FOR Marketing Perspective --- Tuesday -- MAY 4

bank is now in your hand

Burhanuddin Abe Contributor Jakarta

One afternoon a garment wholesaler at the Tanah Abang market, Haji Hasan, received an order worth Rp 50 million (about US$5,875) from a trader in Makassar, South Sulawesi.

As transactions in Tanah Abang are always in cash, the Makassar businessman had to pay right then. Fortunately, both had access to mobile banking. So, within a matter of seconds the transaction was completed.

Hasan received a message from his bank that the required amount of money had been transferred to his account, and to him, that was as good as hard cash or real money that he normally receives from his customers.

Budiman, a marketing executive of a major company in Jakarta, has opted for some time now to conduct most of his financial transactions via mobile banking, such as paying his credit card, water and electricity bills, as well as sending money to his parents in Denpasar, Bali. According to him, transactions through his cellular phone are far more flexible than a visit to a bank and more convenient than using the auto-debit card. "I feel I fully control the entire transaction," he said.

Today, mobile banking provides a wide range of services, which comprise more than account balance checks, transfers or bill payment. In cooperation with cellular phone service providers, one can boost one's prepaid cellular account or that of another cell phone owner.

Some major banks also provide other financial services, such as the purchase of mutual funds, bonds and even shares on the stock market. Updating prices of shares and currency is also part of the banks' mobile banking services. Undoubtedly, for extremely busy people, mobile banking is certainly a blessing. And, with the current rapid development in information and communications technology, more innovations are in store to make their lives easier. While a few years ago picture images were considered an advanced feature, today this is a standard feature of many affordable cellular phones. Some people would go so far as to say that their banks are now "in" their cell phones. So to them, frequenting a bank, or even an Automated Teller Machine (ATM), seems antiquated.

Mobile banking is no longer a curiosity, nor is it a rarity, as customers demand this service from their banks. In order to stay competitive, banks have no choice but to incorporate mobile banking in their services. Mention any bank, from large- to medium-scale enterprises, and you will find mobile banking tops their list of services.

All the advanced features of mobile banking have been made possible by technological enhancements within the country's telecommunications service providers. One mobile service provider, PT Exelcomindo (Pro-XL), for example, offers a comprehensive facility called "Life In Hand". Apart from mobile banking, Pro-XL's subscribers have easy access to chatting, the latest information on business and trends, and even to what is going on in the celebrity world.

For their mobile banking services, banks use either the Short Message Service (SMS) or SIM tool kits. SIM, which contains among other things phone numbers, a message box and addresses, is the chip card to activate a cell phone. Like in conventional marketing, banks' marketers also incorporate the related marketing strategy, like segmentation, targeting and positioning, to serve customers effectively.

This strategy makes it easier for banks to offer the right products and services to each segment of customers. Besides a fine-tuned targeting that results in higher sales or transactions, mobile banking has turned out to be a cost- effective marketing tool in comparison to transactions at the banks' premises or even the ATMs. As both banks and their customers now enjoy low-cost and convenient mobile banking, it is not surprising that an ad line used by a bank some time ago -- "Like having a bank in your hand" -- is now a reality.

The popularity of mobile banking in many countries, including here, is phenomenal. To illustrate the surge in mobile banking, we could observe the total number of Bank Central Asia's (BCA) transactions from 2001 to 2003. In 2001, mobile banking transactions numbered 304,719. A spectacular increase in transactions caused that figure to jump to 2.2 million transactions in 2002, and its 2003 data shows 3.6 million transactions worth Rp 272.5 billion (about US $32 million). While this figure comprises only a small portion of the bank's entire transactions, one can easily imagine the mind-boggling total of all mobile transactions from every bank in the country. All this means that mobile banking has won the hearts of its extremely busy and somewhat technologically advanced customers.

With the current increase rate of 50 percent annually for cellular ownership, along with the estimated 20 million cell phone owners in the country, in the not-too-distant future mobile banking constitutes huge potential for banks.

Similar to comments made by other noted marketing experts in the country, marketing expert Rhenald Kasali said that for a company, banks included, to emerge the winner, it would have to keep up with every advancement in all fields -- information and communications technology as well.

The hallmark of a good bank is hassle-free and cost-effective service. Thus, a customer who is not provided with the best that the banking industry offers, will surely use their cell phone to dial another bank and switch allegiances.