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In partial fulfilment of the Dissertation in Semester - IV of




This is to declare that the report entitled IMPLICATION OF MOBILE BANKING SERVICES IN INDIA is prepared for the partial fulfilment of the Dissertation course in Semester IV of the Master of Business Administration by me under the guidance of Dr Kavita Chavali (Faculty Guide) I confirm that this dissertation truly represents my work. This work is not a replication of work done previously by any other person. I also confirm that the contents of the report and the views contained therein have been discussed and deliberated with the Faculty Guide.

Signature of the Student Name of the Student (in Capital Letters) Registration No

: : Chandini Nareshbhai Patel :11010121302


This is to certify that Ms.
11010121302 Chandini Nareshbhai Patel

Regn. No.

has completed the dissertation titled



under my guidance for the

partial fulfillment of the Dissertation course in Semester IV of the Master of Business Administration

Signature of Faculty Guide:

Name of the Faculty Guide:


INTRODUCTION ............................................................... 7 LITERATURE REVIEW ................................................... 11 DESIGN AND METHOD OF STUDY ............................... 18 INDUSTRY ANALYSIS ..................................................... 22 TOPIC DETAIL ................................................................. 22 DATA ANALYSIS AND INTERPRETATION .................. 43 SUMMARY AND CONCLUSION ..................................... 66 MAJOR FINDINGS ........................................................... 67 FINDINGS OF THE BANKS SURVEY ............................ 67 FINDINGS OF THE CUSTOMERS SURVEY. ................ 69 CONCLUSION................................................................... 70 EDUCATIONAL IMPLICATION ..................................... 71 LIMITATIONS OF THE STUDY ...................................... 73 SUGGESTIONS FOR FURTHER STUDY ........................ 74 REFERENCES ................................................................... 75 ANNEXTURE .................................................................... 78


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Mobile have become a necessary communication tool for every individual worldwide. In India, where mobile subscribers far exceed fixed line subscribers because of better mobile infrastructure in comparison to fixed line infrastructure has made mobile banking much more appealing in India today. Various players involved in providing mobile banking services whether banks, financial institutions, service providers, operators etc. are therefore expecting a potential growth in mobile banking in India (Unnithan and Swatman 2001). Various players involved in providing mobile banking services whether banks, financial institutions, service providers, operators etc. are therefore expecting a potential growth in mobile banking in India (Unnithan and Swatman 2001). However, the actual mobile banking usages dont match the great number of mobile subscribers (617 mn, May 2010 source:TRAI) in the country. Reason could be various issues involved in mobile banking services like Interoperability- due to lack of mobile banking technology standards and large number of different mobile phone devices (Banzal 2010; Mas 2008; Lyman et al. 2008), Security of financial transaction both at physical level i.e. security of mobile device and data encryption level (Sharma and Singh 2009; Astha 2009; Banzal 2010), Regulatory authority RBI & TRAI conflicts on regulations in India (Weber 2010; Cheney 2008),and more. CORE OF THE PROBLEM In India traditional branch-based banking remains the most widely adopted method of conducting banking transaction, at same time commercial banks are undergoing a rapid change majorly driven by the information & telecommunication (ITC) technology. ICICI bank pioneered in mobile banking services in India. Among public banks, Union Bank of India was first to introduce mobile banking (Ali et al. 2010). Today many commercial banks have launched mobile banking using ITC technology and now they can reach out to customers and provide them with not only general information about its services but also the opportunity of performing interactive retail banking transactions anytime, anywhere. Various studies have been done to analyse the customer perception towards banking services through mobile phones. Most of the studies have shown that the customers are unaware of the mobile banking service offerings and many are reluctant to use this service. Majority of the customers consider mobile banking safe in public 8

sector banks. Private sector banks have rare problems whereas foreign banks mobile banking is considered as more costly (Joshi and Sharma). The role of mobile banking in financial inclusion has also been debated lately. Mobile banking has been adopted by many banks in order to reach a large number of unbanked people but many financial institutions has showed reluctance because of security issues and regulatory constraint. RBI too, has recognized the importance of using mobile technology and led down various guidelines to ensure safety and security of transaction. So, this study has been done to understand the feasibility of mobile banking from the point of view of the bankers. It will try to understand the strategic implication of providing mobile banking services and also its relevance (as perceived by banks) in the field of financial inclusion.

NEED OF THE STUDY Mobile banking is gaining increasing popularity and acceptance in todays banking world, particularly as a means to strengthen customer relation and services. In India, various studies has been done from the point of view of customers and the results showed that most of the customers were either unaware of mobile banking services or many who used this service did not rank it as the most preferred channel (joshi and Sharma,2010). Even then most of the Indian banks are coming up with mobile banking services for its customer. Recently SBI along with Eko Aspire Foundation has launched a program for opening SBI Mini Savings Bank Account on the Mobile Platform. HDFC tied up with Vodafone to provide banking services to its customer through mobile phones. Recent developments in the area of mobile banking have aroused a need to study the implication of mobile banking from the bankers perspective. The study will help in understanding the importance of mobile banking from the point of view of the banks. Many banks have also started to use Mobile banking for the purpose of Financial Inclusion. So the study will also help us to know the feasibility of mobile phones as a tool of financial inclusion from the point of view of banks. OBJECTIVE OF THE STUDY The aim of this study is to enhance our understanding of mobile banking in India by seeking the opinion of top Indian Banks and also understand the current status of awareness among the Indian customers. The three major objectives are: 1. To examine the viability of Mobile banking in India by analysing the level of awareness among customers and their adoption 2. To examine the objectives of offering mobile banking for Indian Banks 3. To examine the relevance of mobile banking in financial inclusion In order to achieve the objective of this study, the study will be conducted in two parts. The first part will be done using a survey methodology involving a selected sample of customers. The second part will consist of a survey involving the top banks using a comprehensive questionnaire.






This dissertation idea is based on some of the researches performed elsewhere in the world. Some modifications were made to the topic in order to suit the requirements and conditions existing in India, where this dissertation is undertaken. So it is of utmost importance to know the base of this study from the research literature and understand their implications on this study. METHOD OF REVIEW The topic of Implication of Mobile Banking for Indian Banks- Bankers perspective is based on some of the study done abroad such as Stephan Buse Cornelius Herstatt (2006), Customer on the Move: Strategic Implications of Mobile Banking for Banks and Financial Enterprises as well as studies conducted in India like, Nishant Joshi, Dr RK Sharma, Neha Joshi (2010), Empirics of the Exploit and Recognition of Mobile Banking: A New Pragmatic Maxim, 2010 and Dr.K.Martina Rani (2010), Mobile Banking: A Tool of Financial Inclusion in India. A review of various studies revealed that there has hardly been any research from the perspective of the bankers. This research gap has motivated me to conduct my study on the topic mentioned above. Many research articles have been reviewed to understand the concept of mobile banking in almost every possible way so as to conduct the research smoothly. Only after the review of literature, the topic of study has been finalized.



The review includes various studies done in countries like Germany and USA. The details of some of them will be explained in the further pages. Only the Topics and the researchers information are provided here: Stephen and Buse(2008),Germany, Mobile Banking as Business Strategy: Impact of Mobile Technologies on Customer Behaviour and Its Implications for Banks Stephan Buse Cornelius Herstatt (2006),Germany, Customer on the Move: Strategic Implications of Mobile Banking for Banks and Financial Enterprises Ignacio Mas (2010),USA, Savings for the poor: Banking on Mobile phones Francese Prior and Javier Santoma, (2010), USA, Banking the unbanked using prepaid platforms and mobile telephones in the United States

Mobile Banking as Business Strategy: Impact of Mobile Technologies on Customer Behaviour and Its Implications for Banks Rajnish Tiwari, Stephan Buse, Cornelius Herstatt

The research shows that mobile Commerce is gaining increasing acceptance amongst various sections of the society. This growth can be partly traced back to technological and demographical developments that have been influencing important aspects of the socio- cultural behaviour in todays world. The need/wish for mobility seems to be the driving force behind Mobile Commerce in general. Mobile Banking, as has been demonstrated, has gained non-negligible relevance for banks today. Developments in the banking sector, e.g. increased competition on account of technological developments coupled with the process of globalisation have produced new challenges for banks. Mobile Banking presents an opportunity for banks to retain their existing, technology-savvy customer base by offering value-added, innovative services. It might even help attracting new customers. Further, Mobile Banking presents a chance to generate additional revenues.


Banking the unbanked using prepaid platforms and mobile telephones in the United States: Francese Prior and Javier Santoma, 2010

Nearly 40 million United States households (approximately 73 million people) are financially underserved (CFSI, 2007), of which 15 million households (approximately 28 million people) are totally unbanked. The research finds out that Mobile banking has a potential market segment in the United States, already targeted by prepaid issuers. The customers who are not being currently served by the traditional banking sector could be interested in this value proposition if it aligns with their requirements. Among the unbanked, Hispanics are potentially the population segment that emerging mobile banking initiatives are currently targeting. Banking access and mobile phone usage among Hispanics in the United States is very similar to banking access and mobile phone usage in some developing countries such as South Africa, where mobile banking has made important inroads.

Customer on the Move: Strategic Implications of Mobile Banking for Banks and Financial Enterprises Stephan Buse Cornelius Herstatt, 2006

The increased need/wish for mobility amongst various sections of the society, particularly amongst professionally active groups, is confronting credit institutions (banks) and other enterprises offering financial services, with challenges to adjust their service portfolio in a way to best suit the needs of their customers. On the other hand it also opens up a new arena of opportunities by making it possible to offer innovative, value-added services so as to not only cater to the needs arising out of the mobility but also by actively inducing demand for new, mobility-centric services This paper examined strategic implications of these changes in customer behaviour as perceived by banks. It introduces the findings of a bank survey conducted by the authors in Germany. The survey discovered that banks expect Mobile Banking to gain greater relevance in near future and are positioning themselves not to be left behin 14

Savings for the Poor: Banking on mobile phones Ignacio Mas, Deputy Director in the Financial Services for the Poor programme at the Bill & Melinda Gates Foundation The paper emphasizes on the fact that there is a growing sense of inevitability about branchless banking across the developing world: it has become widely accepted that banks cannot sustainably reach the bulk of poor people through dedicated bricksand mortar infrastructures. M-PESA in Kenya is a showcase in leveraging retail outlets and real-time mobile communications to offer safe and convenient transactions to the public, but it is only now starting to deliver meaningful financial services. It is estimated that half of the worlds population does not have access to financial services. In developing countries, over 70% of the population is excluded. Of the estimated 2.6 billion people living on less than $2 per day (almost 40% of the worlds population), less than 10% have access to formal savings products. The paper also reveals that poor people do save but the problem is that they do not have access to banks. How do they cope? The main problem of access is the high transaction costs that both customers and financial service providers need to incur to contract with each other. So mobile banking can help in eliminating this barrier to a great extent by tapping the savings of the poor at source and with minimum cost.



Some of the studies reviewed were conducted in India. The extracts of those studies are as follows:

Empirics of the Exploit and Recognition of Mobile Banking: A New Pragmatic Maxim, 2010 Nishant Joshi, Dr RK Sharma, Neha Joshi

The study tried to analyse the adoption and usage of mobile banking service among Indian banking customers as well as banks. The paper concludes that mobile banking services are at its early years where a lot of efforts are required to further develop this technology in Indian banking sector. Customers do not prefer mobiles for banking services due to high charges, slow data transmission and insecurity. Issues & Challenges in Mobile Banking In India: A Customers Perspective,2011 Prerna sharma and Preeti singh This paper attempts to explore selected mobile banking issues from customers perspective and to make recommendation to various parties involve in mobile banking services viz. banks, mobile operators, content providers, regulators on relevant issues which could become challenges for them in providing effective mobile banking services in the country. Results show that from consumers perspective mobile handset operability, security/privacy and standardization of services are the critical issues. Majority of the customers were indifferent towards utility of mobile banking in comparison to retail banking and online banking.

Mobile Banking: A Tool of Financial Inclusion for India,2010 Dr.K.Martina Rani The mobile banking service is an important tool for a countrys financial inclusion policy, as it reaches a countrys rural poor faster than any other mode of transfer of funds by distributing the financial services to the unbanked rural poor who use mobile services. The complexities involved in the growth of mobile-based 16

banking services are the interoperability of players such as banks/MFIs, Mobile Network Operators (MNOs) and mobile-application providers, sophisticated technology and requirement of various regulations from different perspectives in the mobile banking system. The transaction cost involved in the mobile\ banking financial services is the main focus for banks and MFIs to render mobile banking service to the rural poor, and for the lower transaction cost, scalability is another factor to be focused which is the result of faster customer adoption, without which the mobile banking cannot be a tool of poverty elimination.

The new way of Banking: India's Mobile Banking initiatives, 2009 Saeed Khan Mobile phones are now also being started for banking transactions in India. With around 400 million mobile subscribers and strong mobile network infrastructure, India is on its way to increasing the reach of Mobile Banking services to urban as well as rural bank customers. Different stakeholders responsible for the success of mobile banking services are regulators such as RBI, TRAI; Banks; Telcos and Third Party Payment Processors. Around 43 million urban Indians used their mobile phones to access banking services during quarter ending August 2009. ICICI Bank remains Indias biggest private bank on Mobile Banking usage with HDFC Bank second, followed by the State Bank of India. BENEFIT OF THE REVIEW The review has been useful the following manner-: Helpful in understanding the concept of mobile banking Helpful in identifying the different model prevailing Helpful in identifying the research gap in the concerned area of study Helpful in identifying different variables Helpful in building the hypothesis





STATEMENT OF PROBLEM To check that are the customers well aware of Mobile Banking? Does Mobile Banking give a strategic advantage to Banks? Is Mobile Banking (Banks perspective) a potent tool for financial inclusion?

VARIABLES OF THE STUDY 1. Independent Variables for Banks Types of Banks Target groups Objectives fulfilled by Mobile banking

2. Dependent Variable for Banks Significance of Mobile Banking Relevance in financial inclusion

3. Independent Variables for Customers Age Qualification Gender Occupation

4. Dependent Variable Customer awareness Medium of mobile banking preferred Preference of service offerings

HYPOTHESIS H0: Significance of Mobile Banking for banks is not dependent upon the objectives it fulfils H1: Significance of Mobile Banking for banks is dependent upon the banks objectives it fulfils H2: Customers are aware of mobile banking, K60% (Our assumption that 60% of customers are aware of mobile banking) H3: There is a relationship between age and level of awareness regarding mobile banking


H4: There is a relationship between occupation and level of awareness sregarding mobile banking. Where K is the fraction of customers surveyed


DESIGN OF THE STUDY The Study is divided into two parts. In the first part a questionnaire survey is done where the respondents are banks customer. The respondents are asked questions on various aspects of mobile banking including their awareness, preferences etc. In the second part of the survey, the respondents are banks who are asked questions to find out their response on the topic of mobile banking and its implication on their business. SAMPLING PROCEDURE A random sampling was done to select the respondent customers. Whereas in case of banks, the total population is divided into three groups (public, private and foreign banks). Then the required information is collected from the elements within each selected group. The sample size is based on the available resources and will be good enough to draw a proper conclusion without any bias within the groups. Due to the various constraints the Sample size has been decided as follows;

Individual customers- 112 Banks- 14

The response from the customers was recorded through online survey. Response from banks were taken by interviewing the managers of the concerned department in person. TOOLS AND STATISTICAL ANALYSIS USED IN THE STUDY Microsoft Excel and SPSS have been used wherever required for the analysis of data. Efforts have been made to make the analysis as simple as possible. Hypothesis testing has been done by using Chi-Square Test and Regression analysis. Chi- Square test has been done to find out the relationship between Age and Occupation of the customers with that of their level of awareness. Whereas, Regression analysis has been done to find out whether the significance of mobile banking for the banks is dependent on the various objectives it fulfils or not. Apart from these two analyses simple descriptive statistics has been used as and when necessary.





BANKING INDUSTRY A bank is a commercial or state institution that provides financial services, including issuing money in various forms, receiving deposits of money, lending money and processing transactions and the creation of credit. A commercial bank accepts deposits from customers and in turn makes loans, even in excess of the deposits; a process known as fractional-reserve banking. Some banks (called Banks of issue) issue banknotes as legal tender. Many banks offer ancillary financial services too. Currently in most jurisdictions commercial banks are regulated and require permission to operate. Operational authority is granted by bank regulatory authorities which provides rights to conduct the most fundamental banking services such as accepting deposits and making loans. Banks have influenced economies and politics for centuries. Historically, the primary purpose of a bank was to provide loans to trading companies. For centuries, the banking industry only dealt with businesses, not consumers. Commercial lending today is a very intense activity, with banks carefully analyzing the financial condition of their business clients to determine the level of risk in each loan transaction. A bank generates a profit from the differential between the level of interest it pays for deposits and other sources of funds, and the level of interest it charges in its lending activities. This difference is referred to as the spread between the cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclic and dependent on the needs and strengths of loan customers. In recent history, investors have demanded a more stable revenue stream and banks have therefore placed more emphasis on transaction fees, primarily loan fees but also including service charges on array of deposit activities and ancillary services. However, lending activities still provide the bulk of a commercial bank's income. BANKING IN INDIA Banking in India originated in the first decade of 18th century with The General Bank of India coming into existence in 1786. This was followed by Bank of Hindustan. Both these banks are now defunct. The oldest bank in existence in India is the State Bank of India being established as "The Bank of Bengal" in Calcutta in June 23

1806. A couple of decades later, foreign banks like Credit Lyonnais started their Calcutta operations in the 1850s. At that point of time, Calcutta was the most active trading port, mainly due to the trade of the British Empire, and due to which banking activity took roots there and prospered. The first fully Indian owned bank was the Allahabad Bank, which was established in 1865. By the 1900s, the market expanded with the establishment of banks such as Punjab National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai both of which were founded under private ownership. The Reserve Bank of India formally took on the responsibility of regulating the Indian banking sector from 1935. After India's independence in 1947, the Reserve Bank was nationalized and given broader powers. CURRENT SCENARIO Currently, banking in India is considered as fairly mature in terms of supply, product range and reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. Even in terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and transparent balance sheets-as compared to other banks in comparable economies in its region. The Reserve Bank of India is an autonomous body, with minimal pressure from the government. With the growth in the Indian economy expected to be strong, the demand for banking services-especially retail banking, mortgages and investment services are expected to be strong. Mergers & Acquisitions, takeovers, asset sales and much more action will happen on this front in India. The Indian banking industry has realized the critical importance of IT based operational solutions for surviving the fierce competition to enhance the customer base. Many banks have implemented IT based Core Banking Solutions in the recent time. Wherever required, the banks have undertaken business process reengineering to suit the technology. It is believed that in technology, a majority of the leading Indian banks are among the best in the world. It is however time to evaluate whether such IT initiatives have really benefited the operational units, particularly the branches, by contributing to business intelligence. Banks have now started exploring the feasibility of using mobile phones as an alternative channel of delivery of banking services. Few banks have started offering information based services like balance enquiry, transaction enquiry, location of nearest ATM/branch etc. 24

Acceptance of transfer of funds instruction for credit to beneficiaries of same/or another bank in favor of pre-registered beneficiaries have also started by few banks. Currently, India has 88 scheduled commercial banks - 28 public sector banks (that is with the Government of India holding a stake), 29 private banks (these do not have government stake; they may be publicly listed and traded on stock exchanges) and 31 foreign banks. They have a combined network of over 53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks hold over 75 percent of total assets of the banking industry, with the private and foreign banks holding 18.2% and 6.5% respectively.



The Internet is revolutionizing the way the financial industry conducts business, empowering organizations with new business models and new ways to interact with customers. The ability to perform banking transactions online has created new players in the financial industry, such as online banks and brokers who offer personalized services through their Web portals. This increased competition is driving traditional financial institutions to find new ways to add the value to their products and services, gain competitive advantage and increase customer loyalty while also attracting new, high-value clients. Mobile and wireless technology, combined with the wide variety of portable devices available today, enables new revenue opportunities for financial services organizations. This provides a new channel that can be used to refresh and expand the customer base, attract prime customers and enhance loyalty. With mobile and wireless technology, banks can offer a wide possibilities of services to their customers, from the freedom of paying bills while stuck in traffic, to receiving notification of a change in stock price while having lunch, the convenience and time saving benefits of wireless financial services are huge. The challenge, then, is how to turn these possibilities into a reality for the customers. Benefits A. Grow new customer base and markets : Developing wireless applications and services targeted at the mobile mass market will allow attracting new, high-value customers into mobile banking portal and expanding the reach to global markets. B. Increase share of customer wallet : The convenience of having personalized wireless access to critical financial information is an invaluable service for customers on the move. Enabling the execution of time-sensitive financial transactions anywhere, anytime, provides the opportunity to strengthen the relationships with existing customers. This ultimately results in an increased share of the customers' transactions--preventing them from taking a portion of their financial business elsewhere. 26

C. Grow assets, number of transactions and fees : Granting customers flexible access to financial information and accounts enables them to perform transactions when it's most convenient for them. As a result, they have the opportunity to conduct transactions more frequently, driving increased revenue from fees. D. Expand and enhance brand presence: Brand and reputation for convenience, service and innovation will be strengthened and enhanced each time customers on the move stop to check their stock portfolio or to pay bills wirelessly. This also offers significant potential to grow the market.


STRATEGIC IMPLICATIONS FOR BANKS Just When Financial institutions began to consolidate their E-Commerce activities, A new challenges has emerged-Mobile Commerce. This article attempts to clarify what Banks are currently doing, what additional opportunities and risks exist, and what should be done to extract maximum from the M-Commerce markets. 1. Today, banks across the world are delivering a wide range of core banking services through the mobile channel. In Singapore, users can check balances, pay bills and transfer funds. They can also view the latest deposit and foreign exchange rates, get the latest stock market information as well as their personal watch. Banks also use mobile technology to transfer important financial information to their customers (e.g., Home loan application approval, fixed deposit Maturity Reminder, IPO Application Results and IPO Share financing and Allotment Results). In the US, Charles Schwab offers trades, quotes, alerts and notification both through the mobile phone display, and by means of an interactive voice quote. MeritaNordbanken of Scandinavia has established Solo, a WAP-Based payment system, which enables customers to purchase from 700 virtual stores and pay directly from their bank account by entering username, password and transaction number. Banks are exploring the potential of mobile phones as an on- the-spot payment device, which incorporates both debit and credit card. Functionally. 2. In addition to being a new distribution channel for financial services, Mcommerce presents the opportunity for banks to significantly expand their customer relationships. 3. Challenges lifestyles and an increasing preference for speed and convenience are eroding the traditional affinity between customers and branch offices. As new technology disinter mediates traditional channel, the core value proposition of a bank becomes fulfilling customer needs. Delivering this value proposition hinges on owning or earning the customer interface, through understanding individual customer 28

needs and preferences, and bringing the customer a complete solution which satisfies his financial needs and gives him maximum conveniences. Instant access to customers through a user-specific device enables the delivery of targeted personalized services the very nature of mobile access devices ( i.e., input/output constraints) encourages tailoring and bundling of services. For example: A middle income consumer would not want to receive an advertisement to buy a BMW. On other and, a high income banking customer might wish to receive the offer to buy the BMW at a special price, bundled with car loan, insurance, and the option of a monthly garage maintenance services. 4. Banks can transcend their traditional role as a channel for banking/financial services and become providers of personalized and localized information, which facilitates the purchase of a wide range of goods and services. Banks, which successfully leverage M-commerce can, Increase customer loyalty, in terms of acquisition, retention and crossselling, by providing tailored bundles of products and services to specific customers. Exploit additional sources of revenue from subscription, transaction and third party referra.


Terms and conditions governing the use of SMS- SIB Mobile Service, the Mobile Banking Service (Push Alerts & Pull Requests)
1.Definitions: "Customer" shall mean a Customer of Mobile Banking. Pull Request facility means the facility granted by the Bank of access to information relating to the savings/current account/overdraft/cash credit account (or any other type of account, that the Bank may permit later), of the customer and usage of products and/or services as may be made available on mobile phone by the Bank from time to time. Push Alert facility means the facility provided by the Bank whereby a customer can obtain specific information pertaining to his account/s on his mobile phone number. "Alert(s)" means the customized messages sent to the customer over his mobile phone as short messaging service ("SMS") in response to the Triggers set by the customer. "Triggers" means the customized triggers that are required to be set or placed by the user with the Bank, which shall enable the Bank to send the corresponding Alerts to the user for specific event/transactions relating to his Account. Mobile phone means the handset and SIM card along with the accessories and necessary software for GSM phones and handsets and software for CDMA phones, which is owned by the mobile subscriber. Mobile Banking or Facility or service shall mean the Push Alert and/or Pull Request facilities offered by the Bank as SMS. User means the customer of the Bank having registered for the Mobile Banking facility and authorized by the Bank to use the Mobile Banking facility.


Primary account means the main Savings/Current/Overdraft/Cash Credit account of the customer, from which the Bank may deduct any service charges related to the service. "Personal Information" shall mean the information about the user obtained in connection with the Facility. System refers to the Centralized Banking system, Mobile Banking system or any other automated system/s deployed by the Bank. In this document all reference to user in masculine gender shall be deemed to include the feminine gender also. ELIGIBILITY Any customer having a (resident/NRE) Savings /Current /Cash

Credit/Overdraft account with any branch of the Bank with Centralized Banking facility is eligible to avail the Mobile Banking/Alert facility, subject to all conditions mentioned in this Section (Eligibility). The Bank may extend the facility (partially or completely) to other accounts including term deposits and loan accounts if the customer has at least one Savings/Current /Overdraft/Cash Credit account. The Customer desirous of using the Facility should both be the account holder and sole signatory or be authorized to act independently. In case of joint accounts, the facility shall be provided to the account holder/s only if the mode of operations is Either or Survivor, Former or Survivor. Each applicant will have to register separately for availing the facility. All the joint account holders would have to sign in the Declaration authorizing the Bank to provide the facility to the applicant. In such cases, instructions of all the joint account holder/s authorizing the user to use the Facility would be required. All or any transactions arising from the use of the Facility in the joint account shall be binding on all the joint account holders, jointly and severally. An account in the name of the minor, in which a minor is a joint account holder or any account where the mode of operation is jointly, is not eligible for the Facility.


The Bank shall extend the facility to the guardians of Guardian Operated Minor Accounts. The final discretion to offer this Mobile Banking facility to a customer rests with the bank and if the bank decides, may withdraw such a facility at any time without notice and without giving any reasons.

MOBILE BANKING FACILITY A. Pull Request Facility The Bank reserves the right to decide on the services to be offered to a particular user and different services may be offered to different users through mobile Banking. The Bank also reserves the right to make any additions or deletions or revisions in the services offered through Mobile Banking at any time. The user shall, as a matter of customer protection, use a 4-digit code number (PIN-Personal Identification Number) in addition to the keyword to access the mobile Banking service. At present, the User has the option to choose any four-digit number/character as his PIN for the Mobile Banking service. The User shall not disclose his PIN, if any allotted by Bank, to any person or write / record it at any place whereby some other person can come to know his PIN. In case the User fails to follow / adhere to this, he shall be solely responsible for consequences arising thereon. The Bank may, at its discretion, allow the customers to send instructions through Mobile Banking, which would have to be executed. The instructions of the User shall be effected only after confirming the authenticity of the User by means of validation of the mobile number of the User and/or through verification of PIN/ password allotted by Bank to the User or through any other mode of verification as may be stipulated at the discretion of the Bank. Bank shall endeavour to carry out the instructions promptly, but the Bank, shall not be responsible for the delay in carrying out the instructions or not carrying out the instructions, due to any reason whatsoever including failure of operational system or due to any requirement of law. The User is also responsible for the accuracy and authenticity of the instructions provided to the Bank and the same shall be considered to be 32

sufficient for availing of the services under the Facility. Where Bank considers the instructions to be inconsistent or contradictory it may seek clarification from the User before acting on any instruction of the User or act upon any such instruction as it may deem fit, or not carry out the instructions. The User and Bank shall have the right to suspend the services under the Facility if Bank has reason to believe that the User's instructions may lead to direct or indirect loss or may require an indemnity from the User before continuing to operate the Facility. Bank reserves the right to offer the Facility for those Users, who are availing the services of specific cellular service providers only. The access of the User to the Facility shall be restricted to User availing of the Facility on the specific Mobile Phone Number registered with Bank for the Facility. B. Mobile Banking Alert facility The last updated mobile number in the records of the Bank would be used to send the Alerts. Alerts are presently not available for two Mobile numbers for the same account. However, more than one account may be set on a particular mobile number. The Alerts will be available to the users only if the user is within the cellular service range of the particular cellular service provider or within such area, which forms part of the roaming network of such cellular service provider providing services to the User. Alert shall be available only when the system of the Bank is available. Every day the push alerts shall not be available for atleast 10 hours or more, during which the system will be used for backups and shall not be available for inquiry. However the Bank shall endeavour to provide pull requests during this period also.



Eligible customers of the Bank desirous of availing the services should submit an application in the specified form, duly completed, at the branch of the Bank, where the customer has his primary account. Customers of the Bank shall be allowed to use the facilities only after his/her/their application has been processed and the information

furnished registered with the Bank. The processing of the application form shall require a minimum of 10 days from the date of submission of the application. Customer will have to activate the service after the Bank sends the necessary instruction/user guide to the customer. Unless activated, the customer shall not receive any alerts or request pull services. These terms and conditions together with the application made by the Customer and as accepted by the Bank shall form the contract between the Customer and Bank, and shall be further subject to such terms as Bank may agree with any other third party providing such services to Bank which shall facilitate providing of the Facility by Bank to the User. These terms and conditions shall be in addition to and not in derogation of the terms and conditions governing any Account of the user and /or any other product/services provided by the Bank to him. The Customer undertakes that the Customer shall provide accurate information wherever required and shall be responsible for the correctness of information provided by him to Bank at all times including for the purposes of availing of the Facility. Bank shall not be liable for consequences arising out of erroneous information supplied by the Customer. If the Customer suspects that there is an error in the information supplied by Bank to him, he shall advise Bank as soon as possible. Bank will endeavour to correct the error wherever possible on a best effort basis. The Bank shall have the right to reject the application of any person without assigning any reasons.


5. Authorization The user expressly authorizes the Bank to disclose to the mobile service provider / ASP all user information in its possession, as may be required by them to provide the services to the user. The Customer irrevocably and unconditionally authorizes Bank to access all his Accounts for effecting Banking or other transactions of the Customer through the Facility. All records of Bank generated by the transactions arising out of use of the Facility, including the time of the transaction recorded shall be conclusive proof of the genuineness and accuracy of the transactions. The authority to record the transaction details is hereby expressly granted by the User to Bank. The user authorizes the Bank to add, remove or change any service in mobile Banking, partly or wholly, at Banks discretion. User authorizes Bank to send any message such as promotional, greeting or any other message that the Bank may consider appropriate to the user. The User authorizes Bank to send any rejection message, if it finds that the request sent by the User is not as per the Banks format/requirement. The Bank shall make all reasonable efforts to ensure that the user information is kept confidential. The Bank however shall not be responsible for any divulgence or leakage of confidential user information. The user expressly authorizes the Bank to carry out all request(s) or transaction(s) for and/or at the request of the user as are available to the user through mobile Banking facilities without the Bank having to verify the authenticity of any request or transaction purporting to have been received from the user through Mobile Banking. 6. Setting Triggers and Receiving Alerts The user can enter his choice of alerts (as listed by the Bank) in the Mobile Banking registration form. For any change in these parameters, he can separately request in writing. At a later stage, Bank may provide this facility through Internet Banking screen. The User shall notify the Bank, in writing, if he desires to change his Primary account. 35

If the facility has been suspended for a particular user, the Bank in its sole discretion may re-activate the service. In such cases, a written request may also be insisted from the User.

The Bank will not acknowledge receipt of any instructions or Triggers nor shall the Bank be responsible to verify any instructions or Triggers or the user PIN or password or mobile phone number. The Bank will endeavour to give effect to instructions and Triggers, on a best effort basis and as soon as practically possible for the Bank. The Bank shall not be responsible for any deficiency or delay in effecting the service or in effecting modification of the triggers.

The Bank may, in its discretion, not give effect to any Triggers if the Bank has reason to believe (which decision of the Bank shall be binding on the user) that the triggers are not genuine or otherwise improper or unclear or raise a doubt or in case any Triggers cannot be put into effect for any reasons whatsoever.

The user acknowledges that to receive alerts, his mobile phone number must be active and accessible. The user acknowledges that if the users mobile phone number is inaccessible or inactive continuously the user may not receive the Alert message sent by the Bank.

The Bank will process Triggers/Modification of triggers after receipt and the Bank shall have the discretion to determine the time taken to process such request. The user acknowledges that there shall be an intervening period between receipt of Triggers by the Bank, process of the Triggers and the time that the Alerts are sent.


CUSTOMER REQUIREMENTS FOR MOBILE BANKING APPLICATIONS Set of customer requirements Technical requirements Usage is possible with both kinds of devices Adaptation to device Usage regardless of network operator Small amount of transmitted data Usability requirements Possibility to work offline Simple data input method Resumption of usage at the same point One-Click-Request Design requirements Possibility to personalize the application Possibility to scale the application Announcement of events Wide range of functionality Security requirements Encrypted data transmission Authorization of access Simple Authorization


MOBILE BANKING USE CASES A mobile user has to be seen from his context when using the application. Needs and expectations are not generic, but bound to this context. As a typical mobile banking user, we consider someone who already is an electronic banking user shows significant affinity to technology and often finds himself in situations where he can not (or does not want to) rely an infrastructure necessary for electronic banking. Use case 1: Request of account balance. The user is in a mobile situation (e.g. in a department store) and intends to know his account balance, e.g. to verify his account before realizing a spontaneous purchase. Resulting need: Quick obtainment of account balance. Use case 2: Control of account movements The user is waiting for an important cash receipt on his account. He intends to have the exact details of the cash receipt. Resulting need: Continuous control over movements on the account. Use case 3: Instant payment. The user is in a mobile situation and intends to make a payment by bank transfer from his account. Resulting need: Instant execution of a bank transfer. Use case 4: Administration of the account. The user intends to use spare time (e.g. using a train or waiting on the airport) to administrate his account. Resulting need: Quick and easy-to-use execution of transactions and administration is possible.)



Mobile Banking Solutions: Wireless applications offer the opportunity to provide secure, actionable, realtime data through a highly personalized service. Some of the services are: Offer account services: These applications allow banks customer to apply for new banking services, choose features of existing banking services, and personalize banking services. Provide account information: Customer-driven on-demand request for a variety of account information including account balances, stock

portfolios and billing information. Execute transactions: Transactional applications enable customer to

wirelessly transfer balances, pay bills and conduct foreign exchange orders. Provide transaction history and aggregate banking information:

Customers can review banking events for a number of accounts and wirelessly retrieve banking and non-banking information. Transmit banking alerts and reminder messages : Customer-controlled alert profile enable rapid response to news and banking events, Banking advice may also be distributed through these applications. Enable Wireless messaging: Wireless messaging, including SMS, e-mail and instant messaging, allows customers to interact with portfolios managers, bank officials and other customers. Extend banking portals: Banking portals provide useful content for customer and provide the banks the opportunity to cross-sell other products or services. Offer location-based banking services: These applications enable

subscribers to access services that are tailored to their geographic location, such as the location of nearby offices, branches, agents and ATMs.



It is clear that for the mobile phone to become a transactional device, the security of all personal data transmitted through the wireless handset will be critical. Just as e-commerce over fixed- line Internet device can hardly be expected to flourish if frauds or theft is easy. Business and consumer subscribers, commercial entitles and industries are unlikely to make full use of the potential of the new mobile communications media if they are insecure. Although security is mainly a matter of technology, there are two other important aspects, legal protection and consumer perception. Technology: Within the next few months some real improvements will appear in the security of mobile payment technology platform. When analyzing the security of a mobile payment transaction, we have to consider three distinct areas: the buyer, the medium between the buyer and seller. Security on the buyers side implies security of the access device. Because mobile device belongs to an individual, it is inherently more secure then a shared device. Solutions such as PKI (public key infrastructure) and SIM2 (second ID Module) will be introduced to the market early in 2001,which will significantly improve security for buyers. Real improvement in the security of the medium between buyer and seller will occur when 3G networks becomes operational. These 3G networks are based on technology (already used in current networks in the US, Japan and Korea) that using complex encoding and decoding algorithms, originally developed by the military. On the sellers side, acceptable level of security will also be available in early 2001,when wireless Transport Layer Security (WTLS) will be introduced. WTLS Is an Encryption technology, which makes sure that everything sent by the buyer, is received by the seller.


Legal issues: There are two legal issues for mobile payment- customer protection and nonrepudiation. To build consumer confidence, customer protection against fraudulent usage has to be well established and clear. To introduce new laws, or adjust existing legislation, for a new payment method takes times, as unanticipated issues can crop up. This is the main nontechnological reason why the security of a payment method improves over time. The second issue is on-repudiation of a transaction. While accepting credit cards, the seller uses the buyers signature to prevent repudiation. Legalising digital signatures, as proof of purchase in the virtual world, will prevent buyers from disputing their online transactions. Perception: The public perception of the security of a new payment medium is less manageable than the technology and legal aspects, yet can make or break it. Both sender and recipients must have confidence that the information they transfer will arrive securely and in confidence. There can be huge differences in the perception of security between different cultures, which make the issue even more complex and less predictable. For example, in the US the credit card is perceived as much more secure than in Europe a major reason that the credit card took much longer to be accepted in Europe, and still is not as successful there as in the US.


THE POTENTIAL FOR SUCCESS Mobile payment has the potential to become successful as convenient and secure payment method after the barriers described above have been removed probably over the next two years. It seems certain that the main security will be overcome by the end of 2001,when new technologies are available and and when the legal issues have been resolved in most countries. In the Internet world, selling should take off quite soon after the security issues have been resolved. At the moment there is a lack of content, but if open standards are established soon, a lot of start-ups will probably appear to deliver this content. In bricks and mortar the take-off of mobile payment is expected to be slower, because of the huge investments required. So most sellers will probably wait until standards are clearly defined and mobile payment has proved successful in e-commerce. Introducing the mobile delivery channel into an integrated multi-channel strategy is a challenge that will have lasting benefits in the future, providing financial institution with a channel readiness that enables quick repose to emerging consumer trends. As In most successful initiatives in the worlds of e-commerce and m-commerce, partnership with the right technology players is critical. These relationships will help to bring the mobile banking channel to maturity, as the solution that best combines convenience, security, portability, application richness, and the flexibility required to bring new products and services to market quickly. As global financial institutions are discovering today, the infrastructure requirements can be challenging, but not nearly so challenging as tiring to retain banking customers that are moving into the wireless age, with or without their trusted service providers.





This section describes the phenomenon of mobile banking from the bankers perspective. A survey was conducted to get a glimpse of the consideration that might be influencing decision of banks regarding mobile banking. 20 banks were approached to participate in the survey. 14 out of the 20 banks responded to the survey. None of the foreign banks showed their willingness towards the survey. The banks were interviewed on the basis of a standardized questionnaire and their respective response was recorded. The data generated from the survey are analysed and interpreted below. PROFILE OF THE SURVEYED BANK: Out of the 14 surveyed banks, 10 are public sector banks whereas, 4 are private sector banks. None of the foreign banks participated in the survey. FIGURE-1: CATEGORY OF BANK

11 banks have a customer base of more than 30 lakhs whereas, 3 of the banks have a customer base of less than 20 lakhs.






Of the banks surveyed, all of them are offering mobile banking services. 36% of the banks are offering mobile banking for less than one year. 22% of the banks are offering mobile services for less than 3 years and 5 years each. It was observed that the percentage of customer using mobile services vary from banks to banks. Majority of the banks have less than 20% of their customers using mobile banking. This could be directly connected to the level of awareness among the customers which was observed in the customer survey earlier.
* Figure-3: years of offering mobile banking service Figure-4: customer using mobile phone Figure-5: service charge for mobile banking



FIGURE-6: MOBILE ACCOUNTING Interpretation: ` Almost all the banks are offering mobile accounting services. 2 banks think that M-

commerce and card management are unsuitable for mobile banking. But overall, all the banks are in favour of all the services mentioned above. Those which are not providing are planning to launch the services soon





Interpretation: Balance request and mini statements services are provided by all the banks. Only 3 banks provide service like stock market quotes as many believes that it is not much preferred by customers. FIGURE- 8: MOBILE BROKERAGE

Interpretation: Only 4 out of 14 banks are offering mobile brokerage services. 4 banks are planning to offer brokerage service through mobile banking. So, it is understood that banks are not 48

emphasizing on brokerage service as of now. Many think that it is suitable but not necessary at present.


HYPOTHESIS TESTING & LINEAR REGRESSION MODEL H0: The significance of mobile banking for banks does not depends upon the objectives it fulfils H1: The significance of mobile banking for banks depends upon the objectives it fulfils The hypothesis was tested by using linear regression analysis. It was so because both the dependent and the independent variables were in interval scale. Hence, both fulfils the required criteria.

Table (2): Showing Model summary of regression analysis

a. Predictors: (Constant), Financial Inclusion, Fostering an innovative image, Attracting new customers, Increase in turnover, cost reduction, Better customer relation management, Differentiation vis-a-vis rivals

b. Dependent Variable: Significance Of Mobile Banking

Analysis: From the Model summary table it can be analysed that, the R2 was found out to be 0.827 , adjusted R2 was found out to be 0.625. Interpretation: From the table we can figure out that the R2 turned out to be optimum for regression to carried forward. The R2 value signifies that the variable can be held accountable for 82% of the trend followed


Table (3): Showing ANOVA table a. Predictors: (Constant), Financial Inclusion, Fostering an innovative image, Attracting new customers, Increase in turnover, cost reduction, Better customer relation management, Differentiation vis-a-vis rivals

b. Dependent Variable: Significance Of Mobile Banking INTERPRETATION: From the Anova table it becomes evident that the Regression Analysis holds good because the p-value is below .05 p-value < .05, holds good


a. Dependent Variable: Significance Of Mobile Banking

Table (4): Showing Coefficient Matrix

Analysis: From the table it can be analysed that attracting new customers, better customer relation management, fostering an innovative image, and increase in turnover are variables which are significant ( p-value 0.000, 0.017, 0.025, 0.021 respectively) in determining the significance of mobile banking for the banks surveyed.

Interpretation: From the above analysis it is evident that attracting new customers, better customer relation management, fostering an innovative image, and increase in turnover stands out to be important for the banks. Among all attracting new customers (p-value 0.000) might be the most prominent objective for the banks.



FIGURE-9: Showing target customer groups Interpretation: The banks are targeting all the group except the lower income group owing to their less involvement with technological products. REASON FOR NOT ADVERTISING MOBILE BANKING

FIGURE-10 : Showing reasons for reserved attitude of banks Interpretation It can be observed from the chart that majority of the banks wish to first carefully test the response of the customer and then advertise about their mobile banking services


BANKS OFFERING MOBILE BANKING FOR FINANCIAL INCLUSION In this section the banks were asked whether they offer or intend to offer mobile banking for unbanked for the purpose of financial inclusion. The result is shown in the chart below.

FIGURE -11: OFFERING MB FOR FINANCIAL INCLUSION Interpretation: It can be seen that 71% of the bank are offering or intending to offer Mobile banking for the purpose of financial inclusion. This shows that banks have adopted mobile banking as a medium for serving the unbanked in the rural areas.



Table (4): Descriptive analysis

Interpretation: The table above shows that the overall performance of Mobile banking in the area of financial inclusion had been satisfactory with a mean of 3.07. Many banks expressed their hesitation due to lack of technical education among poor people. Mobile banking for financial inclusion is in its initial stages and its overall impact on financial inclusion is yet to be seen.



In order to find out the level of awareness among the customers an online survey was conducted. 112 people responded to the survey. An online questionnaire was send to the respondents asking them about their level of awareness, service preference and other information on usage of mobile banking. The data obtained from the survey is analysed and interpreted below. RESPONDENTS PROFILE 112 people responded to the survey which was conducted online. Out of 112 respondents, 92 were male whereas, 20 were female. Majority of the respondent fell in the age group of 21-30. 77 respondents belong to the student community, 23 of them are service persons and 6 each are self-employed and un-employed respectively.


AWARENESS OF MOBILE BANKING AMONG CUSTOMERS The respondents were asked to rate their level of awareness regarding mobile banking. The result of the survey is presented in a tabular form below.

H0: 60% customers are aware of Mobile Banking\

Interpretation: 41.96% of the respondents says that they are aware of mobile banking to some extent, 11.61% says large extent whereas the rest of the respondents are either unaware or have little knowledge regarding mobile banking. It can be concluded that 53.57% respondents have adequate knowledge about mobile banking.

Our assumption that 60% of customers are aware of mobile banking does not hold good. Hence the Null hypothesis is rejected Table-5: CHI-SQUARE TEST: CROSS TABULATION BETWEEN AGE AND OCCUPATION



H0: There is NO relationship between age and level of awareness H1: There is a relationship between age and level of awareness

Interpretation: Chi Square helps us to find out the dependence of one variable on another. Here, a crosstab between age and awareness have been shown above. A chi-square test was done to find out whether there is any relationship between age and level of awareness. The Pearson Chi- Square shows a sig. value of 0.039 which means that the Null hypothesis is rejected. This implies that there exist a relationship between age and level of awareness.



H0: There is NO relationship between occupation and level of awareness H1: There is a relationship between occupation and level of awareness

Table (6): showing Chi- Square test

Interpretation: The Pearson Chi-square gives a sig value of 0.327 which is less than 0.05. This signifies that there is no association between occupation of the respondent and his level of awareness. Hence the null hypothesis is accepted.



Among the survey participants 50 of them are either using or intend to use mobile banking whereas, 62 of them do not use mobile banking.

FIGURE 12 : showing usage pattern of MB Interpretation: It can be seen that the level of awareness has a direct impact on the level of adoption. 45% of the total respondents are only using mobile banking whereas; the rest did not show any interest. It was observed earlier that 53.57% of the respondents had adequate knowledge about mobile banking. So the banks should make efforts in educating the customers about the benefits of usage of mobile banking.


PREFERENCE OF MOBILE BANKING SERVICES The respondents were asked to rate their preferences of the available services which they are using or would like to use. This is done to understand the most preferred and least preferred services available. The result of the service is presented in a tabular form below.

Table7 : Showing descriptive statistics of preferences of MB services. Interpretation: The item with the lowest mean will have the highest preference whereas that with the highest mean will have the lowest preference. The result shows that Balance request is the most preferred service with a mean of 2.54, and sell and purchase of financial instrument is the least preferred service among all. It is also to be noted that none of the services is highly preferred. This may be due to some obstacles which will be examined later.


OBSTACLES The respondents were asked to choose one of the reason for not using mobile banking. The result of the survey is illustrated below.


Interpretation: The chart above shows that 42% of the respondents choose security concerns/risk as a reason for not using mobile banking. Whereas, 27% blames the uncomfortable usage of mobile device for not using mobile banking. Only 9% says that cost is one of the obstacles whereas 22% do not see any problem in using mobile banking.


SCENARIO ANALYSIS The respondents were given two scenarios and were asked to choose whether they would think of changing their bank in such a situation. Scenario I: In case your bank neither offer nor plan to offer mobile banking services `

FIGURE 14: SCENARIO ANALYSIS Interpretation: 43% of the respondents are willing to change their bank account if their banks are neither offering, nor planning to offer mobile banking service. 57 % remained loyal with their banks and chose to remain with their respective banks irrespective of any mobile service offerings.


Scenario 2: In case your banks mobile services are costlier than other banks

Interpretation: The chart above shows that 46% are willing to change their bank if their mobile service offering is costlier than others whereas, 54% decided to remain with their banks. It is to be noted that in the later part of the research we will see that none of the banks are charging any fee for their mobile offerings. So presently, the second scenario will not hurt the banks in short term. But if they contemplate upon charging any fee then they may face loss of customers if the fee is higher than others.



H1 Significance of MB for banks is dependent upon the objective it fulfils Accepted H2 60% Customers are aware of mobile banking H3 There is no relationship between age and level of awareness H4 There is a relationship between age and level of awareness H5 There is no relationship between occupation and level of awareness H6 There is a relationship between occupation and level of awareness Rejected Rejected Accepted Accepted Rejected





All the 14 banks are offering mobile banking services to their existing customers 56 % of the banks surveyed are offering mobile banking services for less than 3 years. Out of this 35 % have started the service recently i.e. less than one year. 21.43% of the banks are offering MB service for more than 5 years. In majority of the banks , only 0-5 % of the customers are using MB services Only 2 out of 14 banks are charging for MB services whereas, rest of the banks are providing this service for free In the field of mobile accounting: money transfer and remittances have been offered extensively. Other services were often offered by some and were at planning stage for many, thereby signalling increased activity in this field Mobile brokerage received a mixed response as many are still planning to offer this service and a few thinks that it is unsuitable for mobile banking The significance of mobile banking for Indian banks is dependent upon the objectives it fulfils for them; this hypothesis was accepted by testing it through a regression analysis Attracting new customers, better customer relation management and fostering innovative image and increased turnover are among the most important objectives that banks are trying to achieve through mobile banking Cost reduction is ranked below in the perceived objectives of Mobile banking Most of the banks are targeting students and business professional for their offerings; Higher management and self-employed people are also targeted by few of the banks Banks refrain from advertising mobile banking as 65% of the respondents first wished to carefully test the response of the customers 72 % of the banks surveyed are offering MB for the purpose of financial inclusion whereas , the rest are planning to launch it soon, signalling the importance of MB in the area of financial inclusion Few banks think that Micro credit and repayment of loan is unsuitable through mobile banking for the purpose of financial inclusion Transfer/remittances and deposits/withdrawals are two services which every bank is likely to offer 67

It was observed from the interview of the participants that banks are refraining from pushing MB for Financial Inclusion owing to lack of awareness and complicated usage of mobile technology among poor

The overall performance of MB in the area of mobile banking is in the range of neutral-satisfactory Mobile banking was seen by many as a useful instrument of differentiation vis-a-vis rivals All banks expected mobile banking to establish itself as an important channel of distribution in medium to long run



Out of the 112 respondents 82% were male and 18% were female. Majority of the respondents were students and fell in the age group of 21-30 Around 50% of the respondents had adequate information regarding mobile banking. Others have very little or no knowledge about the mobile service offerings A relationship was observed between age and level of awareness among the customers. A similar relationship could not be formed between the occupation and level of awareness 55% of the respondents have used or intended to use mobile banking services whereas, 45% showed no intentions to use the banking service on mobile Balance request and bill payments are the most preferred banking service on mobile followed by stop payment request The respondents remained neutral on their preference to use transfer and remittances through mobile whereas, selling and purchasing of financial instrument through mobile was the least preferred among all Security concerns has been seen as one of the major obstacle to mobile banking 46% of the respondents said that they could conceive to change their bank if their banks charges on mobile banking are higher than others


The research tried to explore the strategic implication of mobile banking for Indian banks and find out the level of awareness among the customers to make necessary recommendations to the banks so that they can take strategic decisions in future. It is evident from the research that banks have identified mobile banking as an important instrument to foster an innovative image and increase their turnover. There is low level of awareness among customers and bank should try and fill this gap by proper advertisement of their services. Banks like Syndicate Bank are holding seminars and interacting with students as a measure to attract more and more people to use their mobile banking services. Banks should also identify the opportunity to tap the rural market by using simple procedure of mobile banking for the rural people. Lack of technical awareness among the poor people may be a hindrance in the process of enforcing mobile banking for the purpose of financial inclusion. Mobile banking is still in its initial stage and its impact on the overall banking system is yet to be seen in India. Mobile Banking, as has been demonstrated, has gained nonnegligible relevance for banks today. Developments in the banking sector, e.g. increased competition on account of technological developments coupled with the process of globalisation have produced new challenges for banks. Mobile Banking presents an opportunity for banks to retain their existing, technology-savvy customer base by offering value-added, innovative services. It might even help attracting new customers. Further, Mobile Banking presents a chance to generate additional revenues. Its main contribution, however, can be expected to take place in the strategic field as it is all set to become an instrument of differentiation. Many banks recognize this threat and are already taking preventive measures by introducing mobile services. The foremost significance of Mobile Banking would therefore be of a defensive nature. Instead of providing a positive differentiation, Mobile Banking would be employed to thwart negative differentiation vis-avis rivals. Mobile Banking seems to possess the potential to become one of the widely spread and accepted application in the field of Mobile Commerce, particularly in the backdrop of its high acceptance across commercially important sections of the society. We may expect to see Mobile Banking go into the footsteps of Online Banking, i.e. to become a standard service offered by every bank worth its name.




This study has been of great importance as it helped to understand mobile banking from different perspective. The range of services provided by the banks and their innate objectives has also been highlighted to understand the strategies of banks in the area of mobile banking. This study has also helped in understanding the needs and awareness of the customers which will help the banks to formulate their advertising strategy in a better way.





Only Public sectors and private sector banks participated in the survey. Foreign banks refused to participate in the survey which may have influence the result of the survey Data from only 14 banks could be collected as many banks did not cooperate with us during the survey The data were only collected from urban customers so the results cannot be generalized to pan India population


Further study can be done to compare and contrast the performance of the banks before and after launching mobile banking. A study can be done to test whether the awareness level of the customers have increased or not. Further study can also be done to test the overall performance of mobile banking in the area of financial inclusion.





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StephanBuse, Cornelius Herstatt 2006 Customer on the Move: Strategic Implications of Mobile Banking for Banks and Financial Enterprises Saeed Khan 2009 The new way of Banking: India's Mobile Banking initiatives Arvind Ashta 2010 Evolution of Mobile Banking Regulations Dr.K.Martina Rani 2010 Mobile Banking: A Tool of Financial Inclusion for India,2010 Francese Prior and Javier Santoma 2010 Banking the unbanked using prepaid platforms and mobile telephones in the United States Nishant Joshi, Dr RK Sharma, Neha Joshi 2010 Empirics of the Exploit and Recognition of Mobile Banking: A New Pragmatic Maxim Ignacio Mas 2010 Savings for the Poor: Banking on mobile phones Prerna sharma and Preeti singh 2011 Issues & Challenges in Mobile Banking In India: A Customers Perspective,2011-12 Wayne D. Hoyer, Deborah J. Macinnis, Consumer Behavior Consumer Behaviour By Ray Wright

RESEARCH PAPER: o Issues & Challenges in Mobile Banking In India: A Customers' Perspective by Prerna Sharma Bamoriya, Preeti Singh o Mobile Banking in India: Practices,Challenges and Security Issues by Vishal Goyal, Dr.U.S.Pandey, Sanjay Batra o - Research Scholar Singhania University 76

o Mobile Banking As Technology Adoption

And Challenges By Archana

Sharma - Institute of Technology and Science, Ghaziabad. WEBSITE: www.google.com www.rbi.gov.in www.iba.com www.scribd.com www.sbi.co.in