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Transcript of Mbanking Report Final
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M
BaTrK. Sud
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2012
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ContentsExecutiveSummary............................................................................................................................................iii
IntroductionandBackground..........................................................................................................................1
Indian banking and cellular market ............................................................................................................................ 1
Banking and Mobile Phones: A Potentially Happy Indian Marriage ............................................................. 3Mobile Banking in India today....................................................................................................................................... 5
Technological and regulatory factors impacting future growth ..................................................................... 6
MobileBankinginIndia:BarriersandAdoptionTriggers.....................................................................9
Study Objective and Design ............................................................................................................................................ 9
How does the Indian consumer bank? ..................................................................................................................... 10
Issues faced in traditional banking....................................................................................................................... 12
Awareness and adoption patterns for mobile banking ..................................................................................... 14
Sources of awareness ................................................................................................................................................. 14
Triggers for adoption ................................................................................................................................................. 15
Barriers to adoption ................................................................................................................................................... 16
Who is using mobile banking today? ................................................................................................................... 19
Frequency and patterns of use among mobile banking users ........................................................................ 21
Types of tasks by SEC and over tenure of use .................................................................................................. 22
Postadoption changes in traditional branch banking habits ................................................................... 24
Who will be the future users of mobile banking in India? ............................................................................... 24
Likelihood of usage among current nonusers ................................................................................................ 24
Future: Drawing from lower socioeconomic strata ..................................................................................... 25
Conclusion.............................................................................................................................................................27
Appendix1:Somemobilebankingmodelsindevelopingcountries...............................................29
Appendix2:SurveyQuestionnaire..............................................................................................................30
Recruiting Questionnaire .............................................................................................................................................. 30
Screener ................................................................................................................................................................................ 34
Detailed Questionnaire ................................................................................................................................................... 60
Section 1 Overall Banking Information ............................................................................................................ 60
Section 2 Usage of Internet banking .................................................................................................................. 66
Section 3 Usage of Mobile Banking .................................................................................................................... 68
Section 4: Expected Usage among Respondents aware (but nonusers) of Mobile Banking ....... 73
Section 5 Mobile phone usage .............................................................................................................................. 76
Section 6PC/Internet usage ................................................................................................................................... 79
Section 7Demographics ........................................................................................................................................... 82
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ExecutiveSummary
Globally, mobile banking services have become a popular method to conduct financial transactions.
Indias mobile banking sector is in a nascent stage and poised for rapid growth. To better
understand this sector, this report presents findings from a survey conducted in April and May
2012 across five Indian cities. Respondents in socioeconomic classification (SEC) A12 and B12were asked an array of questions on banking habits, adoption and use of mobile banking and
cellular phone usage.
Key findings of the survey include:
Thereisconsiderabledissatisfactionwithtraditionalmodesofbanking
82% of respondents complain that travel time is the top pervasive problem
Mobile banking is more popular than branch banking in several categories: 58% ofcustomers deposit and transfer via mobile vs. 44% at the branch.
Less than 30% of respondents use Internet banking for any task.
Televisionandwordofmoutharethemostpopularsourcesofawarenessformobile
banking
62% of mbanking users and 50% of nonusers heard about mobile banking fromfamily, friends of colleagues.
Less than 10% of respondents heard directly from their banks about mobile bankofferings.
Comfortandconvenienceisatoptriggerforadoptingmobilebanking
88% of mobile banking users cited the comfort and accessibility of their phone as thetop reason for adoption.
Checking and viewing bank balances is first and most common task Experienced users use mbanking 50% more weekly than new users and perform more
sophisticated tasks.
37% of SEC A1/A2 respondents use mbanking compared to 23% of B1/B2respondents.
Technologyproblemsbiggestbarrierstoadoptionanduse
Incompatible cellphone and mobile network problems top hurdle for 70% of nonadopters
SEC A respondents are relatively more concerned about security and customer supportissues, SEC B face more technological and awareness problems
Thirdgenerationcellulartechnologyandsmartphonesboostadoptionanduse
41% of 3G user also use mobile banking vs. 30% of 2G users 49% of smartphone owners do mbanking while 0% of those with basic phone do
Users and nonusers of mobile banking look much more similar once technology isaccounted for.
Mobilebankingusersarehighlysatisfiedwith experience
94% of mbanking users say physical visits to the bank have been reduced sinceadoption.
90% of users would recommend use to family and friends.
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1
IntroductionandBackgroundMobile banking (mbanking) has emerged as a popular mode of banking in many developed and
developing countries. In India, there are approximately 12 million mobile banking users and this
figure is expected to grow rapidly with mobile transactions exceeding credit card transactions by
the end of the decade. By some measures, there are more mobile phones in India than there are
bank accounts. The combination of two factorsa large unbanked population and the ubiquity of
cell phonesis a catalyst for high mobile banking adoption. To fully understand the current status
and future trends in this market requires some comprehension of the general banking sector the
turf where mobiles compete with physical bank branches and computers. Also, knowledge of
cellular phone penetration is needed to get a sense of who mobile banking services will reach. The
following pages provide a brief background on these topics and some information on the structure
and services in the mobile banking sector.
Indianbankingandcellularmarket
BankingmodesavailabletotheIndiancustomer
There are 80 commercial banks in India, operating around 77,000 branches and with over 1 millionemployees. The sector is mainly composed of public, private and foreign banks. In addition, there
is also a vast network of rural banks and credit institutions. But despite such a sprawling network
of institutions and much push from the government for financial inclusion, more than 70% of
Indias population remains outside the formal banking sector. In recent years, technology has
expanded channels through which consumers can interact with their financial institutions,
providing not only easier access to the existing base, but also facilitating penetration of financial
services among the population. Box 1 depicts the various banking channels available to the Indian
consumer.
Brickandmortarbranchnetwork:Brick and mortar branches are the foundation of Indias
banking system. In India, these branches can range from complex operations with hundreds ofemployees in dense urban locations to oneman, singleroom branches in rural areas. The
nationalization of banks in the late 1960s and early 1980s was accompanied by government effort
towards bringing more and more of the population into the banking net. Tight regulations
governed the expansion of branches, with a view to increase inclusion; banks were required to
open certain number of rural branches for any nonrural branches they wanted to operate. Despite
such regulations and encouragement, branches per capita remain among the lowest in emerging
markets (12000 people/branch). The typical scenario inside a traditional Indian bank involves
waiting in long queues even for the simplest of transactions, such as a passbook update or cash
withdrawal.
Automatic
Teller
Machines
(ATMs):
Innovations in banking delivery channels started with theintroduction of ATMs as a selfservice delivery channel in the late 1990s. ATMs also marked the
entry of anytime banking as customers could now access money from their bank accounts at a time
of their convenience. As of 2012, ATMs remain the most successful delivery channel in India
followed by telephone banking and internet banking. With about 75000 plus offbranch and in
branch ATMs installed, banks are seeking to reach out to a large customer base at a substantially
lower cost, giving them easier access and faster service. The State Bank of India and associate
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2
banks own the largest number of ATMs at 25,060. They are followed by Axis Bank (6,270), ICICI
Bank (6,104), HDFC Bank (5,471) and Punjab National Bank (5,050).1
Typically, a transaction, which costs Rs. 50 at a branch, costs about Rs. 15 if done through an ATM.
Research shows that the number of footfalls at bank branches has fallen drastically after the
installation of ATMs. In order to further reduce the cost of service delivery and revenues throughATMs, banks have started outsourcing and sharing of ATM services and crossselling other
products. Some banks have already started dispensing railway tickets and movie tickets through
their ATMs. In the future, a banks ATM may function like a kiosk delivering many more noncash
transactions, further increasing the profitability of ATMs.
InternetBanking:Increasing interest in selfservice continued and internet usage prompted banks
to introduce the concept of anywhere banking. Customers could now access their bank accounts,
check their account details, get their bank statements, transfer money to other accounts and pay
their bills from the comforts of their home or office. Internet Banking, also offered significant cost
advantage to banks. A netbased transaction costs the bank only around Rs. 4, which is much lowerthan even an ATM, mainly due to savings on prohibitive real estate costs as well as labor costs. 2
However, internet banking has grown slowly in India due to a combination of psychological, legal,
technological and socioeconomic factors. The biggest limitation of internet banking is the
requirement of a computer with an internet connection, which is not a common across Indian
households. A lack of critical mass of early adopters, lack of a strong trust environment, slowness in
adoption of internet, low penetration of PCs and access to internet are some of the impediments in
the adoption of internet banking in India. Security issues also loom large and customers restrict
usage of Internet banking to their home and office computers.
HighpenetrationandrapidgrowthintheIndiancellularmarket:The spread of mobile
phones across India is one of the most remarkable economic and technology success stories of the
last 15 years. It has contributed significantly to the growth and modernization of various sectors
and the overall socioeconomic development of India.
The number of mobile phone subscribers in India reached a whopping 916 million at the end of
March 2012. The Indian mobile phone industry registered a consistent overall growth rate of
around 45% annually in terms of subscribers. The sector, as shown in Figure 1, remains
competitive with several domestic and international players vying for this growing customer base.
Today, a mobile phone has become an essential part of an average Indians existence. This is a
result of positive regulatory changes, intense competition among multiple operators, lowpriced
handsets, prepaid cards, low tariffs and significant investments in telecom infrastructure. The welldistributed network of telecommunication services in India has resulted in widening of markets,
efficient information flows, lower transaction costs and an effective substitute for infeasible
physical transport.
1Banks install 19,000 ATMs in 201011
http://articles.economictimes.indiatimes.com/20110408/news/29396871_1_atmsnpcinationalfinancialswitch2Retail Banking: Challenges Ahead in Distribution Channels in Urban/Rural India, RBI Bulletin, January 2004
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Box1:B
Bankin
Deman
Custome
channel t
comes of
growing
segment
banking i
experien
On the s
the incre
from co
concepts
alternati
For billio
tool for c
withoutcommun
financial
Approxi
National
househol
BrancBanki
Physicall
visiting b
for any
financial
transacti
or activiti
nkingmod
gandMo
fromthe
s in India, e
hat gives th
age in a rap
momentum
is accustom
s wellpoise
e.
pplyside, b
asingly com
peting mer
that span ac
e channels
ns of lower
ommunicati
ank accounties and nat
institutions,
ately 40%
Sample Sur
ds of India
g
nk
ns
es
ABa
Physi
visiti
ATM f
finan
trans
or act
esinIndia
ilePhon
bankedan
specially urb
m quick an
dly growing
or personal
d to having
d to become
anks are no
etitive fina
ly on price t
ross multipl
f customer
ncome peop
n. It can als
s, setting ofons. Only ac
mobile ope
f the Indian
ey data also
o not have a
Mking
ally
g an
or any
ial
ction
vities
IB
Usi
co
acc
ba
we
thr
bro
per
fin
tra
s:APote
dunbanke
an and rura
efficient ba
economy, e
ized, speed
access to inf
a crucial pa
exploring i
cial service
o managing
e channels o
cquisition,
le around t
o become a
a virtuoustive collabo
ators and h
population
shows that
ccess to any
ternetanking
ng a
puter to
ess the
ks
site
ough a
wser to
form
ncial
sactions
ntiallyHa
d
unbanked
nking soluti
posed to gl
, anywhere
ormation at
t of this enh
nnovative b
arena. The
cost structu
f delivery. T
nd means t
e world, a m
eans of ext
circle of beation betwe
ndset manu
oes not hav
1.4 per cen
credit from
MobileBanking
sing
obile
hone to
ccess the
anks
ebsite
hrough a
rowser or
mobile
pp to
erform
inancial
ctivities
ppyIndia
ustomers, a
ns. As Indi
bal trends
anytime ba
their conve
anced cons
siness mod
are seekin
es, by lever
ey are also
enhance t
obile phone
ending fina
efits to indien financial
facturers wi
e any acces
of the near
institutional
SMSBanking
Subscribing
for SMS
alerts from
the bank.
Receiving
alerts in
case of cash
withdrawal,
money
transfer,
credit/
debit card
transaction
nMarriag
re searching
s large yout
nd technolo
king service
ience and 2
mer bankin
els of banki
to make a s
ging disrup
aggressively
e service ex
represents
cial services
viduals, famand telecom
ll make this
to financial
y 89.3 milli
or noninsti
PhonBanki
Transacti
over the
phone wi
the bank
helpline/
call centr
e
for a delive
hful populat
gy, there is
s. This targe
X7. Mobile
services
g to survive
rategic shif
tive service
exploring
erience.
ore than j
to people
ilies,regulators,
ossible.
services. Th
n farmer
tutional sou
g
ng
th
e
DooBan
Havin
someo
visit y
from t
bank a
your h
to carr
your
financ
transa
/ activ
3
y
ion
t
in
st a
e
rces.
steping
ne
u
e
t
ome
y out
al
ctions
ity
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the unba
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Accordin
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eing added
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5
technologies costs only $209. The RBI reports that while the government typically incurs a
transaction cost of 1213 per cent, mobile banking brings this cost down to 2 per cent.4Mobile
banking offers the physical proximity that other methods like branch banking and even technology
based channels such as the Internet or ATMs, cannot match. With mobile banking, customers now
essentially carry their bank with them, truly facilitating, anytime, anywhere banking.
Banks have started offering informationbased services like balance enquiry, stop payment
instruction of checks, transactions enquiry and location of the nearest ATM/branch on mobile
funds. Acceptance of transfer of funds instruction for credit to beneficiaries of same/or another
bank in favor of preregistered beneficiaries have also commenced in a few banks. Additionally, this
new channel gives the bank ability to crosssell and upsell their other complex banking products
and services such as vehicle loans or credit cards.
Since only 40 per cent of the adult population has bank accounts, whereas more than 70 per cent of
adults own a mobile connection, linking banking with telecom seems to be the correct choice for
Indias commercial banks. With a large mobile handset penetration, it is the obvious choice to crossthe extremely low credit/debit card penetration barrier (which is below 10 per cent of the
population). The high penetration levels of mobile phones and low transaction costs involved in
mobile banking are likely to be the potential growth drivers for these services.
MobileBankinginIndiatoday
Mobilebankingbusinessmodels5
The predominant model for mobile banking in India is the bankledmodel wherein banks are the
focal point of transactions and it is their brand that dominates. Mobile banking is offered to
customers/depositors of the particular bank and all accounting and transfers are through the bank.
A variant of this model is where telecom operators and banks partner to offer services. Examples of
these are joint ventures between Airtel and Axis bank and Vodafore Essar and ICICI Bank. Often, the
cellular service operator will provide a customized platform or builtin applications to facilitate m
banking transactions.
Banks with mobile banking options offer services in the general categories of account information
provision, payments and transfers, investments, support and content services. Table 2 provides
more details on these segments. Most mbanking/mpayments systems in India enable users to do
i) Store value (currency) in an account accessible via the handset. If the user already has a bank
account, this is generally a question of linking to a bank account. If the user does not have an
account, then the process creates a bank account for her or creates a pseudo bank account, held
by a third party or the users mobile operator.ii) Convert cash in and out of the stored value account. If the account is linked to a bank account,
then users can visit banks to cashin and cashout. In many cases, users can visit a corner kiosk
4Mobile Banking: Opportunities and challenges in the Indian market
http://www.tele.net.in/discussionboard/item/7732mobilebankingopportunitiesandchallengesintheindianmarket5Morawczynski, O. & Miscione, G. (2008). Exploring Trust in Mobile Banking Transactions: The Case Of MPesa InKenya,, SocialDimensionsofInformationandCommunicationTechnologyPolicy, pp. 287298
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6
or grocery store and transact with an independent retailer working as an agent for the
transaction system.
iii) Transfer stored value between accounts. Users can generally transfer funds between accounts
linked to two mobile phones, by using a set of SMS messages (or menu commands) and PIN
numbers.
Technologicalandregulatoryfactorsimpactingfuturegrowth
Information technology holds a promise to change the face of consumer banking in the next few
years through the convergence of banking and telecom players.Technology will become imperative
in banking for providing convenience in product delivery, increasing productivity and performance.
As mobile networks in India are upgraded with WAP, GPRS and UMTS to deliver nextgeneration
multimedia services, banks can provide a host of services on mobile phones and will have
immediate and full control over their finances. Customers will be able to view their account
statement, transfer funds between accounts, get instant notifications whenever they transact. Next
generation mobile banking services will deliver significant improvements with userfriendly icon
driven instructions, instant access, security and immediate transaction processing all at a lower
cost. Banks can also attain higher levels of customer satisfaction and increased loyalty by providing
anywhere, anytime banking. They will also benefit further from lower administrative costs, fewer
branches, reduced headcount, streamlined call centers and lower handling charges savings that,
hopefully, will be passed onto customers. Considering the farreaching impact of certain
technologies, we should expect to see major shifts in the banking industry unlike any we have seen
before
Box2:Mobilebankingservice
AccountInformation Ministatements and checking of account history
Alerts on account activity or passing of set thresholds Monitoring of term deposits
Access to loan statements
Access to card statements
Mutual funds / equity statements
Insurance policy management
Pension plan management
Payments&
Transfers
Domestic and international fund transfers
Micropayment handling
Mobile recharging
Commercial payment processing
Bill payment processing
Investments Portfolio management services
Realtime stock quotes
Personalized alerts and notifications on security prices
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Impactoflaunchof3Gonmobilebankingservices
In India, the current 3G footprint is limited to the metros and urban/ semiurban areas. In the short
run, 3G will only have an indirect impact as mobile banking services are not bandwidth intensive
and, thus, do not need highspeed connectivity. However, soon enough, 3G will be a key factor in
mobile banking gaining traction. This is because it offers increased security protocols and morebandwidth for secure mobilebased transactions. Third generation technology will also drive the
uptake of smartphones which will enable more secure and userfriendly interfaces for mobile
banking applications.
Managingthenetworkserviceproviderrelationship
By virtue of its very nature of operation, mobile banking brings a certain clash of interest with
respect to ownership of end customers and revenue sharing between network service providers
and financial institutions. Network service providers offer mobile services for users and often they
also provide heavily subsidized handsets. Financial institutions share a relationship with the
customer in terms of holding the account and credit card, owning the expertise to process
transactions, and so on. Given this scenario, it is obvious that the financial institution must clearly
establish the dynamics of the partnership, for business viability. Mobile banking solution providers
would do well to optimize the deployment mechanism to reduce dependency on network service
providers, to a viable minimum.
Prudentregulation:Akeyfactorinfuturegrowth
A number of regulatory policies stymie mobile banking in India. Fullscale commercial
implementation of rural mbanking is complex, as it requires a multitude of players, such as
telecom operators, mbanking product developers, regulators and financial institutions to envisage
and coordinate delivery. In 2008, the Reserve Bank of India (RBI) laid out operating guidelines for
mobile banking transactions, which include methods for banks to collaborate with telecom
providers, strengthening the security framework and laying down common standards for
completing transactions. The Reserve Bank of India permitted only licensed banks with a physical
bank presence in India and bars nonbank finance companies and microfinance institutions to
launch mobile banking. This disqualifies mobile network operators from offering their own service.
Services were restricted to customers of banks and holders of debit/credit cards issued as per RBI
guidelines.
Support Status of requests for credit, including mortgage approval, and insurance
coverage
Check book and card requests
Exchange of data messages and email, including complaint submission and
tracking
Content
Services
General information such as weather updates, news Loyaltyrelated offers
Locationbased services
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8
The RBI has taken a step forward by removing the Rs 50,000 transaction limit through mobile
phones with a view to allow customers to transfer bigger amounts. However lenders may place per
transaction limits based on their own risk perception with the approval of their boards. RBI has
also allowed banks to appoint forprofit banking correspondents (BC), including telecom operators
and limits relating to having the BC within a fixed distance of the bank have also been relaxed.
The regulation on mobile banking is moving in the right direction but the RBI should look atlowering the entry cost. For example, the KnowYourCustomer (KYC) norms6applicable to telecom
companies rather than banking KYC rules should be adequate for opening an account. It is
expensive for operators to comply with these regulations especially when customer volumes have
not stabilized. A few more enabling regulations largely centered on unifying account opening and
controls between operators and bank will lower cost and increase viability. Increased viability will
ensure faster scaleup and proliferation of services. The regulator should define the extent to which
mobile operators can substitute or replicate services that banks traditionally offer. The RBI has
been reluctant to allow nonbanking players like telecom operators to carry out banking operations
and requires such services to be offered in partnership with the existing national banks.. These
issues need to be addressed on the policy and regulation front. Financial inclusion reforms shouldalso provide norms for mobile banking for the rural population. Stringent security norms and a
framework for preventing fraud are needed to change the perceived insecurity of mobile banking
transactions. The RBI has in the last few years, taken positive steps towards facilitating inter
operability among banks for mobile payment through the interbank mobile payment. However, a
more integrated approach and framework for mobile banking is the need of the hour. The RBI still
has some way to go in terms of facilitating the mobile ecosystem for growth with an integrated
framework. Policymakers and regulators face twofold challenges regarding Mbanking: first, to
encourage banks and mobile operators to develop solutions that are not proprietary and second, to
allow access to potential new entrants who may disrupt the lucrative business models of the banks
and mobile operators. The key challenge is to do this while at the same time ensuring high levels of
security and trust. It is important that mobile banking is not seen as a turf war between the
financial and telecommunication sectors but as something, that complements existing financial
services.
6KYC rules require that banks require a system of documentbased registration and the mandatory physical presence ofthe customer to open accounts
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9
MobileBankinginIndia:BarriersandAdoptionTriggersMobile banking has grown at a blistering pace in across many developing and developed countries
around the world. In India relative to a very high mobile penetration rate, the use of mobile banking
(mbanking) services remains low. However, with new cellular technology as a catalyst, mbanking
looks wellpoised to draw in millions of new users, who tired with the lumbering brick and mortar
banking facilities, seek timesaving and easily accessible alternative banking modes.
StudyObjectiveandDesign
This report presents facts and analysis on the banking habits, awareness, adoption and usage
patterns among mbanking users and nonusers. It identifies factors that will drive ontheground
success of mobile banking in India. To do so, we collect data on the barriers limiting adoption of
mobile banking amongst nonusers and also the triggers that led to adoption among current users.
We surveyed 1614 respondents during April and May 2012 across five different geographically
dispersed cities of India Delhi, Mumbai, Lucknow, Indore and Kochi.7 The initial screening only
selected respondents who were aware of mobile banking but may or may not have actually adopted
the service.8 Classified on the basis of socioeconomic class (SEC), the respondents were drawnfrom classes A1, A2, B1 and B2 on this 12grade scale which is based on education and number of
consumer durables owned. In India, these four SEC represent 11.8% of the general population and
25% of the urban population. 9 32% of the respondents were users of mobile banking. Detailed
information was collected on a variety of subjectsbanks patronized and banking habits, types of
financial transactions conducted, advantages and disadvantage of mobile banking, cellular usage
and demographic features.
Table1:Sampledistributionacrosscities
Delhi Indore Kochi Lucknow Mumbai TotalNonUserofM banking,Accountwitha
PrivateSectorBank102 101 100 102 102 507
NonUserofM banking,Accountwitha
PublicSectorBank119 122 105 113 139 598
UserofM banking,Accountwitha
PrivateSectorBank52 50 57 50 52 261
UserofM banking,AccountwithaPublic
SectorBank48 50 50 50 50 248
Total 321 323 312 315 343 1614
7Delhi and Mumbai are classified as Tier 1 cities and Kochi, Lucknow and Indore are classified as Tier 2 cities. Tier 1cities have a population of over 4 million while Tier 2 cities population is 1 million to 4 million.8Consumerswereinitiallysurveyedonthestreetbriefly.Outoftheserespondents,onlythoseconsumerswhowereawareof
MBanking were later interviewed facetoface in the CAPI (Computerassisted personal interviewing) center. The interview
workwasfullycontrolledandanypossibilityofleavingoutquestionswaseliminated.9This system is developed by the Media Research Users Council (MRUC) and the Market Research Society of India (MRSI).
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HowdoestheIndianconsumerbank?
As in the case of any consumer decision, the adoption and use of mobile banking depends heavily
on how attractive the alternative product is. For Indians with access to formal banking (the
segment of the population represented in this survey) brick and mortar branches are the
traditional mode of conducting banking transactions. We asked respondents, who all have
accounts in either public (49%) or private banks (51%), about their use and satisfaction with theseservices.
Most consumers physically visited a branch bank once a month or less. The most widely performed
branch banking activities revolve around viewing balances and transfer/depositing money. In the
preceding three months, 86% of users had transferred and deposited money and 82% had checked
their balance. A distant third was tasks paying insurance premiums (20%). There is much less
activity in more sophisticated tasks such as investing in shares (10%), credit card transaction (6%)
or mutual fund activity (4%).
Table2:Bankingactivities
Activitiesdoneinlast3months AllUsers M BankingusersMBankingnon
users
Base: 1614 509 1105
Payment of Bills 53% 38%
Transfer/deposit money 86% 86% 85%
Check/ View account balance 82% 90% 78%
Pay insurance premium 20% 26% 17%
Monitoring Deposits/ Fixed/ RDs 7% 7% 7%
Invest in share market 6% 7% 5%
Request cheque book 15% 17% 13%
View Mini Statements 15% 18% 13%
View Loan statements 8% 10% 6%
View Credit Card Statements 10% 10% 10%
Invest in MFs 4% 6% 3%
Stop payment on cheques 8% 11% 7%
Functionality to stop, change and delete payments /ECS Linking account for Auto Debit
4% 6% 3%
PIN provision 7% 11% 5%
Updating passbook 17% 12% 19%
There is some heterogeneity by SEC in the types of banking activities done at the physical branch,
more welloff and educated classes (SEC A) with presumably more advanced financial knowledge,
more resources and higher potential returns tend to do more complex financial transactions like
investing in share or mutual funds and credit card activity. However, the biggest difference across
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classes emerges on the dimension of howthese transactions take place. As Figure 2 shows, the
majority individuals in upper classes deposit or transfer money by some other medium rather than
physically visiting a branch. This proportion decreases as we go down the SEC scale.
Figure2: Physicalbranchastopmodefordeposits/transfers
This picture, which could be replicated for a variety of other bank services, shows that more
educated and welloff individuals are finding convenience in nontraditional banking modes like
ATM, internet, mobile or phone banking. Although not explicitly defined in the survey, many of the
higher classes reported using Other modes which most likely means they are using domestic help
or assistants to conduct banking activity. Even though bank branches are located moreconveniently for affluent households, their opportunity cost of time is also incentivizing them to
avoid crowded and timeconsuming bank branches.
Interestingly, the data also shows that internet or net banking has not caught on. Less than 25%
of customers use online services for banking. In many service categories, there is evidence of a
leapfrogging effect. Consumers are skipping over an intermediate banking mode such as internet
or phone banking and adopting the latest technology i.e. mobile banking. For example, amongst
those with access to mobile banking, 47% use branch banking for paying bills, 25% use internet
banking and 40% use mbanking.
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
SEC A1 SEC A2 SEC B1 SEC B2
%
respondents
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Figure3Modesofbankingfordifferenttasks
Branch ATM Net Mobile PhoneOther
Payment of Bills 47% 16% 28% 40% 1% 6%
Transfer/deposit money 44% 29% 27% 58% 1% 4%
Check/ View a/c balance 25% 60% 22% 66% 1% 3%
Pay insurance premium 32% 13% 31% 40% 3% 10%
Monitoring Deposits/ Fixed/ RDs 30% 22% 16% 16% 0 22%
Invest in share market 8% 8% 17% 36% 6% 31%
Request cheque book 44% 30% 3% 34% 2% 14%
View Mini Statements 24% 50% 21% 47% 3% 10%
View Loan statements 30% 23% 2% 25% 2% 30%
View Credit Card Statements 49% 24% 14% 16% 4% 16%
Invest in MFs 22% 22% 13% 34% 0% 22%
Stop payment on cheques 37% 7% 17% 54% 6% 15%
Functionality to stop, change anddelete payments / ECS
23% 19% 10% 35% 3% 29%
PIN provision 18% 45% 20% 45% 4% 13%
Passbook Update 93% 0 0 0 0 7
Issuesfacedintraditionalbanking
The movement away from brick and mortar banking is not surprising as there is considerable
dissatisfaction with traditional banking along several dimensions. Respondents complained about
the amount of time and energy they had to expend to merely commute to their bank. Most
consumers also complained about inordinate delays and harassment faced inside the bank. Usually
this physical branch banking involves waiting in serpentine queues and moving from one counter
to another to get even basic tasks accomplished.
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Figure3: Problemswithtraditionalbanking
Visiting a bank physically is timeconsuming and consumers said they are forced to defer
other important work to travel to a bank. In fact, more than 50% of the consumers ranked it as one
of their top three problems. Almost one of every three banking users needs to travel more than 2
kilometers to reach out to its nearest bank branch, with an average time of 1718 minutes. This
problem is marginally better in Tier 1 cities where average distances and travel times to bank
branches are shorter, but it remains daunting. Moreover, since lower SECs tend to live farther on
average from bank branches on average these problems are magnified for them. The opportunity
cost of time may be lower for lower SECs so that waiting in a queue is relatively less expensive for a
small shopkeeper than a high powered executive. But on net, the sluggish Indian banking
infrastructure inordinately burdens even lower middle class (SEC B) banking customers.
Respondents with account in private banks (both domestic and foreign) tend to be less displeased
with their banking experience in terms of customer service and delays that those with accounts inpublic sector institutions. Also, note that the differences may be higher that the numbers show
because customers of the respective types of banks are not similar i.e. private bank customers tend
to be more demanding as well. But the latter do better on the locational front, which is not
surprising as public sector banks often have the pick of choice locations available at subsidized
rates. Overall, however, the figures suggest that banks in India have not lived up the expectations of
their customers.
82
73
73
75
71
72
64
63
63
63
61
66
56
54
50
Time wasted travelling
Move from one counter to another one
Long queues
Unable to locate a bank branch while traveling
Inconvenient branch locations
Not accessible 24*7
Poor service
Unhelpful bank employees
Inadequate knowledge of the staff
Errors in recording transactions
No customised services
Cheque clearance not reflected on the same day
Poor bank infrastructure
Better services at other banks
Unreliable in past
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Figure3:%respondentsinstrongagreement
Holdaccountin
publicsector
bank
Holdaccount
inprivate
sectorbank
I end up wasting a lot oftime travelling to bank 82% 86%
I have to move from onecounter to another to getwork done
69% 65%
Bank employees/frontdesk executives at thebank are not willing tohelp me
56% 54%
It is important to keep in mind that problems of access and service exist on an even larger scale for
lower SECs (classifications CE) who are not included in the survey. Branches per capita in Indiastill remain among the lowest in the world and basic access remains a pervasive problem. In spite
of a big push by the government towards financial inclusion, less than 80% of the population has
access to formal sector lending representing fertile grounds for mobile banking to make inroads.
Awarenessandadoptionpatternsformobilebanking
Sourcesofawareness
By survey design, all respondents in the survey were aware of mobile banking. Television and
wordofmouth and internet are the top sources for awareness overall. Wordofmouth is
particularly effective for users.
Figure4:
Sources
of
awareness
for
mobile
banking
62
60
55
53
41
28
13
9
50
62
33
48
39
22
11
4
Friends/ family/ Colleagues using the service
Television
Internet
At the Bank branch
Newspapers/ Magazines /Other Print ads
Through the Mobile Service provider
Direct mailers
Call from a bank MBanking User MBanking NonUser
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More and more consumers rely on advice from friends, family and even strangers to make purchase
decisions in technology enabled banking services category especially Mbanking. The survey
reinforced what almost every businessperson knows, the best lead or referral is often the one that
comes straight from the moutha satisfied customers mouth, that is. A surprising fact given that
India has a bankled model for mobile banking, banks are not a more prominent source of
awareness. Only 5% of people heard about mbanking services through their bank. Additionally,mobile providers are not prominent source of information (23%). As we will see below when
discussing barriers to adoption, even though everyone in the survey is aware that banking through
a mobile device is possible, underawareness is the pressing problem. Potential users often do not
realize the extent to which mbanking can make banking more efficient and low cost. In these
embryonic stages of growth, banks and mobile providers must drive awareness about their
products. The finding that wordofmouth and peer use is so important to awareness implies that
reaching a critical mass of users will be vital to propelling mbanking forward. This fact also points
to low SEC groups, where adoption may be much below the critical threshold, as an important
target for marketers.
Triggersfor
adoption
When asked what attracted them to the service, the comfort and convenience of using their cell
phone emerged as the top reason for most users. As discussed earlier, cell phones have made deep
inroads among the Indian population. All segments of individuals and households have one and
are adept at using it. The idea of doing basic banking on such a familiar device is the immediate
attraction of mobile banking. The figure below shows these various triggers for adoption.
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Figure5: Triggersforadoption
As we see above, most respondents familiarity and comfort with their cellular device is impetus for
venturing into new applications such as mbanking. Top ranking given to several bankingcategories such as Usingamobileforbankingmakesbankinghasslefreeandeffortless, Icando
bankinganytime/anywhere(24/7banking), and Bankingthroughthemobilesavesalotoftime
also underscore the time and energy saving advantages that mbanking presents over traditional
banking. On the other the low ranking of certain categories like mobilebankinghasauserfriendly
interface and abilitytoconductfinancialtransactions highlight certain areas, specifically
improving usertechnologies and catering to smaller customers, that mbanking providers must
better to get more traction in the Indian context. The idea that having the right cell phone is a key
factor behind adoption is reinforced if we look at the barriers rather than triggers to adoption.
Barrierstoadoption
Overall, we can classify the hurdles that respondents stated as reasons for not using mobile phonesto four major categories lack of awareness, technology problems, security concerns and support
issues. Box 3 categorizes the specific statements evaluated in the survey under these four broad
areas.
88
88
85
84
84
84
83
83
83
80
I can do banking anytime/ anywhere
Banking through the mobile saves a lot of time
Using a mobile for banking makes banking hassle freeand effortless
Mobile banking has a user friendly interface
Ability to conduct financial transactions of evensmaller denominations
Consistent service experience, as human interventionis less
I started using Mobile Banking as most of my friendsand colleagues were also using it
I take keen interest in newer technologies
It involves lower cost as compared to the traditionaland older modes of banking
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Box3:M
Figure 6
reason i
mobilep
adoption
A
Not man
currently
I current
the need
Not as p
banking
It is expe
mobile fo
activities
Dont kn
Mbanki
versatile
Mbanki
complicat
ajorcatego
shows the p
not adopti
honeneeds
. Various su
areness
people I kno
use mbanking
ly dont have
pular as net
nsive to use
these
w much about
g services not
nough
g is too
ed to use
riesofbarr
ercentage o
g. Technolo
obecompat
port issues
Mobil
be com
bankin
At tim
mobile
Data t
too slo
erstomob
nonuser re
gy issues i.e.
bleformobi
and need fo
echnology
phone needs
patible for m
g operations
es there is no
network
ransmission is
on the mobil
lebanking
spondents t
attimesth
lebankingo
more cust
o
e
Anyo
detail
mobil
Poss
mba
in Int
Mb
and s
finan
adoption
at ranked a
reisnomo
erations a
mer suppor
Security
ne can misuse
s in case I lose
e
ibility of errors
king higher th
ernet banking
nking is not a
cure mode to
ial transaction
certain issu
ilenetwork
e the bigges
t come in se
my
my
in
an
afe
do
s
The
inte
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cont
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ack
the t
time
e as their to
vailable a
t hurdles to
ond.
Support
re is no huma
face or service
utive that you
act with questi
k of
owledgement
ransaction at
s
17
d
an
ons
of
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Figur
The data
Althoughsame hol
they wer
other ha
custome
banking,
potential
The resu
banking
gain acce
concerne
worry ab
more de
perspect
among lo
6:Respon
also shows
technologyds for awar
e also knew
d, SEC A re
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banks and t
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ts also sugg
lternatives,
ss to financi
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anding and
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hat differen
is the top coness as low
ess about t
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ese findings
lecom oper
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st that trust
lower SECs
al services.
rity issues.
and trust is
also be con
e easier to
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anksecurit
SECs attrib
cern for evr SECs were
e services a
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convey that
tors must n
geneous co
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re more wil
igher SECs
owever, thi
ues. As con
erned abou
nroll and e
.
31
164
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obilebank
ted differe
ryone, it caless likely t
d advantag
e worry ab
to ensure w
ot adopt a o
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are a sort
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SEC A SE
SEC A SE
obilecove
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t weights to
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s mobile ba
ut security
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esizefits
f luxury go
ny form of b
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ial inclusion
4
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nking had t
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and prolife
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anking that
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anks need
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18
rierto
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bile
ional
to
ot
e
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Figure6: Barrierstoadoption
Whoisusingmobilebankingtoday?
Mobile banking adopters tend to be relatively young, between the ages of 2635 years. Since the
survey was conducted in urban areas, illiteracy or only primary education was not common. Levels
of some college education were roughly the same among both users and nonusers, but mbanking
users tended to have more higher education and nonusers tended to have higher fraction of those
with only secondary education. More students were mbanking users as were working
professionally. Finally, mobile banking users belong to the high socioeconomic grades (A1 and A2).
70
67
67
66
65
63
62
61
59
59
58
58
5655
54
Incompatible phone
No mobile network at times
Not many people I know use
No human interface or service executive
No need
Internet banking more popular
Lack of acknowledgement in receiving transaction
Expensive to use mobile for this
Fear of losing phone and data
Don't know much about mbanking or how to use
Data transmission slow on mobile
Services not versatile enough
High possibility of errorsToo complicated to use
Not secure and safe
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Figure7:Characteristicsofusersandnonusers
MBankingUsers MBankingNonUsers
Base 509 1105
Age1825Years 44% 48%
2635yeas 40% 36%
3645 years 16% 14%
4655 years 3%
EducationalStatus
School 5 to 9 Years 1%
SSC \ HSC 6% 14%
Some College but not Graduate 20% 19%
Graduate \ Post Graduate : General 59% 58%
Graduate \ Post Graduate : Professional 15% 8%
OccupationalStatus
Student 25% 30%
Working Professionals 34% 29%
Businessman 24% 24%
Self Employed Professional 4% 3%
Housewife 8% 9%
SEC
A1 33% 20%
A2 36% 34%
B1 23% 29%
B2 9% 17%
IndividualIncome(MonthlyAverage,Rs.
thousands)35.1 26.9
HouseholdIncome(MonthlyAverage,Rs.thousands)
86.4 56.4
Mobile banking users also use more advanced phones.10
10Basic phone is one with minimal features like calling, sending text, receiving calls and may have radio withno option of camera, media player, videos or internet access. Multimedia phone can handle music picturesand videos. Smartphones allow users to store information, email, install programs, click pictures, storeimages and videos. These are phones where applications from a third party are accessible. See appendix forpictures.
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Figure8:%mobilebankingusersbySECandphonetype
Basic Multimedia Smartphone All
SECA1 0 41% 50% 43%
SECA2 0 27% 56% 33%
SECB1
0
27% 40% 27%
SECB2 0 17% 37% 19%
All 0 28% 49% 32%
Many of the entrylevel handsets that are prevalent in India do not support applications like
JAVA and internet browsing. They are browserunfriendly, and have monochromatic, low
resolution screens, which are designed to deliver voice rather than data. Additionally, 3G
technology also encourages adoption.
Figure9:%mobilebankingusersbySECandcelltechnology
2G 3G All
SECA1 42% 48% 43%
SECA2 32% 36% 32%
SECB1 24% 39% 26%
SECB2 20% 29% 21%
All 30% 41% 32%
Thus, the data suggests that lack of technology and mobile infrastructure remains a big hurdle to
adoption. However, the rapid 3G expansion and falling price of sleeker and more userfriendly
handsets should encourage the largescale adoption of sophisticated mobile banking applications.
Banks and mobile phone providers that are preparing to provide excellent mobile banking services
in the immediate future therefore have great potential for large scale and rapid adoption of mobile
banking services.
Frequencyandpatternsofuseamongmobilebankingusers
Moving beyond adoption, the survey gathered information on usage patterns of adopters. On
average, Mbanking users used mobile banking service .97 times a week. Most users used it once a
month, followed by a large group of weekly users. The frequency of usage increases with theexperience of the user. The most recent adopters of mobile banking use the service .80 times a
week while the most experienced ones average 1.24 times weekly. The first mobile banking service
that consumers tend to use is of the simplest kindchecking or viewing an account balance on
their phone. Forty six percent of respondents acknowledged this as their first type of mobile
banking transaction followed by 31% stating that transferring or depositing money was their first
one.
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TypesoftasksbySECandovertenureofuse
Over time, the nature of the tasks tends to become more complex. Banking transactions that
necessitate more trust and confidence in mobile banking as a medium also rise over the tenure of
use. New customers tend to simply check or view account balances more compared to experienced
users.
Figure10:%usersfirsttransactionusingmobilebanking
Figure 11 shows four different banking tasks that increase in complexity. Basic account balance
viewing is simply gathering information. Transferring of money requires a higher level of trust and
proficiency. Moving higher on the ladder of complexity, more involved decision is needed when
investing in mutual funds. And finally the task requiring the highest level of trust and complexity is
electronic clearing services (ECS) which moves fund among different bank accounts often
automatically. We see that users new to mbanking are most likely to transfer/deposit funds and
view balances but do much less of the other two tasks. Users who have been mbanking for two
years or more, spend relatively less time on the basic transactions.
46
32
10
2
2
2
1
1
1
1
1
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Similarly, higher SECs also conduct more sophisticated transactions. This is in part both because
higher SECs are more likely to have been longer users of mbanking but also because there is higher
demand for these services by them. Larger wealth and portfolio diversification elicits more need
for certain banking transactions. As banking needs but also time constraints increase, mobilebanking offers an efficient and hasslefree way to manage finances.
Hence while banks can acquire new customers relatively easily through simple transactions, they
should be prepared to provide higher quality and more complex services as customers become
more experienced if they would like to retain such customers in the face of competing banks
augmenting their mobile services. This is particularly important for the higher SEC customers
requiring more complex services.
Figure12: TypeoftransactionsbySEC
Viewing
BalanceTransfer/deposit Investing ECS
SECA1 62% 79% 25% 0%
SECA2 75% 64% 50% 54%
SECB1 61% 67% 18% 29%
SECB2 54% 47% 33% 22%
40%
79%
25%
0%
62%
47%
33%
22%
Viewing balance
Transfer/Deposit
Investing in MF
ECSLessthansixmonths 2+years
Figure11:Typeofmbankingtasksbylengthofadoption
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Postad
Mobile b
their pho
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insuranc
substantitradition
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Overall,
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anking is h
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31
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?
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24
use
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ng
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ing a
r
ng
m
if
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Future:
We have
richer, w
better sutaking in
househol
Table 5
and also
percenta
branch b
conditio
significa
mobile b
11Indepth
Figure14:
rawingfro
seen that us
ealthier and
ted to higho account t
ds face.
hows the m
among the s
ge point mo
anking is hi
on 3G tech
tly. Thus, o
nking use.1
analysis in Su
Not at all like
%Nonuse
mlowerso
ers of mobil
belong to hi
r socioecone technolog
banking ad
bset of resp
e mbankin
her among t
ology that i
ce technolo
hir and Tewari
y Not ver
slikelytoc
ioeconom
banking, b
her SECs.
omic strata.cal constrai
ption and u
ondents usi
users than
he former a
, eliminate
gy is accoun
(2012)
2
13
y likely S
18
onvert;ifg
icstrata
th in terms
his may lea
However, tts and ban
se across SE
g 3G techn
SEC B and t
wellthe r
espondents
ted for SECs
1 6
mewhat like
2 11
68
1
vensomeg
of greater a
to the conc
is would being alternat
C A (A1+A2)
logy. We se
at the relati
atio is 70%
with 2G, th
look much
39
y Very li
uidance(b
option and
lusion that
hasty conclives which p
and SEC B (
e that over S
ve amounts
more. How
se differenc
ore similar
ely Extre
ttom)
sage, tend t
obile banki
sion withooorer
B1+B2) ove
EC A has 13
of mbankin
ver, once w
s go down
in terms of
mely likely
25
o be
ng is
t
all
g to
e
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26
Table3:AdoptionanduseacrossSECs
SECA SECB Difference
%Mbankingusers
All
37%
24%
+13
with3G 42% 38% +4
Mobilephone/Branchuseratio
All ~1.7 1 +.7
with3G 1.7 1.4 +.3
As we have seen, one of the top constraints to adoption of mobile banking is the perception that the
users cell phone is not conducive to mobile banking. It is the leading reason (following
unavailability of a mobile network) that hinders mobile banking usage, both on the intensive and
extensive margins. Given that more 3G smartphone users are doing mobile banking, this problem isclosely tied to the predominant use of second generation basic or multimedia devices over third
generation smartphones. Even among mobile banking adopters, those with a 3G handset use their
cell phone for banking .38 times weekly compared to .28 times weekly by their 2G counterparts.
Third generation smartphones are still out of the price range of less affluent households. But
rapidly advancing technology is pushing prices down and removal of this technological constraint
for poorer household is imminent. Once this happens, mobile banking is likely to take off in a big
away.
On another dimension, poor banking infrastructure has created a pentup demand for mobile
banking. Although all survey respondents have a bank account, there is dissatisfaction across allSECs with these services among various dimensions especially in terms of travel time to banks,
inconvenient location of branches and amount of time spent in the branch. These issues are
magnified among lower SECs. They tend to express even more dissatisfaction about traditional a
banking method which is not surprising because they tend to live farther from banks and have
limited resources like domestic help, computers or phones to skip physical visits. On the supply
side, banks have not done a good job servicing these smaller customers. Richer consumers, on the
other hand have found that mobile banking an effective way to circumvent issues. This was
evidenced by the fact that mobile banking users, in spite of being wealthier with presumably better
access to banks, tend to physically use banks less. So the worse conditions in traditional banking for
less affluent households will attract them to mobile banking as a hasslefree way to do banking.
Thus, habits, preference for traditional banking or socioeconomic status are not likely to be
barriers to adoption and usage. The pull factor of cheap, new 3G handsets combined with the
push factor of lumbering traditional banking infrastructure are likely to result in rapid demand
for mobile banking across a variety of users.
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ConclusionMobile banking provides the promise of expanding both the quality of banking services and reach of
banking services in a large country like India in a costeffective manner. Using a consumer level
survey, we investigated consumer needs that triggers adoption and barriers than serve to limit
adoption of mobile banking. We also evaluated the satisfaction with mobile banking and how
adoption of mobile banking changes usage of traditional banking services.
Our key findings and takeaways are as follows: There is latent demand for mobile banking both
among the richer upper classes and poorer middle classes. The upper middle classes are drawn by
the possibility of superior service that saves time and provide anytime anywhere access to mobile
banking. The poorer middle classes who have limited access to traditional banking services find the
traditional alternative to be very poor, that mobile banking even at the most basic level are
attractive to them.
Richer SECs are also more concerned about issues of security and trust. As sophisticated customers,they have higher expectations to enter the mobile banking category, given their higher levels of
satisfaction with the closer alternative, traditional banking. Hence mobile banking service quality is
likely to be an important competitive weapon in attracting and retaining customers from higher
SECs in the future. We find users even from lower SECs graduate to using more sophisticated
transactions over time, and can become more demanding. So while immediate adoption among
lower SECs may be possible by simply providing them the option, their longterm retention,
especially as banks compete on the quality of services provided requires greater investment in ease
of use and quality of services.
Banks can do more to instill awareness of their mobile banking services to increase adoption.
Customers seem to learn more about mobile banking from friends and relatives than from thebanks themselves. Given that trust and word of mouth are likely to be useful in the adoption of
services, small referral incentives may accelerate the shift to mobile banking. Given the lower costs
of services through mobile banking, even when bank branches are present, it is in the banks
interest to encourage such adoption. Banks may also wish to partner with mobile phone service
providers to have apps installed on handsets that makes it easier to access banking services
through the phone. Given the fairly high levels of satisfaction with mobile banking services, relative
to traditional banking services, the shift may not only be favorable in terms of costs, but also in
terms of customer satisfaction and retention. Mobile banking might therefore truly be a winwin for
banks and customers.
Lower SECs have lower rates of adoption of mobile banking services. However closer inspection
reveals that this is not due to lack of interest and resistance to adopt new behaviors, but due to lack
of access to the complementary infrastructure of smart phones and 3G services. Given that prices of
smart phones are expected to plummet, and 3G penetration are likely to expand dramatically, there
is substantial latent demand waiting to be filled. Banks that are wellprepared to leverage and deal
with this potential explosion in demand are poised to gain substantial market share over the next
few years.
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Overall, mobile banking seems to be an idea whose time has come. Our research suggests that
supply side constraints are the bottlenecks to adoption; consumers are ready and waiting to adopt.
Given the expansion of higher bandwidth data services, and accelerated price drops of smart
phones, investments by banks in easytouse interfaces coupled with marketing of the services is
likely to have large scale payoffs for banks at the frontier.
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Appendix1:Somemobilebankingmodelsindevelopingcountries12
TableA1:Mobilebankingmodelsinemergingmarkets
ModelLead
Bank/telecom
Modeofaction
Philippines
SMART (bankled)GCASH(telecomled)
BancoDOro/SmartTelecomGlobe Telecom
Conventional ATM, POS are used through debitcard
Payment via value chain, account management
Banks sign up account Accounts managed by mobile network operators
(MNOs), banks have realtime access Core processing system lies with MNO, bank
holds delivery channel
KenyaMPesa(telecomled)
Safaricom Safaricom is mainly a payment provider for the
microfinance institution FAULU
Payments are conducted via airtime agents
SouthAfricaMTN (bankled)
Standard Bank,MTN
Clients open bank accounts through remote,interactive process
Mobile money starter packets are available viaMTN agents and bank branches
Core processing system lies with MNO, bankholds delivery channel
Indian Bankled
mCHECKAirtelState Bank of India,ICICI, Citibank
Mobile payment is restricted to bank accountholders, residents of India and transactions inIndian rupees
No interbank network available Banks can make multilateral agreements to
create mobile switches
Pakistan Bankled UBL
Account holder can initiate transaction viamobile with the help of an interactive voiceresponse
Conventional ATM, POS are used as deliverychannel
12Another useful resource is the the Consultative Group to Assist the Poor (CGAP) report BranchlessBanking2010: WhosServed?AtWhatPrice?WhatsNext? provides data and description of variousmobile banking and mobile payment systems in developing nations. It is available at:
http://www.cgap.org/gm/document1.9.47614/FN66_Rev1.pdf
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Q2 Q.C[MA][SA]
RQ AC CB AC RQ BC CB BC RQ
TBC
CB TBC RQ VC CB VC RQ
SCR
CB SCR
(R1) D.V ( SIGN./DATE) 01 02 03 04 05 06 07 08 09 10
(R2) OC /OE / SOE ( SIGN./DATE) 01 02 03 04 05 06 07 08 09 10
(R3) OM/SM ( SIGN./DATE) 01 02 03 04 05 06 07 08 09 10
Q3a DateofInterview[dd/mm/yy]
Pleaserecordusingtheshortdateformat(dd/mm/yy).Forexample,ifthedateis21December2005,record
as211205
Q3b RECORDTIMEINTERVIEWSTARTED/ENDED
Pleaserecordusing24hourformat.Forexample,ifthetimeis2:47pm,recordas1447
Q3c TimeEnded(24hourformat)
Q3d InterviewerName
Q3e InterviewerIDNumber
Q3a Q3b Q3c Q3d Q3e
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inyourhouseholdworksinanyofthefollowingtypesoforganization.[SA]
Banks 1 CLOSE
Financial Institutions 2 CLOSE
TelecommunicationsMobile Service Provider Company/ Handset Manufacturers 3 CLOSE
Market research 4 CLOSE
Advertising or PR agency 5CLOSE
Media/Radio/ Newspaper/Magazine 6 CLOSE
Manufacturer/ Wholesaler/Retailer of consumer electronics like TV, refrigerator, etc 7
Company manufacturing soap/toiletries ________________ 8
Government institutions 9
None of the above 10
Q7 ASKALL
Haveyoubeeninterviewedbyanymarketresearchagencyinthepast6
months?[SA]
Code
Route
Yes 1 CLOSE
No 2
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Screener
(Administeredtoalltherespondents)
Q1. SHOWCARD
ASKALL
Canyoupleasetakealookatthiscardandtellmethehighestlevelofeducation
oftheChiefWageEarnerinyourhousehold?ByChiefWageEarner,Imeanthe
personwhocontributesthemaximumtothemonthlyhouseholdincome. [SA]
Code
Route
Illiterate 1
Literate but no formal schooling 2
SchoolUpto4 years 3
School5 to 9 years 4
SSC/ HSC 5
Some College (includes a Diploma) but not Grad 6
Graduate/ Post Graduate: General 7
Graduate/ Post Graduate: Professional 8
Q2.a SHOWCARD
ASKALL
Canyoupleasetakealookatthiscardandtellmetheoccupationalpositionof
theChiefWageEarnerinyourhousehold?ByChiefWageEarner,Imeanthe
personwhocontributesthemaximumtothemonthlyhouseholdincome.
PROBEFORDESIGNATIONORLEVEL.
[SA]
Code
Route
Unskilled worker 01
Skilled worker 02
Petty trader 03
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Shop owner 04
Businessman/Industrialist with No employees 05
Businessman/Industrialist with 19 employees 06
Businessman/Industrialist with 10+ employees 07
SelfEmployed Professional 08
Clerical / Salesman 09
Supervisory Level 10
Officer/Executive Junior 11
Officer/Executive Middle / Senior 12
EducationIlliterate
School
Upto 4th
School
5th 9thSSC / HSC
Some College
(includes a
Diploma) but not
Grad
raduate /
post
graduate
general
Graduate /
gradua
professio
Occupation 1 2 3 4 5 6 7
Unskilled 1 E2 E2 E1 D D D D
Skilled worker 2 E2 E1 D C C B2 B2
Petty trader 3 E2 D D C C B2 B2
Shop owner 4 D D C B2 B1 A2 A2Business / industlist with
number of employees
None 5 D C B2 B1 A2 A2 A1
1 9 6 C B2 B2 B1 A2 A1 A1
10 + 7 B1 B1 A2 A2 A1 A1 A1
Self employed
professional8 D D D B2 B1 A2 A1
Clerical/ salesman 9 D D D C B2 B1 B1
Supervisory level A D D C C B2 B1 A2
Off / exec junior B C C C B2 B1 A2 A2
Off/ exec mid/senior C B1 B1 B1 B1 A2 A1 A1
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Q2b CODESECQ1*Q2a [SA] Code
Route
SEC A1 1
SEC A2 2
SEC B1 3
SEC B2 4
SEC C 5 CLOSE
SEC D 6 CLOSE
SEC E1 7 CLOSE
SEC E2 8 CLOSE
RECORDRESPONSESFORQ3TOQ7INTHEGRIDBELOW
Q3.Canyoupleasetellmeyourageincompletedyears
Q4.RecordGender
Q5.Doyouholdasavingsbankaccount?SA
Q6.Doyouownamobilephoneservice?HereIamreferringtonotonlyowningamobilephonebut
alsoan
active
connection?
SA
Q7.IFCODEDYESINQ6,ASK,is your mobile phone a basic phone, Multimedia phone or Smartphone.IFTHE
RESPONDENTOWNSMORETHANONEPHONE,ASKFORTHEONEHEUSESMOSTOFTEN.SA
Interviewershouldexplainwhateachtypeofphonemeans:
ByBasicphoneI mean a phone with minimal features like calling, sending text SMS, receiving calls, may
have a radio service with no option of camera, media player, videos or internet access.
Multimediaphoneis the one that can handle music, pictures and videos.
Smartphonesallow users to store information, email, install programs, click pictures, store images &
videos. These are the phones where applications from third party are accessible. eg. Facebook
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Name
Q3. Age Q4. Gender Q5. BankA/cQ6.Cellphone Q7.Typeofcellphone
Male Female Yes No Yes No Basic Multimedia Smart
1 2 1 2 1 2 1 2 3
CONTINUEONLYIF:
1. SECABHOUSEHOLD(CODED1TO4INQ2b)
2. RESPONDENTAGEBETWEEN1855YEARS(REFERQ3)
3. BANKACCOUNTHOLDER(CODEDYESI.E.1INQ5)
Q8.
Q9. a
Q9.b
Youmentionedthatyouhaveasavingsbankaccount.Inwhichall
banksdoyouhaveasavingsaccount?[MA]
IFCODEDMORETHANONEOPTIONINQ8,ASKQ9a,ELSECODETHE
SAMEBANKASCODEDINQ8UNDERQ9a:Ofallthebanksyouhave
anaccountin,whichisyourmainsavingsbankaccount;bymainI
meanthebankwithwhichyoudothemaximumnumberof
transactions?[SA]
IFCODEDMORETHANTWOOPTIONSINQ8,ASKQ9b:Andwhichof
theseistheotheraccountwithwhichyoudothenexthighestnumber
oftransactions?[SA]
Q8.Bank
accounts
owned
Q9.a.M
ain
Bank
account
Q9b.Oth
Bank
accoun
PUBLICSECTORBANK
Allahabad Bank 1 1 1
Andhra Bank 2 2 2
Bank of Baroda 3 3 3
Bank of India 4 4 4
Bank of Maharashtra 5 5 5
Canara Bank 6 6 6
Central Bank of India 7 7 7
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Corporation Bank 8 8 8
Dena Bank 9 9 9
IDBI Bank 10 10 10
Indian Bank 11 11 11
Indian Overseas Bank 12 12 12
Oriental Bank of Commerce 13 13 13
Punjab & Sind Bank 14 14 14
Punjab National Bank 15 15 15
State Bank of India 16 16 16
State Bank of Bikaner & Jaipur 17 17 17
State Bank of Hyderabad 18 18 18
State Bank of Mysore 19 19 19
State Bank of Patiala 20 20 20
State Bank of Travancore 21 21 21
Syndicate Bank 22 22 22
UCO Bank 23 23 23
Union Bank of India 24 24 24
United Bank of India 25 25 25
Vijaya Banka 26 26 26
PRIVATESECTORBANK
American Express Bank 27 27 27
Axis Bank (Formerly UTI Bank) 28 28 28
Barclays Bank PLC 29 29 29
BNP Paribas 30 30 30
Citibank N.A. 31 31 31
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City Union Bank 32 32 32
DBS Bank 33 33 33
Deutsche Bank AG 34 34 34
Dhanlaxmi Bank 35 35 35
Federal Bank 36 36 36
HDFC 37 37 37
HSBC 38 38 38
ICICI Bank 39 39 39
IndusInd Bank 40 40 40
ING Vysya Bank 41 41 41
Jammu & Kashmir Bank 42 42 42
JPMorgan Chase Bank 43 43 43
Karnataka Bank 44 44 44
Karur Vysya Bank 45 45 45
Kotak Mahindra Bank 46 46 46
Lakshmi Vilas Bank 47 47 47
Royal Bank of Scotland 48 48 48
South Indian Bank 49 49 49
Standard Chartered Bank 50 50 50
Tamilnad Mercantile Bank 51 51 51
UBS 52 52 52
Yes bank 53 53 53
Others Please Specify____________________________ 99 99 99
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Q10.NowIwillshowyouafewconcepts.Iwouldliketoknowifyouhaveheardofthesebefore.
Q10.a.MBANKINGSHOWCARD:mBankingorMobileBankingisatermusedtodefinebanking
overthemobilephonewhichwouldincludeusingtheinternetbrowseronthemobilephoneto
accessthebankwebsiteandthendoanyofthefinancialactivitieslikepayingutilitybills,
transferringmoney,payinganinsurancepremium,etc.OR,usingamobileApplicationforeasy
andsimple
access
to
the
Bank
Mobile
website
to
perform
financial
activities
like
viewing
the
bank
balance,transferringmoney,etc.
AwareofmBanking Code Route
Yes 1 Go to Q10b
No 2 CLOSE
10bNowIwillreadoutafewfinancialactivitiesthatweusuallydoinourdaytodaylife.Iwouldlike
toknow
which
of
these
have
you
heard
are
possible
through
your
mobile
phone
or
through
M
Banking.READOUTEACHACTIVITYONEBYONEANDCODETHEONESTHERESPONDENTISAWARE
OF[MA]
Q10b.Awareofm
banking
(R1) Deposit your telephone/mobile bills, utility bills like electricity bill 01
(R2) Transfer/deposit money 02
(R3) Check/ View account balance 03
(R4) Pay insurance premium 04
(R5) Monitoring Deposits/ Fixed/ Recurring Deposits Short & Long term 05
(R6) Invest in share market 06
(R7) Request cheque book 07
(R8) View Last few transactions/ Mini Statements 08
(R9) View Loan statements 09
(R10) View Credit Card Statements 10
(R11) Invest in Mutual funds 11
(R12) Stop payment on cheques 12
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(R13)Functionality to stop, change and delete payments / ECSLinking account for
Auto Debit
13
(R14) PIN provision Change of PIN/ Password 14
(R15) None of the above 15
TERMINATETHEINTERVIEWIFTHERESPONDENTISNOTAWAREOFANYTHEACTIVITIESINQ10b,
I.E.IFCODED15,NONEOFTHEABOVEINQ10b
Now,Iwouldliketoexposeanotherconcepttoyou.Pleasetellmeifyouhaveheardofthisbefore?
Q11.a.INTERNETBANKINGSHOWCARD:Internetbankingallowscustomersofabanktoconduct
financialtransactionsonasecurewebsiteoperatedbythebank.Toaccessabanksonlinebanking
facility,acustomermusthaveInternetaccessandshouldberegisteredwiththebankingin