According to an estimate by industry experts, mobile banking usage in India is expected to grow from 10 million active users in 2009 to over 53 million active users in 2013.
Needless to say, the mobile platform is a huge action-packed area for the banking industry.
Lokesh Singh, Director – Mobile Financial Services, Gemalto, in an exclusive interaction with SupportBiz, shared some key insights into mobile banking. Gemalto is a leading mobile banking services company.
Over the past few years, this industry is getting a lot of attention from the government, from the perspective of financial inclusion. How does Gemalto see this market development?
In March 2012, only 23% of the villages in India had physical banking facilities. Mobile money can be a solution to the costly operations of bank branches, and can play a major role in providing financial services to customers in remote areas. Recognizing the potential of mobile banking, RBI has already issued guidelines for the same.
In addition, mobile money can be adopted to enable financial inclusion in India, as it offers a mechanism for serving sectors of the economy that the formal financial system usually considers unprofitable.
The lack of infrastructure in remote or rural areas is another challenge that mobile networks and services like mobile money can help overcome.
Gemalto is all set to offer best-in-class services around these challenges.
According to you, what is the future of mobile payments in India?
Mobile payment securely bundles cards, prepaid value, bank accounts and other traditional payment instruments to create a mobile wallet. We foresee mobile being a complementary payment channel to cash, cheques, vouchers and credit and debit cards for purchases. It can also be the medium for receipts, coupons, vouchers, loyalty cards, gift cards, boarding passes and much more, in a digital form.
With the Indian government aiming to shift most transactions to electronic modes, mobile payments is a technology likely to be well-supported. In addition, India’s large population of mobile users, development of infrastructure, and increasing collaboration among banks and mobile network operators will also result in the growth of this sector.
What are the measures that banks should take to make mobile transactions safe?
Banks are required to put in place appropriate risk mitigation measures such as transaction limit, transaction velocity limit, fraud checks and anti-money laundering (AML) checks, and implement multi-factor authentication to protect their users’ identities. As adoption by consumers and businesses grows, Gemalto anticipates that banks will use secure devices such as One-Time Password or Public Key Infrastructure tokens and software for identity and access management.
On the handset side, we foresee an increasing number of MNOs utilizing SIM cards or Micro-SD cards as the secure element, to store confidential financial data. The SIM card utilizes smart card technology, making it tamper-proof, to provide banking-grade security. Trusted Execution Environment (TEE) is another solution that secures devices by creating a secure execution environment within the device’s software and hardware, preventing unauthorized users from accessing financial applications or data in the mobile device. Lastly, service providers will need to educate end-users on how to secure their mobile financial transactions, such as setting a unique PIN code to access the application or screen-locking their devices.
What is Gemalto’s plan for the Indian mobile payment market?
India is a key market for Gemalto. We have been servicing the Indian market since 1996, and have worked with major players in the Indian telecommunications industry. Gemalto’s Mobile Financial Services solutions offer options such as mobile payments, prepaid airtime purchase, bill/utility payment, remittance, and peer-to-peer transactions. Gemalto believes that this will open up new business opportunities for mobile operators and financial institutions.
In India, Gemalto has provided a Mobile ID solution to MobME Wireless Solutions. The solution uses our UpTeq PKI high-end SIM cards to enable end users to use their mobile devices for authentication to online platforms and services. It also enables legally binding digital signatures for transactions via mobile phones.