SMS messaging has received a lot of bad press in the past few months and there is a danger that the benefits of this communications medium may be tarnished by these alarming incidents.
First, there was the fiasco around Idols SMS voting when technical issues resulted in uncounted SMSes in determining the winner. Then there was the controversial MTN 15th year birthday SMS competition where participants were charged R7.50 per SMS. The competition was deemed an illegal lottery by the National Lotteries Board. Now, there is the Vodacom SMS banking fraud incident, where an employee assisted fraudsters by intercepting one-time passwords SMSed to a customer.
While all these incidents indicate very serious technical problems, legal issues and criminal threats, it may be worthwhile considering what the scenarios would have been without SMS messaging.
With or without it
Without SMS voting, interactive TV programmes would have had to rely on phone-in voting or Internet voting. Phone voting is much more vulnerable to unexpected high volumes, which means it becomes almost impossible to get through to the number. Internet voting would only be available to some, as there are fewer people with Internet access than with a TV.
Considering the alternatives, SMS voting remains the most convenient and potentially the most reliable voting mechanism available for TV audiences. With the Idols SMS voting fiasco, the bottleneck was the leased line bandwidth and probably also the message throttling rates between the operators and the application service provider. The capacity of both these aspects can be increased to ensure the running of a successful voting campaign.
SMS messaging is an ideal entry mechanism for promotional competitions. It allows easy interaction with adverts and with customers that have just purchased a product. Without the SMS channel, promoters of product and services would find themselves with less direct and immediate mechanisms to enable consumers to respond to a call to action. However, as MTN found out through its bad experience with its SMS competition, a promotional competition designed to generate revenue in itself loses its promotional value and could be very damaging to a brand. Instead, MTN should have followed mobile marketing best practice, where using a low premium-rate SMS cost band translates into consumer goodwill toward the brand offering the promotion.
Banking fraud is another matter altogether and poses the highest risk to the reputation of the mobile messaging industry. A few years ago, several instances were published of fraudsters hacking into Internet banking accounts by placing spyware on the computers of potential victims. SMS login notifications, and one-time password (OTP) notifications, were introduced by many banks to address this computer fraud. As a result, the risk of this type of fraud reduced dramatically. The recent bank fraud incident that included a Vodacom employee would have been considerably easier without SMS notifications as the SMS channel meant the fraudsters had to find a further means of intercepting digital communications using human interventions. SMS messaging has its limitations. SMS messages (and most e-mails) are not encrypted, and can easily be imitated.
Within boundaries
At the end of the day, consumers have to balance convenience against risk when it comes to online banking. No one is forced to use Internet banking, but people prefer Internet banking because of its convenience, even though the risk is higher than actually personally going into a bank.
In 2008, a total of six trillion SMS messages were sent globally.
Dr Pieter Streicher is MD of BulkSMS.com.
To ensure Internet banking is secure, the banks have put in place several checks, including SMS notifications, to guarantee that a consumer can authenticate their online account. In making online banking safe, each party - the consumer, the bank, and the telecommunications companies involved - plays a role in reducing the fraud risk. Consumers need to be aware of phishing of their banking details, and banks and networks need to ensure their systems cannot be comprised by hacking or interceptions of communications.
However, it must be borne in mind that SMS messaging has its limitations. SMS messages and most e-mails are not encrypted, and can easily be imitated in phishing attacks. It is here that consumers need to be alert to messages that masquerade as official banking communications, and not give out their personal or banking information to fraudsters.
Despite the above, there remains a strong business case for SMS as an important medium for communications, especially in implementing a multi-medium, interactive strategy to complement existing media and to enhance the security of many electronic activities.
In making this business case, it should be noted that SMS messaging has been the most successful communications medium since e-mail. Its growth attests to its key place in modern daily life: SMS messages can be sent to more than three billion people worldwide, and in 2008, a total of six trillion SMS messages were sent globally.
According to statistics put out by the Mobile Message Analyst, an Informa Telecoms & Media research service, the revenue from standard and premium-rated SMS messaging was $82 billion in 2008. This SMS revenue is forecasted to grow and reach $110 billion in 2013.
* Dr Pieter Streicher is MD of BulkSMS.com.
Share