Widening global footprints and a sharper focus on process efficiency have driven corporates to look for ways to harness the convenience and ubiquity of mobile technology for their financial services. In this piece we give an overview of the applications of mobile banking technology in the corporate environment and take an in-depth look at Deutsche Bank’s mobile authorisation technology solution that is available in Asia.
Overview
In recent years, the usage and scope of mobile banking technology has expanded as mobile handsets have become increasingly sophisticated and networks have become progressively more powerful and wide reaching. Indeed, according to Juniper Research it is estimated that by 2011, 150m people around the world will be using their mobile phones to perform banking and payment services.
An important driver behind mobile banking is the fact that the technology is no longer confined to voice activities – today the networks are capable of transmitting data, meaning that a new array of services has become available in the mobile space. Handsets can now act as a portal to a bank’s financial services, in a similar way to internet banking.
So far, developments in the mobile banking area – particularly payments – have largely been focused on the consumer market. As these services expand, however, banks are continuing to improve mobile banking provision for corporates, making payment processes more efficient, secure, flexible and user-friendly.
Why mobile technology?
Due to its simplicity and limited resource requirements, mobile banking technology is of particular interest in emerging market areas, such as Asia. Typically, the demographics of emerging economies mean that a large part of the population (therefore including employees) is unbanked. Despite this lack of access to banking services, the use of mobile phones is widespread – in fact the International Telecommunication Union’s ICT Development Index, March 2009 suggests that around 61% of the world’s population owns a mobile phone.
As such, mobile technology can be used to bridge the gap through the use of ‘mobile wallets’ for example, whereby companies could pay their employees by crediting a mobile account. Likewise, emerging market countries are often under-banked, meaning that those people that do have a bank account may not have sufficient access to a branch and its services. Mobile banking technology can allow payments to be made and received in remote areas and in real-time.
In terms of purely corporate usage, mobile technology can offer several applications to corporates on the move, which include initiating and authorising money transfers as well as receiving status updates and alerts.
Corporates are becoming more sophisticated in the services that they use to manage their cash and regulators are also looking at leveraging technology to introduce more efficient processes. As a consequence, banks are striving to provide cutting edge solutions and thereby driving the use of technology.
Another reason why mobile technology has taken off in the corporate space recently is the increased emphasis on working capital optimisation and efficient receivables management since the onset of the financial crisis. In order to achieve both of these goals, corporates are looking for real-time information to allow them to react quickly to situations and update their ERP systems accordingly.
In the field of consumer goods, for example, updating the ERP system more rapidly means that goods can be shipped earlier or dealer limits released earlier. In turn, this means that the customer is better served, relationships are improved and company turnover ratios are increased.
Enabling clients with innovative solutions
A leader in the Asian mobile banking technology space, Deutsche Bank has pioneered a mobile authorisation solution for corporates looking to leverage on this technology:
Leveraging Deutsche Bank’s proven internet banking platform – db direct internet – mobile authorisation is a service that allows corporates to approve electronic transactions through the use of a smartphone such as a BlackBerry, iPhone or Palm Treo. With this mobile authorisation solution, corporates can access transactional information on-the-go in a flexible yet secure environment.
Once the transactions are loaded up by the company onto db direct internet, the workflow is very straightforward.
Diagram 1: Authorisation on the go
For best results, it is recommended to use a smartphone with a wide screen such as BlackBerry, iPhone or Palm Treo. This will make navigation easier for viewing and authorisation.
Security
Company authorisers log in to the db direct internet mobile connection by loading the URL and typing in their user ID and dynamic token number.
In addition to this two-factor authentication, data transmission between users’ smartphones and the db direct internet server is fully encrypted using a PKI methodology to ensure privacy, integrity and confidentiality of data.
Benefits
Roaming access to transaction information for all types of payments and collections through a state-of-the-art infrastructure. Authorisations can be made on the move and in real-time.
Access to real-time information on pending transactions and availability of summary and detail level information as preferred.
User-friendly interface that can be accessed simply by using a GPRS, EDGE or WiFi enabled smartphone. There is no need for expensive technology set-up or installation.
Provision of service in some countries is subject to regulatory clearance.
Interview
Mobile authorisation in Asia
Niranjan Perera
Regional Head of Channel Management & Integration Services for Asia-Pacific
How established is the mobile authorisation technology market in Asia?
Use of this technology in Asia, as in the rest of the world, is relatively new. While consumer banking has taken a leap in adopting mobile technology, the operating model of mobile authorisation for corporate clients is new.
Although the market is pretty much in its infancy, the consensus is that this will grow dramatically over the next couple of years. At Deutsche Bank we have made it a priority to enter into this space now – at a time when markets are being tested and the players really have a chance to prove themselves. This is a good opportunity for us to find a niche in the market.
In rolling out this solution in the Asian market, what we have found is that across the region there are certain countries which are more closely regulated. In those countries, we are still working closely with the regulators to deploy some of these banking products.
Given a fast growing mobile phone ownership rate in China, we feel that this is an opportune time to offer mobile authorisation in China. This solution provides flexibility and ease of access and caters to multinational corporate, large local corporate and financial institutions which have a growing presence in China.
What differentiates Deutsche Bank’s mobile authorisation technology offering?
When we were developing this solution, we were conscious as to how we could make the solution popular among corporates. We found that one of the influencing factors was the time it takes to implement the solution. There are two ways in which mobile authorisation, for example, can be implemented: either you have a piece of software which you install on the mobile device, or the other option is to give the client a URL and they access it from their handset.
With the implementation timeframe in mind, we decided that we would go with the URL option as it is much quicker. Also, if someone lost their mobile phone they would have to install the software again on a new handset, which is of course not the case when using the URL solution. This speedy setup is definitely an advantage for all parties involved.
Who are the target customers for this mobile authorisation solution?
For mobile authorisation, I would say potentially any type of client, but the benefits will obviously be much greater for clients that are often on the go and for those operating across multiple regions or countries.
There are no specific technological requirements for customers – just a smartphone – so the solution really is open to all corporates.
Strategic developments going forward
Keen to expand on its current offering, Deutsche Bank’s Global Transaction banking (GTB) division has recently partnered with Luup, a European-based mobile payment provider, to extend its mobile capabilities to 80 countries across Europe, the Middle East and Asia.
This is the first time that a major commercial bank has offered a cross-border mobile payments service to both banking and corporate customers. It is expected that the first Luup implementations will take place within the next six to 12 months.
Within the foreseeable future, the bank will also be looking at strategically expanding the scope of its existing corporate solutions and mobile platform by incorporating features such as account and FX information.
Diagram 2: Deutsche Bank’s Asia-Pacific Network: A Unique Footprint
17 Markets – an Average of 31 Years in Each
Conclusion
As mobile technology solutions develop, it is likely that in the near future treasurers will have both sufficient information and technological capabilities to make effective business decisions remotely.
With high expectations for mobile solutions in emerging, fragmented, or geographically disparate economies, countries in Asia such as China and India, with a large landmass and pockets of economic activity, look well positioned to benefit from mobile banking technology going forward.
Deutsche Bank
Deutsche Bank is a frontrunner in cash management and has established itself as the global competence for transaction processing for corporates. Ongoing strategic investments into global processing infrastructure and web-based technology deliver new levels of straight through processing and automated reconciliation.
We are also committed to driving the cash management industry forward through various initiatives to increase efficiencies throughout corporate treasury’s financial value chain. Combining strong operational efficiency with recognised quality in service delivery, Deutsche Bank is a clear choice for corporates.
Our customers are supported in their domestic, regional and global cash management programmes through Deutsche Bank’s extensive global network of offices in all major and secondary financial markets, and hubs in Frankfurt, London, New York and Singapore.
Deutsche Bank was recently named Best Transaction Bank and Best Cash Management Specialist for Corporates in Asia Pacific in The Asset AAA Transaction Banking Awards 2009. The Bank offers a full suite of robust and reliable cash management solutions to corporate institutions located throughout China.
