Mobile Banking Security Essay Example

pilot of the mobile money transfer system was conducted in 2005/6. Before the pilot run, the regulated commercial bank requested the central bank for a go-ahead. The central bank agreed to the pilot run after discussions with the concerned commercial bank and the central bank was then approached in August 2006 to March 2007 when it was launched. The diligence focused on the requisite legal and regulatory framework, product/customer/agent security.

However the principle concern of CBK related to the need for enabling legal and regulatory framework for mobile banking to protect the interests of consumer and ensure sustainability of the product and enabling regulatory framework. Mpesa has become one of the most popular money transfers which have taken Kenya to another level. It has been a good competitor to companies like western union and has pushed others like Posta out of the market completely. Kenyan people have embraced this new technology as they find it cheap and very convenient for them especially people who live far away from towns and have no access to banks. To call Mpesa a success would be an understatement.

It has forced other financial institutions to follow suit in mobile banking. Financial service providers across the countries are estimated to have a total of up to 2 million accounts while Mpesa has 16 million accounts, which is 8 times more than the commercial banks. This made them see the need to provide the mobile banking service. For financial service providers, the mobile phone has introduced a new channel to reach customers one that is personal, easy to use, secure, location and time independent. Bank branches are becoming increasingly expensive to operate and

establish self service solutions, such as ATMs and internet banking cannot provide competitive efficiency to satisfy the needs of the new generation of customers who want to do business when it is convenient for them.

Customers can track their accounts and credit card transactions, transfer funds between accounts, pay bills domestically and abroad, trade equities and read customer e-mail and short news from the bank with their mobile phone.As more people continue to engage in mobile banking they should question these modern conveniences. One of the conveniences that currently has consumers questioning whether it is safe or not is the relatively new practice of banking from one’s cell phone or Personal Digital Assistant (PDA). Banks are now spending big money to advertise the new system which allows account holders to check balances or initiate transfers anytime and from anywhere. Although, identity theft experts aren’t yet panicked, many of them have admitted that it is only a matter of time before thieves find a way to break into this system.

Online identity theft is a huge problem that leads to numerous cases of credit fraud and bank account fraud each and every year. Cell phones should expect to encounter some of the same problems. Before you make up your own mind about the issue, you should know exactly what you should ask your bank about identity theft protection before signing up.