9]

The rapid rise of mobile banking has not only increased exponentially in number, but also has increasingly enriched service content and improved functions, and has continued to evolve with the development of the ICT and financial industries. Regarding mobile banking, most scholars define it from the perspective of financial functions. In fact, mobile banking is access to various financial services through ICT. Of course, financial services here also include payments ^[10]

In order to adapt to the rapid development of mobile payment, banks should determine their mobile payment strategy as soon as possible. In the next 3 to 5 years, commercial banks' position in the mobile payment industry is to provide mobile payment account providers. The medium and long-term strategy is to open payment channels, accumulate merchant resources, gather partners, and provide users with the ultimate experience ^[11] .

Mobile payment account provider . Accounts are the natural link between the bank and individual users, and the basis of all payment services. Mobile payment is an inevitable choice to consolidate the account foundation. To consolidate the account foundation, banks must devote their efforts to embrace mobile payment, provide customers with mobile payment products and experiences, operate customers, move customers, unite customers, and improve customer loyalty. The account base is a necessary condition for mobile payment. To embrace mobile payment, banks must expand the account size, consolidate the account base, develop inclusive finance, and create value for customers ^[11] .

Open payment channels . At present, banks provide account binding, transaction channels, and clearing and settlement services for mobile payment institutions, and have account and channel and settlement advantages in the mobile payment industry chain. Different models of mobile payment are affected by the security, convenience and stability of bank payment channels, and the product experience is also subject to bank payment interface standards. Banks 'restrictions on the amount, quantity and industry classification of payment institutions affect the payment institution's business realization and business continuity at any time, while the banks' applications are not restricted. Banks open payment channels and gather resources from various parties, which is conducive to the formation of an ecological system. Banks promote the channelization of payment institutions, which is conducive to weakening the intention of payment institutions to establish another account system, thereby consolidating the position of bank account control and enhancing the ability of channel control; China UnionPay Channel or cooperating with other payment institutions that have an account payment platform to share channels of other banks is conducive to improving the bank's own mobile payment application functions and providing inter-bank payment services for customers of the Bank ^[11] .

Accumulate merchant resources . Mobile payment requires rich acceptance scenarios, and merchant resources are the basis of mobile acquiring business. It is necessary for banks to adopt independent operations, cooperative operations and mergers and acquisitions to provide mobile payment solutions for merchants and different industries. In terms of large and medium-sized merchants and industry applications, banks should take the lead in supporting independent mobile acquirers or acquirer service agencies with merchant resources in specific industries, encourage acquirers to unify merchant acquisition interfaces, and provide mobile for WeChat, Alipay, and banks Acquiring services to prevent monopoly acceptance of the market by specific institutions. Since most high-end merchants are in the hands of first-line acquirers such as UnionPay Commerce and Tonglian Payment, banks must allocate resources and encourage acquirers to open merchant resources to bank mobile payment applications. For small and micro customers, due to the controllable variable costs, banks need to combine their own business positioning to launch fixed-rate or even free mobile acquiring services ^[11] .

Gather partners . The competition in the mobile payment market is essentially the competition in the mobile payment industry chain; the cooperation of all parties in the market is also the integration of the business ecosystem. As the payment business incubation period is more than 3 years, in the early stages of business expansion, commercial banks will inevitably have little effect if they simply start the market based on white resources. Banks can advocate the establishment of a win-win mobile payment charging model and a profit-sharing model, and gather partners in all aspects of mobile payment. Only if the charging model makes all partners profitable, the mobile payment industry chain surrounding the bank will have vitality, and it will be possible to bring long-term returns to the bank after the business scale increases.

Provide users with the ultimate experience . Only businesses that truly bring value to merchants and consumers are businesses that have the potential for continued growth; only businesses that delight and cherish customers are the ones that are truly implanted in their hearts. In terms of merchants, banks should thoroughly study the free business model of Internet companies, carry forward the comprehensive financial advantages, and take the lead to significantly reduce or even eliminate mobile payment acquiring procedures for small and micro merchants; superimpose financial products, increase merchant account income, and Merchant integrated financing costs. In terms of individual users, banks should take advantage of credit account functions and settlement channels to bring consumers more secure, more convenient, faster and more extreme financial services and mobile payment experiences ^[11] .