It seems like the world is going wireless these days, including the banking and trading industries.  Wireless banking and trading is still in its infancy stage, and one must keep up with new products, new technological breakthroughs, and developmental aids to help with transitions from the old to the new.  Standards are changing for APIs (interfaces), gateways, security methods, screens, operating systems, browsers, handheld devices, and different bandwidth requirements.

All these changes reveal risks to systems and consumers.  Wireless banking and trading can be risky, lengthy, and complicated to develop and use.  Interfaces must be able to connect backend systems already in place, and application servers have to accommodate all protocols and devices.  This is a must because manufacturers do not know which device users plan to use.  This is true for application servers – they must be able to communicate with all gateways like WAP, GSM, two-way pagers, and other devices.   Wireless networks function independently, and many devices, especially handheld, utilize their own standards to deliver data over data channels.  Users personalize by customizing screens, alerts, notifications, and messaging devices easily.  Systems should be capable of sending notices to users as needed regardless of devices types and brands.  Platform selection is important and challenging for banking institutions and should not be done independently.  Platforms should have the ability to integrate easily and reliably with new gateways to the backend or existing system.  Some banking institutions outsource the development, implementation, and hosting of their systems and some may choose to use a third party to implement and host their system.  All are viable options.

Security is the most important issue facing financial institutions today.  In an age of wireless communications with millions of users, all systems – whether wireless or cable – run the risk of hackers sometimes resulting in devastating losses.  Wireless financial transactions are more attractive targets for the criminally-minded as their gains are greater.  Users have worries that personal identifying information – credit card account numbers, identities, and other information – may be stolen.  Such fears are confirmed with statistics indicating that more than ninety percent of corporate documentation/financial files have been hacked.  Data flows through wireless devices are vulnerable with many systems offering little to no security with most security transgressions being carried out by employees working within the institutions or even the service providers themselves.   Individual computing powers of handheld devices limit the ability to customize security, and many facilities that handle financial transactions are using a two-step code verification procedure as a means to protect and verify accessibility.  This means that the user must be able to enter the correct codes to gain system entry.  These codes must agree in order to authorize any transaction.  It should be noted that the use of a two-step code verification procedure has shown a drastic reduction in the number of hacking incidents simply because of the requirement for personal knowledge of the same codes by the user, the service provider, and the financial institution.  Another widely used system is the PK1 or Public Key Infrastructure utilized by many personal digital assistants and other similar devices.   This system employs the use of two keys – public and private – to verify and decode data. The bank or other institution then uses the same system to prevent unauthorized system entry.

It is more or less a question of what is better – speed or security.  Encryptions vary depending on the platform used and the operating system with encryption speeds varying according to software selected. Another aid in security protection is the use of user identifications and individualized unknown passwords.