Mobile money is all the rage in developing markets around the world. Ordinary people who don’t have credit cards or even traditional bank accounts are using their mobile phones to make payments, buy things and manage their money in Kenya, South Africa, the Philippines, India and elsewhere. But there’s a glitch: Today’s mobile money systems are vulnerable to theft and fraud. That’s why scientists at IBM Research – India are developing analytics technologies to make mobile money a safer bet for individuals and society.
I don’t use the word “society” lightly. The stakes are high. The Indian government, for instance, has identified what is calls “financial inclusion” as a national priority. Hundreds of millions of Indians have not benefited from the country’s rapid economic rise. If they don’t see progress eventually, their discontent could destabilize the country. “This is a large business opportunity for us, and it has major social implications,” says Manish Gupta, director of the India lab. One of the lab’s top agenda items is developing technologies tailored for emerging markets–where rapid growth and severe privation often walk hand in hand.
Gupta and his colleagues are working with telecommunications and banking companies to develop technology solutions that will address the mobile money crime problem as it emerges. Gupta also expects the initiative to be a topic for discussion at the lab’s IBM Centennial Colloquium, which is being conducted in a Delhi hotel today. The theme of the colloquium is India 2020: Technologies for a Smarter Nation.
The confab is part of an IBM Centennial program designed to convene thought leaders – including leading researchers and scientists, academics, leaders of industries, public policy makers and key IBM clients — for a series of talks and panel discussions on transformational technologies and their potential impact on the world. In India’s case, about 250 students are also attending.
India’s poverty problem is large and acute. The masses don’t have access to credit at reasonable rates to start or sustain small businesses. Deeply indebted farmers are committing suicide. Mobile money could help address some of the social problems. But it also could be a source of trouble. If mobile phones that are equipped with money applications are stolen, their owners could lose much more than their handsets. It’s tough enough for banks to detect fraudulent transactions in their primary activities; but mobile money applications make it even more difficult, since the transactions are so many and, at the same time, so small.
The first step for the IBM researchers is studying the problem. They’re busy learning how crooks take advantage of mobile money systems. Once they understand those tricks, they can design systems that spot patterns and alert banks and telecommunications companies to what’s going on–so the crooks’ activities can be shut down. “We’re early in the game. We’re studying the patterns and putting together an architecture,” says Gupta.
Early, yes. But this is how innovations with the potential for large impacts are born.