Mobile Banking refers to the use of mobile devices by customers to remotely interact with the banking systems. Adding Mobile Banking to the list of services offered by Microfinance Institutions puts a great deal of banking power in the hands of the customers, hence allowing them to access their account and transact, anytime-anywhere. The ability to check balance, pay for products & services, transfer money to another account are just some of the few things that can be made possible with mobile banking, however depending on the nature of the customers, the microfinance institution is able to further stretch the limits of what can be done through mobile banking.
While conventional banking methods would require physical presence at the Microfinance banking hall for most transactions required by the customers, Mobile Banking is taking advantage of wireless technologies to disrupt the banking sector. The technologies used to make Mobile Banking possible may differ across different devices and are also related to the applications developed for use by the Microfinance customers. The ADBanking System is able to accept connections from various applications and respond accordingly to the requests. Some of the ADFinance Clients that are already using the ADBanking System utilize Unstructured Supplementary Service Data (USSD) technology, which is a Global System for Mobile (GSM) communication technology that is used to send text between a mobile device and the application program in the Microfinance banking servers; this may be hosted physically at the address of the Microfinance or may be hosted in the Cloud.
The customer dials the USSD code that was licensed to the respective Microfinance Institution, after which the banking system will respond with a menu showing possible options of what services can be offered. For security reasons authentication is required by providing a PIN code before being able to access account information; this not only guarantees that the right information is given to the right customer, but also gives the confidence the customers needs to know that their account is private and is not accessible by other customers. Furthermore, USSD transactions occur during the session only hence providing an additional layer of security within the working of the technology itself. Customers however should remain aware that identity theft remains a threat and thus the PIN codes must be kept secure, not disclosed to others or written in the phone, and should be changed from time to time. Personal monitoring of accounts should be done, and proper action must be taken in the event that the mobile device gets lost or stolen.
Mobile Banking has many advantages that may differ depending on the party being referenced; for the customers, a secure way to remotely access accounts, convenience in the method of banking, flexibility for various operations and affordability may be some of the contributing factors that determine the demand for the Mobile Banking Services. On the other hand however; for the microfinance institutions, Mobile Banking is an opportunity for them attract more customers with the new technologies, improve service delivery as well as offer banking services to their customers anytime-anywhere. The limits of Mobile Banking are yet to be determined, as the emergence of new technology continues to stretch these limits and give power to Microfinance customers to transact remotely. Smart devices also further improve user experience and take advantage of the internet to deliver more robust services to the customers’ mobile devices.