Mobile banking (also known as M-Banking, mbanking, SMS Banking etc.

) is a term
used for performing balance checks, account transactions, payments, credit
applications etc. via a mobile device such as a mobile phone or Personal Digital
Assistant (PDA). The earliest mobile banking services were offered via SMS. With the
introduction of the first primitive smart phones with WAP support enabling the use
of the mobile web in 1999, the first European banks started to offer mobile banking
on this platform to their customers [1].

Mobile banking has until recently (2010) most often been performed via SMS or the
Mobile Web. Apple's initial success with iPhone and the rapid growth of phones
based on Google's Android (operating system) has led to increasing use of special
client programs, called apps, downloaded to the mobile device.

Wireless Application Protocol (WAP) is an open, global standard enabling mobile

devices to connect to the internet and is compatible with the majority of bearer
networks (eg CDMA, GSM and next-generation network standards). Enabling
transactional capabilities, WAP is superseding earlier banking applications based on
SMS, the two-way messaging protocol that catered for basic information-led mobile
banking. WAP allows the use of Wireless Mark-up Language (WML), a stripped down
version of HTML, to build platform-independent wireless applications. In a typical
WAP solution, data packets from a wireless device pass along a wireless network in
WML format to WAP server/gateway. The essential data is then reconfigured and
passed to a standard HTML-capable web server. This works conversely if HTML
packets must pass through a WAP server/gateway to reach a wireless device. A WAP
solution typically comes in two parts:

* A WAP server which distributes content and applications

* A WAP gateway which controls access.

The siting of these depends upon the business model adopted by banks and
operators. Current WAP banking solutions employ a closed model whereby the WAP
server and gateway reside on the network operator’s site. In so doing, banks
relinquish control of content and access to mobile operators. Moreover the closed
model carries with it a security flaw caused by the `clear text’ at the gateway which
subverts end-to-end security. Although an open model solution with gateway/server
situation in the bank’s protected environment (secure intranet) would counter such
a threat, the closed model allows speed to market without the burden of installation
costs for banks. In addition, operators are better positioned to offer portals and thus
a more mature service while an in-house bank gateway may complicate transferal
to other WAP gateways, disrupting the internet experience for the mobile banker.

The arrival of WAP supposedly sounded the death knell for STK services, but WAP is
still evolving and, as such, has not immediately replaced STK applications. The
migration towards enhanced mobile banking functionality available on WAP will
entail a co-existence of STK and WAP. The fixed internet model confirms this
mutuality–both internet- and PC-based applications are used. Undoubtedly WAP
offers easier navigation and information update, yet STK conforms better to the
dual-slot payment model and would provide better PIN management. The Smart
Card Expert Group within the WAP Forum focuses on synergies between the two. An
example of an industry partnership which aims to capitalise on the STK/ WAP
combination is that between smartcard manufacturer ORGA and Jinny Software
announced in March 2000–ORGA provides its SIM know-how while Jinny brings its
expertise in the areas of WAP gateway design and integration (WML content).

In terms of multi-channel banking, WAP presents a problem insofar as WML code

must be written from scratch since HTML-WML conversion is very difficult (although
IBM’s WebSphere Transcoding Publisher can perform such a task). Greater
consonance between fixed and mobile internet channels, thus aiding the multi-
channel distribution mix, will result from the adoption of Extensible Mark-up
Language (XML) to provide infrastructure solutions. XML is a standard web mark-up
language that affords a high degree of flexibility in accessing and presenting data
while optimising the features and functionality of different devices. The improved
content management it enables means that it has the potential to become the
lingua franca of web-based (mobile and fixed) financial services, which will aid
seamless multi-channel delivery. Instead of WML being written from scratch, only
10% of data need be changed from HTML. In November 2000, software developer
MobileQ announced its selection by Canadian Imperial Bank of Commerce as a key
technology partner in the development of a wireless banking solution based on
XMLEdge. The capacity to convert content via XML has driven the development of
the Tamino/WAP gateway by Vodafone, D2, Nokia and Software AG which provides
a generic XML-based content management solution for any WAP handset.

Service providers, banks in particular, are likely to depend on current SIM-based

solutions due to the absence of reliable WAP security. Merita NordBanken uses a
combined solution, with a WAP-enabled phone and SIM-based service.

Use of WAP technology in Mobile Banking

WAP is yet another communication mechanism available to mobile application

developers. WAP stands for wireless application protocol and uses a tagging
language called WML (wireless markup language) to present data on WAP enable
mobile devices.

Similar to a PC requiring an internet browser installed in order to access content

online, a mobile device requires a WAP browser installed in order to access
information on WAP sites. WAP requires intermediary interconnects such as WAP
proxies and gateways to bridge communication between the carrier’s wireless
network and the WWW internet.

Some advantages of WAP are as follows:

· WAP is supported on most wireless networks including GSM, CDMA, iDEN,

DataTAC, Mobitex, TDMA, PDC, CDPD, and FLEX.

· Session oriented communication, WAP provides a lightweight session layer to

allow for conversational data exchange between the client and the server

· WAP is optimized for low bandwidth bearer networks with long latencies

· Support for transaction using wireless transaction protocol (WTP) providing

reliability to datagram services

· Support for security features such as data integrity, privacy, authentication

and denial of service protection, in addition to several encryption technologies
including transport level security, SSL, and application level security such as
EncryptText() for password protection

· WAP datagram protocol is the transport layer that provides the ability to
leverage any bearer network including SMS, USSD, and GPRS for the transporting of
data

As with many of the other communication approaches, the disadvantages of WAP

include:

· WAP browser implementation is not consistent across mobile devices

manufacturers, therefore, supporting the various browsers, transport layers, and
physical device properties such as screen size, soft key, and keypad constraints
may be challenging
· Mobile devices have memory constraint, and thus, cannot take full advantage
of WAP capabilities. For instance, some mobile devices are limited to 1.4 kb pages.

· Can be costly to end users as data and roaming charges may apply

· WAP gateway configuration on the mobile device is required in order to

activate connectivity while using roaming partner networks