BANKING & PAYMENT TECHNOLOGIES EAST AFRICA, 2009: Risk-Averse Technology Solutions to Mobile Banking and Financial Services

According to the World Bank facts and figures, more than 50% population in Sub-Saharan Africa is within the range of mobile communications and this includes 80-90% in Kenya, Uganda and Malawi. Innovative technological approaches tied to this phenomenal growth of mobile communication network infrastructure in Sub-Saharan Africa offers significant potential to next generation banking and financial services business opportunities with a deep outreach. However, the risks inherent with these innovative approaches restrict banks and financial services organizations from taking advantage of opportunities from this extraordinary growth in mobile communications infrastructure to its fullest extent.

Although there has been several successful and popular pilot efforts in mobile financial services such as Mobile Money Transfer, Branchless Banking and m-Commerce, recent shocking revelations of security breaches and vulnerabilities with mobile communications is not encouraging enough to provide a complete assurance to protect end customers cash. For instance, technology experts have recently detected a new malicious program that infected customers of an Indonesia’s Telecom Operator. This SMS-based malicious program targeted SMS Credit Transfer Service with instructions to transfer part of the money in the customer’s account to the perpetrator’s account. This is augmented by the fact that nowadays even non-technical criminals have free access to Spyware programs available on the Internet. An investigation by a leading international news agency reveals that, it does not require a technical geek to run a spyware that can read text messages and track movements of a mobile phone user “anywhere, anytime.” Recent findings at the Cyberforensic Lab of the Purdue University clearly demonstrate that Mobile Phone Tapping programs works with a variety of old and new mobile phone devices operating in the market today.  

According to the GSM Association, global mobile subscription has surpassed 3 billion when compared to about 1 billion bank accounts. Informa Telecom forecasts the world-wide mobile subscriptions to surpass 5.3 billion by 2013 with annual revenue from global mobile market in excess of $1 trillion. According to a Mobile Banking report from the Price Water Coopers, transaction volume of mobile financial services from the UK market alone is expected to reach £6 billion in 2012. Also, in light of the global financial crisis, banks and financial institutions world-wide are examining several opportunities for cutting the operational costs of brick-and-mortar branches and tapping new revenue opportunities from the large unbanked population. Branchless Banking with innovative technology approaches that utilize the mobile communication infrastructure offer substantial opportunities for realizing operational cost savings and targeting untapped revenue from the unbanked population.

These lucrative market opportunities to banking and financial services when combined with protective techniques necessary to shield customers and business enterprises from rising threats and security risks discussed above, there is clearly a need for interoperable risk-averse technology solution. Risk-averse, secure and interoperable mobile financial transaction security approaches, that can protect organization and end customers from the future unknown malicious acts of perpetrators, will pave the way for business enterprises to take the fullest advantage of ubiquitous mobile communication infrastructure while moving towards the next generation banking and financial services. During this keynote presentation, operational, fraud and security risks of Mobile Money Transfer, Branchless Banking, Microfinance and Mobile Bill Payment solutions will be discussed. SBA Technologies patent-pending innovative approach to risk-averse mobile banking and financial services that take into account security, identity proof, fraud monitoring and prevention will be presented.