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Great article! Drawing an analogy between smartphones / tablets and laptops is a masterstroke in making the case for the adoption of mobile devices in investment banking applications.

Now, the bad news: A Top 5 UK bank had a corporate policy until three years ago not to have WiFi on its corporate laptops! (To be sure, their policy changed later).

Point is, while security might be the bogey, the bigger challenge might lie in finding compelling reasons for using mobile devices to access such applications in the first place viz. does smartphone-based trading improve trader productivity without introducing new compliance risks; can a financial adviser increase ticket size by reviewing the customer's portfolio on a tablet, etc. The challenge is exacerbated by the fact that banks have already invested in enabling these applications for laptops not so long back and now need a strong business case to justify additional investments to enable them for mobile devices. While only time will tell when and whether this will happen, we can be reasonably sure that alleviation of security concerns will not be the tipping point.

There are precedents of banks using differential charges to trigger the desired consumer behavior w.r.t. method of payment and channel e.g. charges for making credit card payments by cash so that people pay electronically, higher charges for making a cross-border fund transfer by visiting the branch instead of doing it via Internet Banking, etc. That being the case, I've never understood why banks don't levy charges in proportion to the higher processing costs for cheques alongside giving credits for users who face downtime and confusion while using ePayments. We'll then have a basis of figuring out whether cheques are really more convenient as compared to its alternatives, and whether its alternatives really work as frictionlessly as cheques.

On another note, cheque is not the only form of paper-based payment instrument. I can think of at least one more, namely, the Ueberweisungsauftrag - or credit transfer order - that's quite popular in Germany. Banks convert them to electronic forms before forwarding them for clearing. Therefore, they're treated as ePayments, but, in the hands of the payors, they're paper-based. While they might not use cheques, users of such alternative instruments in such countries are unlikely to be amused with what's happening in UK or find cheques so archaic. 

If there's one practical takeaway I gathered from a few successful regulatory programs (e.g. FPS) and other not-to-successful ones (e.g. SEPA), it's this: Regulators and banks should see themselves as being on the same side of the table. While purists might see such an approach as having similar hazards as letting MPs vote on a bill for their own pay rise, an adversarial positioning between regulators and banks doesn't help either. By often resulting in (a) Specs being fed in drip-feed mode (b) Unrealistic deadline pressures and (c) Stigma of missing cutover dates, an adversarial position discourages holistic views even within a single regulatory program and precludes any scope for out-of-the-box thinking around how a bank or FI could add business value to its compliance initiatives. 

@Craig R:

Apart from TARGET2 which is only applicable for EURO payments, are you aware of any realtime, cross-border, bank-to-bank payment methods? The fastest I've come across for, say, the USA-INDIA corridor, is the T+2 Amex FX International Payments product.

Interesting article. Only yesterday, I came across a very useful perspective about the difference in drivers for online advertising on search (e.g. Google Search) versus social networks (e.g. Facebook). According to this viewpoint, search is more relevant for food, housing, employment and other things at the bottom of Maslow's famous pyramid of human wants and needs whereas social network is more applicable for esteem, recognition and other things on the upper layers of the pyramid. While only time can tell how well this predicts relative market share of Google AdWords and Facebook Ads, this perspective did sound quite logical at first glance. 

According to BillGuard, it keeps its service free by making money from banks that offer its advanced card protection services to their (i.e. banks') customers. Banks could invest in implementing realtime, 2-way SMS alerts for all / selective user-defined credit card transactions as an alternative / additional way of solving this problem, as I'd pointed out in my two recent Finextra blog posts:

https://www.finextra.com/blogs/fullblog.aspx?blogid=5772

https://www.finextra.com/blogs/fullblog.aspx?blogid=5801

Unfortunately, anecdotal evidence weighs heavily in favor of the opinion expressed by anonymous Finextra Member's comments. Although I belong to the minority, it appears that an overwhelming majority of over 90% of people don't check their credit card statements, at least not regularly or thoroughly enough to spot fake charges. Technology can help, though: A more practical alternative, at least for US residents, is a website like BillGuard.com, to whose CEO, btw, I should give credit for the above statistics. 

@Finextra M & John D: Thank you for your comments.

@Finextra M: With vested interest egging them on, we can be sure that banks will go the distance to make this product work perfectly (like BANK2 in my example already seems to be doing)!

@John D: From your comments, it appears that SMS alerts have not become the norm even for checking account, let alone credit card, transactions. (I always thought only the latter was new). If so, it's definitely high time they did. Many banks in India, including the BANK2 cited in my post, have been providing SMS alerts for checking account transactions for over 4-5 years, including condition based ones that you've described. Most of these products, including the one from BANK2, are free-of-cost. I also remember one of my UK bank accounts launching such a product around 2-3 years ago, albeit for a nominal fee.          

Certainly a "cool app", one that will help banks put one more tick in their 'social media strategy' box. However, by adding fuzzy check-in data sourced from social networks to already fuzzy fraud detection algorithms, won't the "false positive" rate shoot up? Realtime 2-way SMS alerts at the point of sale might mitigate this risk more reliably.    

Goes to show that the channel journey is not so unidirectional after all and how all predictions of the death of the branch are so out of touch with ground reality. I recently gave up on mobile payments when friction jumped up severely after 2FA was made mandatory. Lately, the number of hoops I have to jump to make an ePayment is almost pushing me over the brink to go back to the convenience of checks. Not that I look forward to the day, but greater security risks impacting Internet Banking could well multiply friction by way of mitigating solutions so much that I go back to branches some day.