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On the financial inclusion side, if we go strictly by Dr. Raghuraman's recommendations of creating a 'National Electronic Financial Inclusion System' (NEFIS), the backbone of such a system would be in its ability to carry out small value transactions (Rs. 100) at limited
transaction. And the only way that can be done on a mass acceptable basis is via SMS, which is the single most pervasive feature in mobile technology revolution, cutting across all SEC's, geographies, hand-set vendors, MNOs etc. The humble SMS along with dynamic authentication does indeed have pride of place in the scheme of things. Although advanced / high-end transactions can be conducted using cell phones, most mobile banking customers use it for basic activities like balance enquiry, making payments of regular bills, etc.

Most of banks are still stuck on the typical GPRS-based model or working out applications that need GRPS to operate on. Security is one issue that practically strips the banking ability out of these services. The only possible solution is the use of USSD platform, which inherently has higher levels of security as compared to other existing platforms. The Unstructured Supplementary Service Data (USSD) platform inherently has higher levels of security as compared to other existing platforms. USSD is independent of SMS, GPRS, and WAP. The real time operations ensure that the data is not stored anywhere, providing high level security. There is no risk to customer's personal information unlike SMS or GPRS, as the service doesn't store any data or session on the hand-set. Barclays Bank, through its 'Hello Money' scheme is the only mobile banking solution in India to operate on the USSD technology platform.

There are two limitations inherent in applications that leverage USSD. Firstly, the screen of a typical mobile phone can accommodate only 160 characters, and secondly, the mobile phone service providers impose a time restraint on a single session, ranging from 3 to 10 minutes. The above issues need to be addressed by designing the application user interface in a manner that the number of characters doesn't become a limitation and multiple sets of customer transactions can be executed within the allowed time limit.

Safety Measures

Mobile banking in India has a marked substantial improvement viewed by the government as a potent tool for financial inclusion. Still, there are many hurdles before it can fulfill its objective of reaching to the un-banked masses. Apart from the basics, one should be aware of the safety measures that one needs to take: -

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Dr. Gursharan Singh Kainth started his career as Lecturer at Post Graduate Dept. of Economics, Government College, Gurdaspur, and later at Khalsa College; Amritsar, specializes in Quantitative & Development Economics. Has the distinction of serving Punjab Agricultural Univ, Ludhiana, for more than 2 decades and remained Director-Principal of Saint Soldier Management & Technical Institute, Jalandhar. Currently, heading GAD Institute of Development Studies, Amritsar, a self-financed research institute. Has been honoured with various awards, including Guru Draunacharya Samman, Vijay Rattan Award, etc.
Article posted on December 1, 2008.