Future Of Mobile Banking In India Marketing Essay


A term used for executing balance cheques, account minutess, payments etc. via a nomadic device such as aA mobile phone. Mobile banking today ( 2007 ) is most frequently performed viaA SMSA or theA Mobile InternetA but can besides utilize particular plans called clients downloaded to the nomadic device.

It besides known as M-Banking, SMS Banking

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Mobile Banking Conceptual Model

This theoretical account Mobile Banking can be said to dwell of three inter-related constructs:

Mobile Accounting

Mobile Brokerage

Mobile Financial Information Services

Most services in the classs designatedA AccountingA andA BrokerageA are transaction-based. The non-transaction-based services of an informational nature are nevertheless indispensable for carry oning minutess – for case, balance enquiries might be needed before perpetrating a money remittal. The accounting and securities firm services are hence offered constantly in combination with information services. Information services, on the other manus, may be offered as an independent faculty.

Mobile phone banking may besides be used to assist in concern state of affairss

Tendencies in Mobile Banking

The coming of theA InternetA has enabled new ways to carry on banking concern, ensuing in the creative activity of new establishments, such as on-line Bankss, on-line agents and wealth directors. Such establishments still account for a bantam per centum of the industry

Over the last few old ages, the Mobile and radio market has been one of the fastest turning markets in the universe and it is still turning at a rapid gait. Harmonizing to theA GSM Association andA Ovum, the figure of nomadic endorsers exceeded 2 billion in September 2005, and now exceeds 2.5 billion ( of which more than 2 billion areA GSM )

With nomadic engineering, Bankss can offer services to their clients such as making financess transfer while going, having on-line updates of stock monetary value or even performingA stock trading while being stuck in traffic.A Smartphone’sA andA 3GA connectivity provide some capablenesss that older text message-only phones do non.

Harmonizing to a survey by fiscal consultancyA Celent, 35 % ofA online bankingA families will be utilizing nomadic banking by 2010, up from less than 1 % today. Upwards of 70 % of bank centre call volume is projected to come from nomadic phones. Mobile banking will finally let users to do payments at the physicalA point of sale. “ MobileA contactless payments ” will do up 10 % of the contactless market by 2010.A Another survey from 2010 byA Berg InsightA forecasts that the figure of nomadic banking users in the US will turn from 12 million in 2009 to 86 million in 2015. The same survey besides predicts that the European market will turn from 7 million nomadic banking users in 2009 to 115 million users in 2015

Mobile Banking Business Model

A broad spectrum of Mobile/branchless banking theoretical accounts is germinating. However, no affair what concern theoretical account, if nomadic banking is being used to pull low-income populations in frequently rural locations, the concern theoretical account will depend onA banking agents, i.e. , retail or postal mercantile establishments that process fiscal minutess on behalf telephone company or Bankss. TheA banking agentA is an of import portion of the nomadic banking concern theoretical account since client attention, service quality, and hard currency direction will depend on them. Many Telco will work through their local airtime resellers. However, Bankss in Colombia, Brazil, Peru, and other markets use pharmaceuticss, bakeshops, etc.

These theoretical accounts differ chiefly on the inquiry that who will set up the relationship ( history gap, sedimentation pickings, imparting etc. ) to the terminal client, the Bank or the Non-Bank/Telecommunication Company ( Telco ) . Another difference lies in the nature of bureau understanding between bank and the Non-Bank. Models of branchless banking can be classified into three wide classs – Bank Focused, Bank-Led and Nonbank-Led.

Bank-focused theoretical account

The bank-focused theoretical account emerges when a traditional bank uses non-traditional low-priced bringing channels to supply banking services to its bing clients. Examples range from usage of automatic Teller machinesA ( ATMs ) to internet banking or nomadic phone banking to supply certain limited banking services to Bankss ‘ clients. This theoretical account is linear in nature and may be seen as a modest extension of conventional branch-based banking.

Bank-led theoretical account

The bank-led theoretical account offers a distinguishable option to conventional branch-based banking in that client conducts fiscal minutess at a whole scope of retail agents ( or through nomadic phone ) alternatively of at bank subdivisions or through bank employees. This theoretical account promises the possible to well increase the fiscal services outreach by utilizing a different bringing channel ( retailers/ mobile phones ) , a different trade spouse ( Telco / concatenation shop ) holding experience and mark market distinct from traditional Bankss, and may be significantly cheaper than the bank-based options. The bank-led theoretical account may be implemented by either utilizing letter writer agreements or by making a JV between Bank and Telco/non-bank. In this theoretical account client history relationship rests with the bank

Non-bank-led theoretical account

The non-bank-led theoretical account is where a bank does non come into the image ( except perchance as a safe-keeper of excess financess ) and the non-bank ( e.g. Telco ) performs all the maps

Mobile Banking Servicess

Mobile banking can offer services such as the followers:

Account Information

Mini-statements and checking of history history

Alerts on history activity or passing of set thresholds

Monitoring of term sedimentations

Access to loan statements

Entree to tease statements

Common fundsA / equity statements

Insurance policy direction

Pension program direction

Status on check, stop payment on check

Ordering cheque books

Balance checking in the history

Recent minutess

Due day of the month of payment ( functionality for halt, alteration and deleting of payments )

PIN proviso, Change of PIN and reminder over the Internet

Blocking of ( lost, stolen ) cards

Payments, Deposits, Withdrawals, and Transportations

Domestic and international fund transportations

Micro-payment handling

Mobile reloading

Commercial payment processing

Bill payment processing

Peer to Peer payments

Withdrawal atA banking agent

Deposit atA banking agent

Particularly for clients in distant locations, it will be of import to assist them lodge and retreat financess at banking agents, i.e. , retail and postal mercantile establishments that turn hard currency into electronic financess and frailty versa. The feasibleness of such banking agents depends on local ordinance which enables retail mercantile establishments to take sedimentations or non.

A specific sequence ofA SMSA messages will enable the system to verify if the client has sufficient financess in his or her billfold and authorise a sedimentation or withdrawal dealing at the agent. When lodging money, the merchandiser receives hard currency and the system credits the client ‘s bank history or nomadic billfold. In the same manner the client can besides retreat money at the merchandiser: through interchanging samariums to supply mandate, the merchandiser hands the client hard currency and debits the merchandiser ‘s history.


Portfolio direction services

Real-time stock quotation marks

Personalized qui vives and presentments on security monetary values

Mobile banking


Status of petitions for recognition, including mortgage blessing, and insurance coverage

Check ( check ) book and card petitions

Exchange of informations messages and electronic mail, including ailment entry and trailing

ATM Location

A A A Bank Account

Credit Card



Other Servicess

Fundss Transfer*

Balance Detailss

Keeping Question

Probationary Income Tax Certificate

Locate Branch

Bill Payment+

Last Payment Details

Transaction Status

Concluding Income Tax Certificate

Locate ATM

Balance Enquiry

Payment Due Date

Bill Enquiry

Reset Letter

Telephone Banking Number

Last 5 Minutess

Reward Point Status

ISIN Enquiry

Rescheduled Letter

Prepaid Mobile Recharge*

Cheque Book Request

Loan Agreement Copy

Apply for Bank Merchandises

Stop Cheque Request

Status of Service Request Raised

Cheque Status Enquiry

Beginnings: Banking operation Guidelines for Mobile Banking

Mobile Banking Architecture

Core Banking System

EFT Channel Switch


Mobile Banking



Standard atmosphere

Technologies Behind Mobile Banking

Technically talking most of these services can be deployed utilizing more than one channel. Soon, Mobile Banking is being deployed utilizing nomadic applications developed on one of the undermentioned four channels.

1. IVR ( Synergistic Voice Response )

2. SMS ( Short Messaging Service )

3. WAP ( Wireless Access Protocol )

4. Standalone Mobile Application Clients

SMS Architecture WAP Architecture

Working of Mobile Banking

Beginnings: www.infogile.com

Mobile Banking Schemes in Market Segmentation

Choosing the right engineering for your market will, foremost, necessitate some work to understand the

market ‘s engineering environment. Some cardinal elements are:

Who is your mark market and which nomadic devices do they hold?

What sort of user experience and value proposition would be sufficient/appropriate in

serving your mark market?

What are the carrier channel costs related to this dealing and is it low-cost to your

mark market?

Does your mark market have entree to the carrier channel?

Are you able to acquire the application onto your consumer ‘s phone or French telephone without

necessitating the consumer to hold an in-depth cognition of the engineering?

Is the carrier channel selected secure sufficiency for the hazard profile of the client you are

aiming? Is it unafraid plenty to protect the bank from any repute hazard if security is

breached? Are there sufficient agencies to pull off the hazard around the carrier channel


Does the channel comply with any fiscal processing regulations and ordinances associating to:

the method of processing ; hallmark of the client ; transportation of informations ; and degrees of

encoding, yet still present on the concern demand?

Future Mobile banking in India – Percept and Statisticss

Over the last few old ages, the Mobile and radio market has been one of the fastest turning markets in the universe and it is still turning at a rapid gait. Mobile phones have become an indispensable communicating tool for about every person. Advent of M-Commerce has managed to take nomadic VAS to following degree, adding enormous value to telecommunication industry. Mobile banking which is an built-in portion of M-Commerce has become really popular among nomadic users of all time since its being in 2007. It creates new, convenient communicating and fast fiscal transactional channel for Mobile users which is accessible from anyplace, anytime.A

Checking history information, balance available, credit/debit card information, check position, puting qui vives, payment reminders, turn uping ATMs and bank subdivisions, accessing mini statement, accessing loan and equity statements, insurance policy direction, puting orders for check books etc via nomadic phones are some of the services offered in nomadic banking. With multiple entree channels such as SMS, downloadable client, nomadic Internet ( WAP ) Mobile banking is promoting nomadic users more to research the service.

Mobile banking services – penetrations and studies

Based on informations gathered in April 2009 for Feb/March Mobile banking urban Indian clients look intoing history balance is the most often cited ground for utilizing nomadic banking. 40 million Urban Indians used their nomadic phones to look into their bank history balances followed by sing last three minutess. ICICI bank continues to keep its leading extending in nomadic infinite, 42 % of all nomadic banking users bank with ICICI, followed by HDFC ( 25.3 % ) .

Mobile banking study: A ” Most popular services and income profile ” A ( Two month ended March 2009, Urban Indian Mobile Phone Users ) . By Critical Anaytics Team

hypertext transfer protocol: //www.telecomindiaonline.com/images/most-popular-mobile-banking-statistics.jpg

Figure -1 Statistics on most popular Mobile banking services

Filtering the information farther to understand which income groups in urban India usage Mobile banking more. As depicted in the chart below, nomadic banking is most used by endorsers falling in Rs. 1 Lakh to Rs. 2.99 Lakhs income bracket followed by less than Rs 1 Lakh income bracket. Therefore it is observed, nomadic banking is more popular among low income group of Mobile users than higher income group of nomadic users.

hypertext transfer protocol: //www.telecomindiaonline.com/images/mobile-banking-users-income-profile.jpg

Figure – 2 Mobile banking users – Income profile

The Future of Mobile Banking

It has been some clip since the first nomadic payment solution was prototyped during the late 1990 ‘s. It would be right to state that following twelvemonth nomadic payments and banking have been around for a decennary. Many challenges were overcome and many deployments made. During the past 10 old ages many errors were made and a batch of money has been invested ( and lost! ) to develop the industry to the current phase.

Mobile banking has come of age. The small babe is without uncertainty a adolescent today and many Bankss and nomadic operators have made serious committednesss to doing nomadic banking existent. Mobile banking moved from the rebel periphery to chief watercourse relevancy with many success narratives and instance surveies. The inquiry is, what can we anticipate in the hereafter… following twelvemonth and ( if it is possible to look that far in the hereafter ) , the following 10 old ages? This is some of the things that I believe will happen:

In the short term, it is my outlook that the following would go on

I expect that we will see a monolithic addition in the figure of endorsers to mobile banking functionality. The incursion of endorsers are already rather impressive, particularly in state like India, but this public presentation will be replicated in other states as operators and Bankss get better at the merchandises and addition investings in selling and services.

As the Numberss increase towards the terminal of the twelvemonth, we will see an exponential addition in dealing volumes, peculiarly phone to phone payments. The most of import accelerator for this will be the cash-in and cash-out installations created. With an addition in endorsers, increased value of hard currency held in values, minutess will follow.

I do non anticipate any mainstream criterions emerging as different providers offer different solutions, but I expect an addition in the ability to inter-connect different solutions with one another. Even today it is possible to direct money from a Western Union system to a G-Cash system. I expect more of these inter-connections to be built.

Most mainstream ( relevant ) Bankss would take part in nomadic banking. At a phase non to far in the hereafter all Bankss will recognize that they will hold to put in this engineering in order to remain relevant and they will.

In the longer term, I expect some of the following to happen

Because nomadic banking holds the promise of highly unafraid hallmark ( existent execution of digital signatures ) , I expect the outgrowth of dedicated designation devices. These devices will keep your individuality in digital format. Any dealing will be unlocked by this device in concurrence with your ain private key or even perchance biometries. This device will go the most of import thing that you will hold with you all the clip. ( Some people may even be happy for the device to be implanted in them ) .

With an exponential addition in the figure of people with entree to bank histories, more people will be able to have money, have entree to support and this will take to a massive increased economic authorization. This will straight take to a better life for more.

Ultimately, I expect hard currency to wholly vanish as people start recognizing the jobs associated with hard currency

Advantages of Mobile Banking

The biggest advantage that nomadic banking offers to Bankss is that it drastically cuts

down the costs of supplying service to the clients

This new channel gives the bank ability to cross-sell up-sell their other complex banking merchandises and services such as vehicle loans, recognition cards etc

For service suppliers, Mobile banking offers the following certain manner to accomplish growing. Mobile banking is assisting service suppliers increase grosss from the now inactive endorser base. Service suppliers are progressively utilizing the complexness of their supported mobile banking services to pull new clients and retain old 1s.

Effective manner of bettering client service:

A bank could, through the usage of nomadic engineering, inform proprietors each clip purchases above a certain value have been made on their card. This manner the proprietor is ever informed when their card is used, and how much money was taken for each dealing

the bank could remind clients of outstanding loan refund day of the months, day of the months for the payment of monthly installments or merely state them that a measure has been presented and is up for payment.

The clients can so look into their balance on the phone and authorise the needed sums for payment.

They can automatically see sedimentations and backdowns as they occur and besides pre- agenda payments to be made or checks to be issued.

Customer can besides bespeak for services like stop check or issue of a check book over one ‘s nomadic phone

Banks have the possible to convey down costs for the bank itself. Through nomadic messaging and other such interfaces, Bankss provide value added services to the client at fringy costs

Anywhere/anytime features of nomadic services:

A Mobile is about ever with the client. As such it can be used over a huge geographical country. The client does non hold to see the bank ATM or a subdivision to help of the bank ‘s services.

Success Narratives

Reliance Infocomm, HDFC Bank & A ; ICICI Bank India

When Reliance Infocomm, India rolled out its CDMA web, ( at the clip the nomadic market in India was still in its babyhood, and informations services were about ne’er heard off ) it made certain that all French telephones supported Java. The Reliance application platform, besides known as R-World brought Java compatibility even to the lower terminal phones.

Reliance used a fresh manner to get the better of the memory restrictions of lower-end nomadic phones, which hampered deploying of multiple standalone J2ME based clients. Alternatively of hive awaying applications statically on their cell phones, users entree a individual bill of fare based application called R-World, which connects them to the Reliance waiters. Using the bill of fare based user interface, nomadic users select the application, which they want to run and download them over-the-air to their cell phones. These applications are so executed locally on the Mobiles. From mid-2004 Reliance tied up with two of the popular private sector Bankss, HDFC and ICICI, to supply a host of their question and dealing based mobile banking services through its R-World


ABN Ambro, India

ABN AMRO Bank brings to the convenience of nomadic banking utilizing an application

called MPOWER. It allows clients to entree their history for enquiry & A ; minutess utilizing simple SMS messages. One can make the following utilizing MPOWER:

aˆ? Balance & A ; Transaction Inquiry

aˆ? Share Holdings in Demat Account

aˆ? Fundss Transfers to ABN AMRO & A ; other Bankss

aˆ? Bill Presentment and Payment

aˆ? Cheque Inquiry & A ; Stop Cheque

aˆ? Online Fixed Deposit Opening

aˆ? Request for Cheque Book & A ; Statement

aˆ? Request for new PIN & A ; alteration PIN online

Challenges for Mobile Banking

Handset operability

There are a big figure of different nomadic phone devices and it is a large challenge for Bankss to offer nomadic banking solution on any type of device. Some of these devices supportA Java ME and others supportA SIM Application Toolkit, a WAP browser, or onlyA SMS.

Initial interoperability issues nevertheless have been localized, with states like India utilizing portals like R-World to enable the restrictions of low terminal Java based phones, while focal point on countries such as South Africa have defaulted to theA USSDA as a footing of communicating accomplishable with any phone.

The desire for interoperability is mostly dependent on the Bankss themselves, where installed applications ( Java based or native ) provide better security, are easier to utilize and let development of more complex capablenesss similar to those of internet banking while SMS can supply the rudimentss but becomes hard to run with more complex minutess.

There is a myth that there is a challenge of interoperability between nomadic banking applications due to sensed deficiency of common engineering criterions for nomadic banking. In pattern it is excessively early in the service lifecycle for interoperability to be addressed within an single state, as really few states have more than one nomadic banking service supplier. In pattern, banking interfaces are good defined and money motions between Bankss follow the IS0-8583 criterion. As nomadic banking matures, money motions between service suppliers will of course follow the same criterions as in the banking universe.


Security of fiscal minutess, being executed from some distant location and transmittal of fiscal information over the air, are the most complicated challenges that need to be addressed jointly by nomadic application developers, radio web service suppliers and the Bankss ‘ IT sections.

The undermentioned facets need to be addressed to offer a secure substructure for fiscal dealing over wireless web:

Physical portion of the handheld device. If the bank is offering smart-card based security, the physical security of the device is more of import.

Security of any thick-client application running on the device. In instance the device is stolen, the hacker should necessitate at least an ID/Password to entree the application.

AuthenticationA of the device with service supplier before originating a dealing. This would guarantee that unauthorised devices are non connected to execute fiscal minutess.

User ID / PasswordA authenticationA of bank ‘s client.

EncryptionA of the informations being transmitted over the air.

EncryptionA of the information that will be stored in device for ulterior / off-line analysis by the client.

Scalability & A ; Reliability

Another challenge for theA CIOsA andA CTOsA of the Bankss is to scale-up the nomadic banking substructure to manage exponential growing of the client base. With nomadic banking, the client may be sitting in any portion of the universe ( true anytime, anyplace banking ) and hence Bankss need to guarantee that the systems are up and running in a true 24 ten 7 manner. As clients will happen nomadic banking more and more utile, their outlooks from the solution will increase. Banks unable to run into the public presentation and dependability outlooks may lose client assurance. There are systems such asA Mobile Transaction PlatformA which allow quick and secure nomadic enabling of assorted banking services. Recently in India there has been a phenomenal growing in the usage of Mobile Banking applications, with prima Bankss following Mobile Transaction Platform and theA Central BankA publication guidelines for nomadic banking operations.

Application distribution

Due to the nature of the connectivity between bank and its clients, it would be impractical to anticipate clients to regularly visit Bankss or connect to a web site for regular ascent of their nomadic banking application. It will be expected that the nomadic application itself check the ascents and updates and download necessary spots ( so called “ Over The Air ” updates ) . However, there could be many issues to implement this attack such as upgrade / synchronism of other dependent constituents.


It would be expected from the nomadic application to back up personalization such asA :

& gt ; Preferred Language & gt ; Date / Time format & gt ; Amount format

& gt ; Default minutess & gt ; Standard Beneficiary list & gt ; Alerts


Many believe that Mobile users have merely started to to the full use informations capablenesss in their nomadic phones. Service suppliers are every twenty-four hours coming up with new services, supplying methods to do the solution more easy to utilize, implementing techniques to better security, launch of 3G is supplying higher informations transportation rate and innovation of new phones more often is driving nomadic users towards subscribing to mobile banking services. In India, where Mobile endorsers far exceed fixed line endorsers because of better nomadic substructure in comparing to fixed line substructure has made mobile banking much more appealing in India today. Assorted participants involved in supplying nomadic banking services ( Bankss, fiscal establishments, service suppliers, operators etc ) are hence anticipating a possible growing in nomadic banking industry in India.

Mobile banking is traveling up on the acceptance curve, which is apparent in the figure of executions known in the universe and the degree of involvement and treatment around the engineering and its execution. It is besides apparent in the figure of engineering suppliers

emerging in the nomadic banking infinite.

There are several picks when sing how to implement nomadic banking. These picks

include whether or non to develop the engineering within the bank, utilize a shared substructure,

or buy the enabling engineering from one of many sellers.

The picks besides include assorted nomadic carrier channels, suited to differing market sections

and differing capablenesss of consumers French telephones. Each of the carrier channels has alone demands in purveying and procuring applications, minutess and consumer informations. The selected execution option including carrier channel, seller and value proposition, should be driven by consumer acceptance of the engineering, proficient capableness of the French telephones in the mark market, affordability of the carrier channel, and the consumers easiness of accessing the service.

Mobile banking is poised to go the large slayer nomadic application sphere. However, Bankss traveling mobile the first clip demand to step the way carefully. The biggest determination that Bankss need to do is the channel that they will back up their services on. Mobile banking through an SMS based service would necessitate the lowest sum of attempt, in footings of cost and clip, but will non be able to back up the full breath of transaction-based services. However, in markets like India where a majority of the nomadic population users ‘ phones can merely back up SMS based services, this might be the lone option left.

On the other manus a market to a great extent segmented by the type and complexness of nomadic phone use might be good topographic point to axial rotation of WAP based nomadic applications. A WAP based service can allow travel of the demand to custom-make serviceability to the profile of each nomadic phone, the tradeoff being that it can non take advantage of the full comprehensiveness of characteristics that a nomadic phone might offer. Mobile application standalone clients bring along the load of back uping multiple nomadic device profiles. Harmonizing to the Banking Group, mobile banking services will hold to back up a lower limit of 50 different device profiles in the close hereafter. However, presently the best user experience, depending on the capablenesss of a nomadic phone, is possible merely by utilizing a standalone client. Mobile banking has the potency to make to the nomadic phone what E-mail did to the Internet. Mobile Application based banking is poised to be a large m-commerce characteristic, and if India ‘s raid into mass Mobile banking is any indicant, nomadic banking could good be the impulsive factor to increase gross revenues of high-end nomadic phones. Nevertheless, Bank ‘s demand to take a difficult and deep expression into the nomadic use forms among their mark clients and enable their Mobile services on a engineering with ranges out to the bulk of their clients.

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