Mobile Banking in India Final

7/28/2019 Mobile Banking in India Final

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Mobile Banking in India: Present Status and Future Perspectives

Prof. (Dr.) S L Gupta & Dr. Arun Mittal

Prof. (Dr.) S L Gupta Dr. Arun MittalProfessor, Birla Institute of Technology Asst. Professor, Birla Institute of Technology

(Deemed University), Noida Campus (Deemed University), Noida CampusA-7, Sector-1, NOIDA A-7, Sector-1, NOIDA

E-Mail:[email protected] E-Mail:[email protected](M) 09811230453 (M) 09818057205

Mobile banking simply means performing banking transactions throughmobile. Presently it is enjoying rapid growth. This has raised certain

challenges such as security, reliability and consistency in services to meetcustomers expectations. Instead of this the future of mobile banks looks

bright due to the continuous increase in customers awareness andeffectiveness of banking and regulatory system.

Introduction:

Mobile banking is one of the three major pillars (with ATMs and Internet Banking) of

revolutionary improvement in the quality of service delivery of banks. Mobile banking is simplyperforming banking transactions such as balance checks, account transactions, payments with the

help of mobile phone. It can also be understood as availing banking and financial services with thehelp of mobile telecommunication device. The scope of services offered in mobile banking may

include getting account information, transferring funds, sending checkbook request managingdeposits, taking quick check of transactions and so on. Mobile banking today is most often

performed by SMS (Short Message Service) so that is also known as SMS banking.

The welcome of this type of service is very much expected by youth. Indian youth has taken it asa fun of convenience. However mobile banking in India has been used by others also. The very

feature of mobile banking Anytime-Anywhere Banking is making it very popular among all thecategories. Using mobile phones is a very common practice. Commercial banks are exploring this

opportunity to make their services more convenient for their customers. Growing number ofmobile subscribers in the country is the most valuable support behind the success of mobile
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banking. A wide range of services is provided by banks with the help of mobile banking services.Following table gives a comprehensive list of mobile banking services:

Services provided through mobile banking:

Account Information Payments & Transfers Supporting ServicesTransactions statement Micro-payment handling Request for credit,

Account history Mobile recharging Checkbook requests

Transaction alerts Commercial payment Locating ATMs

Monitoring of deposits Bill payment/ Other

paymentsOther Services

Loan statements Investments Services General information

Mutual funds statements Portfolio management Loyalty-related information

Check Status/stopping

payment

Stock quotes and

Personalised alerts

Various promotional and

other offers and services

Present Status:

Mobile banking is enjoying a rapid growth in India. It has successfully crossed the introductionstage. The service is being channelised from metropolitan cities to urban areas and semi urban

areas and then to the rural areas. About Indian banks customers a number of studies have revealedthe fact that people select the banks whose branches are near to their homes and workplaces.

Further in selection of the banks behaviour of employees has also been considered an importantaspect. Both the problems can be solved with the help of mobile banking. Now this is the time

which supports smart work not hard. The growth of mobile banking in India is primarily forced byconvenience and promptness. Indian banking industry has already witnessed two more revolutions

in the improvement in the quality of services delivery as Internet banking and ATMs. If we studyall three innovations simultaneously we see that mobile banking has it own unique characteristics.

Mobile banking is different from internet banking and ATMs in consideration of too many factors.Internet awareness and usage is not as common as the usage of mobile phones. Further (excluding

internet on mobile) it requires particular devices such as a desktop or a laptop. Doing internetbanking on cyber caf is not safe and is suggested to be prohibited by all banks for security

reasons because the cyber caf network may store confidential information of the customers bankaccount, further customers have to pay something to use internet. Moreover if you dont have the

facility with yourself only it is not possible to do anytime banking with internet. These alldifficulties have been solved by mobile banking. Huge growth in mobile phones, affordability of

handsets and well designed rates and tariffs by telecommunication companies have made mobilephone available for everybody. Indeed the same has become life blood for mobile banking in

India.If mobile banking is compared with ATMs, the differences are mixed. Mobile banking cannot

become the alternative of cash withdrawal which is done through ATMs but it can facilitate incertain payments and other transactions. This is very much true that ATMs are location specific

but mobile banking is not. Further you may face a queue at the peak times in front of the ATMs.

Why Mobile Banking?


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Mobile banking has lot of advantages for both, service providers and those who avail services. It

has really become multi beneficial. Banks do not require much investment and they need not tomodify their existing infrastructure. Banks can send the message in fewer efforts to huge number

of people. Mobile banking also helps banks to make good relations with their customers. In

mobile banking the banks get valuable database of the customers which helps them in effectivecustomer relationship management practices. It facilitates in quick feedback and help in customerretention and customer loyalty. Mobile phone provides a way to reach out to people in isolated

areas. When banks have database of their customers they can use SMS advertising to giveinformation about their services to their existing customers. This also solves the purpose of

promotion and may also help in communicating new services. Customers enjoy anytime anywherebanking with the help of their mobiles. They need not to stand in the queues or to face the

employees whom they dont want to face or need not be worried if the branch is not at convenientlocation. As mobile banking is cost effective for bankers it is cost effective for customers also.

The information can also be stored automatically in mobile as a proof in the form of SMS whether

sent or received.

Supporting Factors:

The popularity and effectiveness of mobile banking mainly depends on the banking system in the

country and their connection with regulatory and supporting system. There are lots of factorswhich support mobile banking in India. First of all being so much beneficial, banks are taking

initiative and encouraging people to register and use mobile banking services. Customers are alsoadopting the same because they are also getting lots of benefits. Regulatory system of the country

is also serious about the success of this concept. RBI is going to frame formal guidelines formobile banking very soon so that it can also be streamlined like all other services. Speedy growth

in mobile customers and strong IT services are also big supports behind the success of mobilebanking in India.

Issues and Challenges:

The biggest challenge for mobile banking services is security. In the past surveys the same has

been generalized as the biggest challenges for internet banking also. Security here simply meansthat the no body else can know the confidential information of customers bank account. All

mandatory alerts are to be sent to the customers in time and the complete system should be verymuch disciplined and robust. There should not be any chance for the information leakage. This is

a matter of fact that users have fewer chances to make mistakes while using mobile banking. If awrong transaction is done by mistake the options should be there to revert it back. Anyhow lot of

things concerned with security will take time to be recognized. In the services which are offinancial nature if people once loose confidence it is very difficult to convince them again for the

same. India lives in villages and semi urban areas they require more attention towards the concept.Mobile banking education should become a part of the promotional campaigns. The awareness of

all the aspects concerned will not only help the customers to use this service but they willsignificantly reduce number of complaints and will increase the registered users. Another

challenge is the consistency in the standards of service quality. The banks have to maintain their


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services and the quality thereof. It has been seen that when things are not implemented in aregular form with same standards they fail forever.

Future perspective:

Success is the sweetest thing in this world. It has a simple formula Do your best and people mustlike it. In mobile banking the service providers must think that they have to give their bestservices and per customers requirements and convenience. The future of mobile banking depends

on efforts of all concerned parties the service providers, service facilitators, regulatory system andcustomers. The awareness of people, security guidelines by RBI and efforts of banks will surely

shape the robust framework for mobile banking in India. The prime concern of banks and RBImust be on the awareness of people, practical training and required security of the transactions

made through mobile banking. Banks must organise conferences and a series of interactiveseminars on Mobile Banking issues such as security, reliability and regulations. The RBI and

banks must publish relevant material related to the issues of mobile banking. These all efforts will

certainly make the path for successful mobile banking in the country.

Conclusion:

The banking business has always been different than others businesses because it comes in the

services industry and financial services category. Every body making transactions in finance ismore conscious about the security of his money. Many times it has been seen that when a

customer once cheated in the case of financial matters he looses his belief forever in thatparticular system and never does the same again. The banks, regulatory authorities and other

organizations must try their level best to make mobile banking system as much secure as they can.It should be mistake less and provide maximum security and reliability to the users. The

connectivity with innovative modes of transaction in banking like ATMs, Internet Banking andmobile banking always requires lot of attentions from the side of service providers because a

small interruption in the system may spread a very bad word of mouth and fear to the customers.The time has come that banks must scale-up the mobile banking infrastructure to handle

exponential growth of the customer base. Mobile banking is anytime and anywhere, so that banksneed to ensure that their systems remain ready for the same. As customers will find mobile

banking more and more useful, their expectations will increase. If the banks will be unable tomeet the performance and they may lose customer confidence.

Mobile Banking in India Final

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