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Banking on a mobile future

South Africa and indeed the rest of Africa are similar to many other Third World countries suffering from limited and expensive data networks – they are incredibly reliant on mobile phone access.

South Africa experienced a massive mobile user expansion after the introduction of the mobile networks and growth was almost unprecedented. However, this penetration, growth and adoption would have been much lower had South Africa had the intensity of Internet access and infrastructure, as is evident in the USA.

This fertile local environment therefore facilitated the building of extensive, reliable mobile networks, thereby providing access to millions of users who require relatively cheap hardware to access this digital infrastructure. A perfect situation for South African business, and one that has been duplicated successfully in many other Third World countries that have similar conditions and constraints to South Africa.

The backdrop on banking

With over 47 million people and an estimated 14% of these living in informal dwellings, South Africa has a massive population with limited access to banking and financial services. This presents not only the biggest challenge but also the biggest opportunity for South African business.

Banks adopting a mobile enterprise solution can offer tailored communication from the bank straight to the client's mobile phone. The client is then able to purchase value added services, browse additional bank services and make direct contact with the help centre. The opportunities for banks and their clients are virtually endless.

There are substantial security risks that can be overcome for the banking client if they can move to electronic payments instead of cash ones. And consider the tremendous convenience it allows someone in a rural or underdeveloped area - they can simply pay their bills from their couch, while watching television.

The bottom line is that the services offered by an enterprise can be vastly improved, from your everyday client to your high net worth client.

Security

In order for banks to fully embrace mobile technology, they require a secure mobile enterprise transaction platform. Such a platform needs to allow for commercial transactions, offering security with the same set of security algorithms that are present for traditional Internet banking. All secure data needs to be encrypted from the device to the application servers, thereby offering end-to-end security.

There is no doubt that the security offered by such a solution is more secure than traditional banking. The mobile device environment generally offers far greater protection to the secure application from manipulation of malicious threats than what is offered to a web browser by a desktop OS (operating system).

Historic limitations to mobile commerce

The largest impediment to mobile commerce has clearly been the lack of usability for the end user.

The biggest potential mobile market in a Third World country is the market with relatively low technical knowledge. They are fairly unconcerned with issues like security, even though this is a vital issue for any enterprise, and are far more focused on the ease of obtaining the product, accessing its services and being able to do so with little or no stress or inconvenience.

This previously obstructive stumbling block can be attributed to both a technology constraint and the fact that most other attempts to produce a solution were developed around a technology and not around the end user. One only has to look at the legacy technologies such as WAP, SIM, SMS and USSD to realise that they all have overwhelming limitations. And it is these limitations that resulted in repeated rejection from the market. It is all good and well to develop a product in a lab, but the product becomes redundant if you cannot get your market to use it.

Opportunities

The vast opportunities that exist for South African companies who extend their existing services into a mobile channel are immense. By doing so they will in effect gain access to a massive, relatively untapped market (virtually in their homes) with a fully secured solution. This is not just a local opportunity either; companies and banks adopting the required solution will achieve the most convenient, international reach imaginable.

Mobile technology takes enterprises such as banks that much closer to their customers. Within the very short-term, having a usable, feasible mobile enterprise offering will be a distinguishing factor for banks; one that will determine whether they obtain or lose a customer.

Arno du Toit is a director at Virtual Mobile Technology (VMT), supported by Mvelaphanda Holdings.

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