The past week has seen four banks and their four telecom partners announce the imminent debut of their mobile banking services. Given the convenience of the service and the Taiwanese market's high mobile phone penetration, mobile banking looks set to become the wave of the future, bankers say.
Yesterday saw the launch of Chinatrust's (
This followed hot on the heels of Tuesday's announcement by Taishin Bank (
PHOTO: CHEN CHENG-CHANG, TAIPEI TIMES
Bankers see great potential for the service. "Mobile banking will develop much faster than PC Internet banking, because of the very high penetration of mobile phones in the Taiwan market," said Peter Jiang, general manager of Chinatrust's planning and marketing department.
"Taiwan is almost as much of a mobile phone country as Finland. The only other form of potentially interactive technology that has such high penetration is cable TV."
Mobile banking has already proven popular in Hong Kong and Singapore, although according to Jiang, it has yet to overtake regular phone banking.
Until now, the greatest obstacle to the launch of the service in Taiwan was gaining the seal of approval from the finance ministry. The ministry was known to have been worried about the possibility of hackers breaking into the system and rerouting funds, similar to the concerns the finance ministry had about the security of Internet banking.
To this end the banks and telecom firms concerned have had to satisfy the ministry that strict standards for security have been met. Chinatrust and Taishin, for example, both use a French system, with multiple security codes, that has already proven successful in such other countries as Singapore.
It's early days yet, though, with the Chinatrust - Chunghwa venture only having 5,000 SIM cards available to satisfy market demand until the end of the year. However, analysts see mobile banking as a future essential service in Taiwan's increasingly competitive consumer banking market.
"Eventually it will be like the ATM -- if you don't have it you're dead," said an analyst at a foreign securities house.
One important factor for future development of the market is that the deals brokered between the bank and the telecom companies are not exclusive deals.
"In Taiwan we have lots of banks, but not very many telecom operators," said Hwang Ming-ju, a managing director at Chunghwa Telecom (
Analysts say that the pairing of Chinatrust and Chunghwa makes sense since Chunghwa is currently the biggest mobile phone service provider in Taiwan with just over 3 million accounts, while Chinatrust is the leading domestic consumer bank, with more than 2 million credit cards in circulation.
In terms of development costs, the telecom companies are footing the heavier bill. "Our service cost us NT$50 million to develop," Chinatrust's Jiang said. "But Chunghwa spent much more."
Because mobile banking services are new, the range of services available is still limited. For example, Chinatrust hopes in the future to have a facility for people to pay their bills, change their credit card limits, order plane tickets and so on.
"In the future you should be able to do anything except getting actual cash and stock certificates out of your phone," said Chang Nan-hsing, vice president of the personal financial service division of Taishin Bank. Most telecom operators already provide a range of financial information via their systems.
One important service for many people is the ability to transfer funds to other accounts. At present, such a service is only available on selected accounts, where the user has submitted these account numbers to the bank for approval. "This is for security reasons, so the transfers can be traced," said an official at the Ministry of Finance's Bureau of Monetary Affairs, who declined to be named. "It's for the customers protection."
Because the service is in its preliminary stages, banks are still unsure what services will prove most popular, and for whom. Taishin Bank, for example, is betting that its stock-purchasing services will go down well in the local market.
One problem that remains, Chinatrust's Jiang said, is that market research conducted by the bank indicates that those who are most likely to use the service -- tech-savvy young people -- are not the ones who would benefit most from it -- the hyper-busy bosses of SMEs.
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