People love to use technology in every field possible. Almost every sector is using this new trend to lure more users. In this era of technology, banks are also in the race of persuading more customers to use their services. Largely, all banks are pushing ahead the idea of mobile banking to their customers after the introduction of electronic banking and considering modern day requirements. Still, the concept of mobile banking is unknown to most of us.
“Mobile banking to most Indians is complex and too technical,” said AP Hota, chief executive of National Payments Corporation of India, an apex body for mobile banking payments.
What is Mobile Banking?
Few years ago, the usage of mobile was restricted to making and receiving calls. But scientific and technological advancements are taking place at a fast pace. Mobile banking, also known as M-Banking, mbanking and SMS Banking, is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions via a mobile phone.
Until recently, mobile banking was done via SMS or the mobile web. But with Apple’s success with the launch of the iPhone and Google’s Android has led to increased usage of special client programs, called apps, downloaded to mobile devices.
The key players in the mobile banking market in India are ICICI Bank, HDFC Bank, SBI Bank, Axis Bank, Canara Bank, Syndicate Bank, Bank of Baroda etc. With mobile banking, customers can perform any financial and non financial transactions, make payments, and check account information which is time-saving and advantageous.
The Reserve Bank of India has given approval to 32 banks for providing mobile banking facility and of these 21 banks has started providing these services. All banks are now allowed to offer mobile banking service to their customers subject to a daily cap of Rs 50,000 per customer for both funds transfer and transactions involving purchase of goods and services.
Challenges
As much as one enjoys using services offered through mobile banking, the fact remains that issues crippling the service are also high. Mobile banking does not raise any new security concerns, but it is better to ensure adequate security.
Benefits
Growth-oriented banks will benefit the most from the opportunity of mobile banking. Besides, telecommunications companies also have a wide leverage in mobile banking. A few months ago, Reliance Communications launched its new mobile banking service in association with State Bank of India.This service permitted reliance GSM subscribers to access their State Bank of India account anytime, just using their handset. Mahesh Prasad, president-Wireless Business, Reliance Communications, commented during the launch, “Consumers use their cell phones to play games, read news headlines, surf the Internet, do online trading, share documents, write blogs, do chatting, listen to music, book a ticket for movie, etc. And still consumers continuously keep demanding more and more from their phones. This mobile banking service is yet another useful service for our customers; they can now avoid those long queues at the SBI branches.”
Most banks do not have the capacity to aggressively market mobile banking on their own. So banks that want to use mobile banking to reach unbanked customers need to develop strong partnerships for mass-market promotion of the service.
Norwegian telecom group Telenor released a study by Boston Consulting Group called, “Socio-economic impact of mobile financial services,” which found that mobile financial services are expected to improve lives of around 2 billion people in developing countries and boost economies by 2020. Jon Fredrik Baksaas, Telenor chief executive said, “As a global telecommunications operator, we have a unique role to play in the development and expansion of mobile financial services. We believe that mobile financial services will be one of the key drivers for financial inclusion going forward and thus has the potential to be the most powerful tool for economic and social development in emerging economies."
Another study by Accenture states that banks generating the highest returns on mobile banking investments achieved ROI (return on investment) by emphasizing customer convenience and accurately measuring how customers use their mobile phones to bank. “The mobile banking channel offers an opportunity for banks to create a meaningful dialogue with their customers, deepening loyalty and broadening the services to which their customers can subscribe. Leading financial institutions that are communicating the value of these services to their customers are generating new revenue,” said Andy Zimmerman, director, Mobility Services, Accenture.
Mobile banking is really helpful as it brings banking within everyone’s reach especially during a situation where banks are not present and a transaction is needed to be done at that point of time.
