Messaging-based Applications

In messaging-based applications the communication between the bank and the customer is carried out via text messages. These messages may be trig-gered automatically by the bank whenever certain predefined events occur, for instance whenever a transaction is performed on the account. Alterna-tively, the messages may be sent by the bank as a response/confirmation to customer requests. A customer message may contain either an instruction, e.g. to carry out a transaction, or an information request, e.g. for the ac-count status [Dilg et al., 2004, p. 18].

7.2.1 SMS Banking

The term “SMS Banking” refers to the provision and availment of banking- and financial services via means of text messaging service, known as SMS.

SMS Banking services are availed via text messages that are carried by SMS. The customer sends a customised SMS to the bank with predefined commands for each offered service. The server of the banks receives the SMS, decodes the commands and executes the instructions, if the request is found to be authorised.

The authentication is carried out with the help of a special Mobile Bank-ing Personal Identification Number (MPIN). Furthermore, the requests are only accepted from a mobile phone number that has been especially regis-tered as authorised number for operating that particular bank account. This service uses “account keys” instead of account numbers so that the number does not need to be typed in and remains confidential [Citibank Philippines, 2005, p. 1].

SMS services are offered on both pull- and push basis, as discussed above.

7.2.2 MMS Banking

The term “MMS Banking” refers to banking services via Multimedia Mes-saging Service (MMS). This system works in analogy to SMS Banking.

The only difference lies in the extended scope and enhanced quality of push services for Mobile Financial Information, particularly for stock market charts and product information and offers. There is no other significant difference.

MMS-based services are reportedly offered by just one bank worldwide, i.e. Banca Intesa of Italy [Karsch, 2004, p. 72].

The tables below give an overview of services that are being currently offered in Germany and other countries by using messaging-based (SMS) applications. A hyphen (“-“) opposite a service signifies that none of the examined banks was offering that service at the time of this research.

Mobile Accounting services offered via messaging-based applications include:

Banks Mobile Accounting

Germany International Account Operation

Money remittances & funds transfers - Bank of Punjab, ICBC, ICICI, Citibank (Philippines) Standing orders for bill payments - Bank of Punjab, Citibank

(Philippines), HDFC, ICBC, ICICI IDBI Money transfer to sub-accounts - Bank of Punjab, ICICI

Subscribing insurance policies - -

Account Administration

Access administration - Bank of Punjab, Citibank (Philippines), HDFC Changing operative accounts - Bank of Punjab, Citibank

(Philippines), HDFC, ICICI Blocking lost cards - Citibank (Philippines) Cheque book requests - Bank of Punjab, Citibank

(Philippines), HDFC, IDBI Table 13: Messaging-based Mobile Accounting services

Mobile Accounting via SMS seems to be popular in Asia, as all the banks offering Account Operation via SMS are located in Asia. Account Admini-stration is offered additionally also in USA (Citibank) and UK (First Direct).

Interestingly enough, none of the examined banks was offering services in the area of Mobile Brokerage, as can be seen in the table below:

Banks Mobile Brokerage

Germany International Account Operation

Selling & purchasing financial

instru-ments - -

Account Administration

Access administration - -

Order book administration - -

Table 14: Messaging-based brokerage services

This lack of brokerage offers via SMS is particularly surprising since many foreign banks are offering Mobile Accounting services via SMS. Further, this study did not come across any reports of technical or other problems experienced by banks utilising this medium.

One possible reason could be the inconvenience in keying-in the re-quired data for sell or purchase of financial instruments, e.g. the stock name, number, price limits and stock exchange centre. Mobile Financial Information services offered via messaging-based applications include:

Banks Mobile Financial Information

Germany International Account Information

Balance inquiries (eventually including

securities account) Citibank, Netbank, Sparda

Bank Citibank (Philippines), Nordea, HDFC (India), Bank of Punjab (India), IDBI

(India), ICICI (India), ICBC List of latest transactions HASPA, Netbank, Norisbank,

Sparda Bank Citibank (Philippines), Citibank (USA), Nordea,

HDFC, Bank of Punjab, IDBI, ICICI, First Direct,

ICBC Statement requests - Citibank (Philippines),

HDFC, Bank of Punjab, IDBI

Transaction & balance thresholds - Citibank (USA), First Direct, ICICI

Threshold alert - UBS, ICICI

Returned cheques & cheque status - HDFC, ICICI, IDBI Credit card information Citibank ICICI

Branches and ATM locations - -

Helpline and emergency contact Citibank (Philippines), HDFC

Information on the completion status Citibank, HASPA, Norisbank Citibank (USA), ICICI Market Information

Foreign exchange rates - UBS, Bank of Punjab Market and bank-specific interest rates Citibank Bank of Punjab

Commodity prices - -

Stock market quotes and reports - ICICI, UBS Product information & offers Citibank, HASPA ICICI

Table 15: Messaging-based Mobile Financial Information services

The broad range of information services offered via SMS in Germany as well as other nations point to the particular usefulness of this medium, which is price-worthy, easy-to-use and widely known. This raises some questions on its suitability.

Research Issue 7: Suitability of SMS for transaction services

Answers to these questions can be found in section 9.2.4 in the responses of the banks to a specific question about the failure of SMS Banking in Ger-many.