FOR Marketing Perspective - Mobile Banking -- May 4

FOR Marketing Perspective - Mobile Banking -- May 4

M-banking to go beyond balance check

Rudijanto
Contributor
Jakarta

Using a credit card when you are shopping is very common
today, but what if the transaction was conducted by merely
clicking some buttons on your cellular phone, showing the phone's
screen to the cashier who immediately approved the transaction
upon seeing the screen?

That idea still sounds far off, particularly for banking or IT
laypeople, but Bank Danamon cash management consumer head Edy
Tuhirman entertains the idea when asked about possible future
features of mobile banking.

Whether such an idea will be applicable or not in the near
future, at the least it shows the power of newly adopted banking
services called mobile banking. With this powerful banking
system, customers can break the barriers of time and space.

Mobile banking is certainly still a new service by major banks
operating in Indonesia. Banks such as Bank Danamon and Citibank
just began offering mobile banking last year. Other banks are
still preparing to launch their mobile banking services.

Citibank's mobile banking still does not offer transaction
services due to the highly risky nature of mobile banking.
Started in July last year, the bank's mobile banking only
provides three features, namely payment of cellular vouchers,
SMS credit card inquiries about one's balance and an alert
service to warn customers about certain transactions.

"We have not provided transaction services via our mobile
banking because we want the transactions to be really secure. We
are working on it and, hopefully, within this year we can provide
such services," Citibank's vice president of e-Business, Rico
Usthavia Frans, said.

Rico believes the current mobile banking system using ordinary
SMS is not secure enough for banking transactions. The reason is
that data passed through normal SMS is not encrypted. That is why
Citibank is preparing another system.

"We will use the SIM Tool Kit (STK), which is a menu-based
system. With such a menu-based system, customers can easily
remember rather than input data by themselves. One more thing,
this menu-based mobile banking is secure," Rico said.

The bank expects to be able to provide transaction features
using STIK by the end of this year.

Just like Citibank, the only major transaction available
through mobile banking at Bank Danamon is that of cellular
vouchers. Other features of the bank's mobile banking are account
balance inquiries and fund transfers to other Bank Danamon
accounts.

Customer response to mobile banking is growing gradually
though not drastically. This gradual growth is understandable
since people need time to learn and accept any new facilities.
The ATM took years before gaining wide public acceptance.

But seeing the growth in the number of cellular phone users,
banks simply cannot avoid the potential of this particular
sector. Data from the Indonesia Cellular Telecommunications
Association reveals that the number of cellular phone users
reached 18.5 million in 2003. The association predicts this
number could increase to 25 million or 27 million within this
year.

Such rapid growth is very promising. That is why in an
interview early this year, the consumer banking general manager
at Bank Central Asia, Stephen Liestyo, said the bank expected its
mobile banking M-BCA to grow by 50 percent this year.

BCA was among the first banks in the country to provide mobile
banking services. Starting with only 304,719 users in 2001, the
bank's mobile banking users leapt to more than 2.2 million in
2002. By the end of last year, that number had increased
significantly to 3.6 million.

The bank's mobile banking features already exceed that of
account balance checks and payment of cellular phone vouchers.
For instance, with ProXl, as one of the bank's cellular operator
partners, BCA offers M-Commerce, which enables customers to buy
stocks.

The bank's M-Payment also enables customers to make many other
kinds of payments such as credit card, home phone and insurance.
These varied features have played an important role in bringing
m-BCA monthly's transaction value to Rp 272.58 million last year.

The promise of mobile banking is too attractive for Bank
Rakyat Indonesia (BRI). In preparation for Internet and mobile
banking services, the bank is not hesitant about investing in new
equipment to support the introduction of online and mobile
banking facilities. Last month the bank announced the purchase of
4,670 PCs using Pentium 4 with hyper-threading technology.

BRI's general manager for information system technology,
Mohammad Irfan, said the new equipment would support, among other
things, the introduction and operation of the bank's online and
mobile banking.

"We will launch our mobile banking within the year. As of
right now, we are still preparing it with one telecommunications
operator. Our mobile banking will offer services such as balance
checks, electronic fund transfers to other BRI branches, bill
payment and cellular voucher purchases, airline ticket purchases
and also notification services, for instance on the maturity of
credit," said Abing Rabini, BRI's deputy to the general manager
for information system technology.

"I believe that mobile banking will grow faster than Internet
banking because Internet banking is more expensive. People have
to own PCs and have to pay ISP to be able to access the Internet,
while for mobile banking all they need is a cellular phone,"
Rabini said.