The news this past week has been all about a Citibank mobile banking glitch. Apparently a flaw in a version of its iPhone m-banking application resulted in it improperly storing customer account information.
Now this is something that could happen to anyone, you will say. But should it?
The past year has seen an explosion of new banking services and stand-alone banking applications designed for the mobile phone. The advent of the smartphone has ensured that developers are having a field day in the production of new apps, many of them geared
to the financial market.
Many bank's new mobile apps cover services already pioneered by other early innovator banks who have introduced smartphone banking services - like the ability to view account balances, pay bills, transfer funds, get market and even conduct insurance business.
Many of the new entrant banks are also hoping to leapfrog the competition with plans to offer not only mobile banking capabilities but also a range of other ancillary services via the smartphone platform. The Apple Store boasts that over 200,000 apps are
available for the iPhone. No doubt many hundreds, if not thousands are suitable for financial and banking transactions. It has even been suggested that banks should do a search of these apps as the starting point for its mobile banking service development.
With this huge explosion of mobile banking services must come the question - have banks back office accounting systems, procedures and security really been revamped correctly to match this new banking instrument?
My guess is that the answer is "no". I think that Citibank's problem is just the start of many others, that other banks are going to face in the coming months.
From experience I know that banks integration of new technology based products and services into the rest of the bank's operations is notoriously sloppy, especially if there is pressure to introduce a new service to either bring a "first" to the market or just
to keep up with the competition.
In producing tangible products like washing machines or motorcars or the like, product manufacturers subject their creations to rigorous testing to ensure its durability and safety, just to mention two issues.
Do banks ever really do the same?
Blog updated: 21 May 2015 06:26:11