Experts warn that if banks don’t keep up with technological advances and heavily market mobile banking – with an emphasis on its safety – they could lose out to third-party companies with a keen eye on how to make a buck. In fact, this has already started to happen in the Philippines, thanks to a new service from telecommunications company Smart Communications.

The service is known as Smart Padala (padala is a Filipino word meaning, “to send something”). It relies solely on text messaging, and therefore it effectively has circumvented the need to spend thousands on developing a made-for-mobile web interface. Smart Padala allows customers to instantly transfer funds from within the Philippines, and to countless countries abroad, at the speed and convenience inherent to a text message. All of this makes it the world’s first international cash remittance service that is serviced by mobile phones. The service charges customers a nominal pay-per-use fee, which is highly competitive to most banking fees. This will surely appeal to Generation Y’s who need their parents to quickly send them some cash on the go (just me?).

Companies like Smart Padala may prove to be a big threat to banks, who stand to lose billions if they don’t act quick and come up with convenient, secure and easy-to-use services that will lure both Generation Y folk and Baby Boomers alike.

A service like Padala doesn’t yet exist in the Americas, but it’s only a matter of time before it pops up here. In the meantime, banks would be wise to exploit this burgeoning niche before companies like Smart Padala overshadow them. -D.C., NewsExtensions.com.