1.

INTRODUCTION
MOBILE BANKING (also known as M- banking, SMS banking etc.) is a ter !se" #or
$er#oring balance c%ecks, acco!nt transactions, $a&ents etc. 'ia a obile "e'ice s!c% as a
mobile phone. Mobile banking to"a& is ost o#ten $er#ore" 'ia SMS or t%e Mobile Internet
b!t can also !se s$ecial $rogras calle" clients "ownloa"e" to t%e obile "e'ice. Mobile
banking is a wa& #or t%e c!stoer to $er#or banking actions on %is or %er cell $%one or ot%er
obile "e'ice. It is also known as M-Banking or SMS Banking. Mobile banking allows t%e !ser
to log into %is or %er acco!nt #ro a cell $%one, an" t%en !se t%e $%one to ake $a&ents, c%eck
balances, trans#er one& between acco!nts, noti#& t%e bank o# a lost or stolen cre"it car", sto$
$a&ent on a c%eck, recei'e a new (IN, or 'iew a ont%l& stateent, aong ot%er transactions.
)%is t&$e o# banking is eant to be ore con'enient #or t%e cons!er t%an %a'ing to $%&sicall&
go into a bank, log on #ro t%eir %oe co$!ter, or ake a $%one call. *%ile all o# t%is is tr!e,
soe are concerne" abo!t t%e sec!rit& o# obile banking.

+
ORIGIN
Mobile banking $robabl& %a" its origin in No'eber +,-..In In"ia, t%e #irst bank on w%eel was
la!nc%e" b& t%e bank o# (atiala in +,/0. Internet banking %el$e" gi'e t%e c!stoer1s an&tie
access to t%eir banks. 2!stoers co!l" c%eck o!t t%eir acco!nt "etails, get t%eir bank stateents,
$er#or transactions like trans#erring one& to ot%er acco!nts an" $a& t%eir bills sitting in t%e
co#ort o# t%eir %oes an" o##ices. 3owe'er t%e biggest liitation o# Internet banking is t%e
re4!ireent o# a (2 wit% an Internet connection, not a big obstacle i# we look at t%e 5S an" t%e
E!ro$ean Mobile banking 6 )%e 7!t!re *%ite (a$er O'er'iew Abstract )%is $a$er "escribes t%e
basic conce$ts, ser'ices o##ere", arket s!r'e& an" tec%nolog& w%ic% enables Mobile banking.
O'er t%e last #ew &ears, t%e obile an" wireless arket %as been one o# t%e #astest growing
arkets in t%e worl" an" it is still growing at a ra$i" $ace. )%is o$ens !$ %!ge arkets #or
#inancial instit!tions intereste" in o##ering 'al!e a""e" ser'ices. *it% obile tec%nolog&, banks
can o##er a wi"e range o# ser'ices to t%eir c!stoers s!c% as "oing #!n"s trans#er w%ile tra'eling,
recei'ing online !$"ates o# stock $rice or e'en $er#oring stock tra"ing w%ile being st!ck in
tra##ic. Mobile "e'ices, es$eciall& sart-$%ones, are t%e ost $roising wa& to reac% t%e asses
an" to create 8stickiness9 aong c!rrent c!stoers, "!e to t%eir abilit& to $ro'i"e ser'ices
an&tie, an&w%ere, wit% %ig% rate o# $enetration an" $otential to grow. :oc!ent A!"ience )%is
"oc!ent is $riaril& inten"e" #or Marketing, Sales, (ro"!ct S!$$ort, Internet Ser'ices Gro!$,
(ro;ect Engineering an" an&one w%o is intereste" in Mobile banking. Mobile banking a""resses
t%is #!n"aental liitation o# Internet banking, as it re"!ces t%e c!stoer re4!ireent to ;!st a
obile $%one. Mobile !sage %as seen an e<$losi'e growt% in ost o# t%e Asian econoies like
In"ia, 2%ina an" Korea.
=
)%e ain reason t%at
Mobile banking scores o'er Internet banking is t%at it enables
>An&w%ere An&tie banking1. 2!stoers "on1t nee" access to a co$!ter
terinal to access t%eir bank acco!nts, now t%e can "o so on-t%e-go w%ile waiting #or t%e b!s to
work, tra'elling or w%en t%e& are waiting #or t%eir or"ers to coe t%ro!g% in a resta!rant. )%e
scale at w%ic% Mobile banking %as t%e $otential to grow can be ga!ge" b& looking at t%e $ace
!sers are getting obile in t%ese big Asian econoies. Accor"ing to t%e 2ell!lar O$erators1
Association o# In"ia (2OAI) t%e obile s!bscriber base in In"ia %it -0.. illion in t%e A!g!st
=00-. In Se$teber =00- it a""e" abo!t +.?/illion ore. )%e e<$losion as ost anal&sts sa&, is
&et to coe as In"ia %as abo!t one o# t%e biggest !nta$$e" arkets. 2%ina, w%ic% alrea"&
witnesse" t%e obile boo, is e<$ecte" to %a'e abo!t @00 illion obile !sers b& t%e en" o#
=00-. All o# t%ese co!ntries %a'e seen gra"!al roll-o!t o# obile banking ser'ices, t%e ost
aggressi'e being Korea w%ic% is now witnessing t%e roll-o!t o# soe o# t%e ost a"'ance"
ser'ices like !sing obile $%ones to $a& bills in s%o$s an" resta!rants.
Definition of Mobile Banking:
Mobile banking i !efine! a:
AMobile Banking re#ers to $ro'ision an" a'ailent o# banking- an" #inancial ser'ices wit% t%e
%el$ o# obile teleco!nication "e'ices. )%e sco$e o# o##ere" ser'ices a& incl!"e #acilities
to con"!ct bank an" stock arket transactions, to a"inister acco!nts an" to access 2!stoise"
in#oration.A
@
2. Mobile Banking Conceptual Model
Accor"ing to t%is o"el Mobile Banking can be sai" to consist o# t%ree inter-relate" conce$tsB
Mobile "##o$nting
Mobile Brokerage
Mobile %inan#ial Information Ser&i#e
Most ser'ices in t%e categories "esignate" "##o$nting an" Brokerage are transaction-base".
)%e non-transaction-base" ser'ices o# an in#orational nat!re are %owe'er essential #or
con"!cting transactions - #or instance, balance in4!iries ig%t be nee"e" be#ore coitting a
one& reittance. )%e acco!nting an" brokerage ser'ices are t%ere#ore o##ere" in'ariabl& in
cobination wit% in#oration ser'ices. In#oration ser'ices, on t%e ot%er %an", a& be o##ere"
as in"e$en"ent o"!le. Mobile $%one banking a& also be !se" to %el$ in b!siness sit!ations.
Tren! in mobile banking
)%e a"'ent o# t%e Internet %as enable" new wa&s to con"!ct banking b!siness, res!lting in t%e
creation o# new instit!tions, s!c% as online banks, online brokers an" wealt% anagers. S!c%
instit!tions still acco!nt #or a tin& $ercentage o# t%e in"!str&.
O'er t%e last #ew &ears, t%e obile an" wireless arket %as been one o# t%e #astest growing
arkets in t%e worl" an" it is still growing at a ra$i" $ace. Accor"ing to t%e GSM "o#iation
an" O&$m, t%e n!ber o# obile s!bscribers e<cee"e" = billion in Se$teber =00/, an"
nowe<cee"s =./ billion (o# w%ic% ore t%an = billion are GSM).
*it% obile tec%nolog&, banks can o##er ser'ices to t%eir c!stoers s!c% as "oing #!n"s trans#er
w%ile tra'elling, recei'ing online !$"ates o# stock $rice or e'en $er#oring to#k tra!ing w%ile
being st!ck in tra##ic. Smartphone an" 'Gconnecti'it& $ro'i"e soe ca$abilities t%at ol"er
te<t essage-onl& $%ones "o not.Accor"ing to a st!"& b& #inancial cons!ltanc& Celent, @/C o#
online banking %o!se%ol"s will be !sing obile banking b& =0+0, !$ #ro less t%an +C to"a&.
-
5$war"s o# D0C o# bank center call 'ol!e is $ro;ecte" to coe #ro obile $%ones. Mobile
banking will e'ent!all& allow !sers to ake $a&ents at t%e $%&sical point of ale. AMobile
#onta#tle pa(ment9 will ake !$ +0C o# t%e contactless arket b& =0+0. Anot%er st!"&
#ro =0+0 b& Berg Inight #orecasts t%at t%e n!ber o# obile banking !sers in t%e 5S will
grow #ro += illion in =00, to ?. illion in =0+/. )%e sae st!"& also $re"icts t%at t%e
E!ro$ean arket will grow #ro D illion obile banking !sers in =00, to ++/ illion !sers in
=0+/.
Man& belie'e t%at obile !sers %a'e ;!st starte" to #!ll& !tiliEe t%e "ata ca$abilities in t%eir
mobile phone. In Asian co!ntries like In!ia, China, Bangla!eh,
In!oneia an" )hilippine , w%ere obile in#rastr!ct!re is co$arati'el& better t%an t%e #i<e"-
line in#rastr!ct!re, an" in *$ropean co!ntries, w%ere obile $%one $enetration is 'er& %ig% (at
least ?0C o# cons!ers !se a obile $%one), obile banking is likel& to a$$eal e'en ore.
Mobile banking b$ine mo!el
A wi"e s$ectr! o# MobileFbranc%less banking o"els is e'ol'ing. )%ese o"els "i##er
$riaril& on t%e 4!estion t%at w%o will establis% t%e relations%i$ (acco!nt o$ening, "e$osit
taking, len"ing etc.) to t%e en" c!stoer, t%e bank or t%e Non-bank F)eleco!nication
2o$an& ()elco). Anot%er "i##erence lies in t%e nat!re o# agenc& agreeent between bank an"
t%e Non- bank. Mo"els o# branc%less banking can be classi#ie" into t%ree broa" categories - bank
7oc!se", bank -Le" an" Non-bank -Le".
I. Bank +fo#$e! mo!el:
)%e bank -#oc!se" o"el eerges w%en a tra"itional bank !ses non-tra"itional low-cost "eli'er&
c%annels to $ro'i"e banking ser'ices to its e<isting c!stoers. E<a$les range #ro !se o#
a$tomati# teller ma#hine (A)Ms) to internet banking or obile $%one banking to $ro'i"e
/
certain liite" banking ser'ices to bankGsG c!stoers. )%is o"el is a""iti'e in nat!re an" a&
be seen as a o"est e<tension o# con'entional branc%-base" banking.
II. Bank +le! mo!el:
)%e bank -le" o"el o##ers a "istinct alternati'e to con'entional branc%-base" banking in t%at
c!stoer con"!cts #inancial transactions at a w%ole range o# retail agents (or t%ro!g% obile
$%one) instea" o# at bank branc%es or t%ro!g% bank e$lo&ees. )%is o"el $roises t%e
$otential to s!bstantiall& increase t%e #inancial ser'ices o!treac% b& !sing a "i##erent "eli'er&
c%annel (retailersF obile $%ones), a "i##erent tra"e $artner ()elco F c%ain store) %a'ing
e<$erience an" target arket "istinct #ro tra"itional banks, an" a& be signi#icantl& c%ea$er
t%an t%e bank -base" alternati'es. )%e bank -le" o"el a& be i$leente" b& eit%er !sing
corres$on"ent arrangeents or b& creating a HI between bank an" )elcoFnon-bank. In t%is o"el
c!stoer acco!nt relations%i$ rests wit% t%e n bank @ Non-bank -le" o"el.
)%e non- bank -le" o"el is w%ere a bank "oes not coe into t%e $ict!re (e<ce$t $ossibl& as a
sa#e-kee$er o# s!r$l!s #!n"s) an" t%e non- bank (e.g. )elco) $er#ors all t%e #!nctions.
.
'.Mobile Banking Ser&i#e
Mobile banking can o##er ser'ices s!c% as t%e #ollowingB
I. "##o$nt Information
1. Mini-stateents an" c%ecking o# acco!nt %istor&
2. Alerts on acco!nt acti'it& or $assing o# set t%res%ol"s
3. Monitoring o# ter "e$osits
4. Access to loan stateents
5. Access to car" stateents
6. M!t!al #!n"s F e4!it& stateents
7. Ins!rance $olic& anageent
8. (ension $lan anageent
9. Stat!s on c%e4!e, sto$ $a&ent on c%e4!e
II. )a(ment , Tranfer
1. :oestic an" international #!n" trans#ers
2. Micro-$a&ent %an"ling
3. Mobile rec%arging
4. 2oercial $a&ent $rocessing
5. Bill $a&ent $rocessing
6. (eer to (eer $a&ents
III. In&etment
1. (ort#olio anageent ser'ices
2. Jeal-tie stock 4!otes
3. (ersonaliEe" alerts an" noti#ications on sec!rit& $rices
D
I-. S$pport
1. Stat!s o# re4!ests #or cre"it, incl!"ing ortgage a$$ro'al, an" ins!rance co'erage
2. 2%eck (c%e4!e) book an" car" re4!ests
3. E<c%ange o# "ata essages an" eail, incl!"ing co$laint s!bission an" tracking
4. A)M Location
-. Content Ser&i#e
1. General in#oration s!c% as weat%er !$"ates, news
2. Lo&alt&-relate" o##ers
3. Location-base" ser'ices
Base" on a s!r'e& con"!cte" b& 7orrester, obile banking will be attracti'e ainl& to t%e
&o!nger, ore Atec%-sa''&A c!stoer segent. A t%ir" o# obile $%one !sers sa& t%at t%e& a&
consi"er $er#oring soe kin" o# #inancial transaction t%ro!g% t%eir obile $%one. B!t ost o#
t%e !sers are intereste" in $er#oring basic transactions s!c% as 4!er&ing #or acco!nt balance
an" aking bill $a&ent.
4.
?
Challenge for a Mobile banking Sol$tion
Ke& c%allenges in "e'elo$ing a so$%isticate" obile banking a$$lication areB
I. Interoperabilit(:
)%ere is a lack o# coon tec%nolog& stan"ar"s #or obile banking. Man& $rotocols are being
!se" #or obile banking 6 .TM/, 0"), SO"), 1M/ to nae a #ew. It wo!l" be a wise
i"ea #or t%e 'en"or to "e'elo$ a obile banking a$$lication t%at can connect !lti$le banks. It
wo!l" re4!ire eit%er t%e a$$lication to s!$$ort !lti$le $rotocols or !se o# a coon an"
wi"el& acce$table set o# $rotocols #or "ata e<c%ange.
)%ere are a large n!ber o# "i##erent obile $%one "e'ices an" it is a big c%allenge #or banks to
o##er obile banking sol!tion on an& t&$e o# "e'ice. Soe o# t%ese "e'ices s!$$ort H=ME an"
ot%ers s!$$ort *A( browser or onl& SMS.
O'ercoing intero$erabilit& iss!es %owe'er %a'e been localiEe", wit% co!ntries like In"ia !sing
$ortals like J-*orl" to enable t%e liitations o# low en" ;a'a base" $%ones, w%ile #oc!s on areas
s!c% as So!t% A#rica %a'e "e#a!lte" to t%e 5SS: as a basis o# co!nication ac%ie'able wit%
an& $%one.
)%e "esire #or intero$erabilit& is largel& "e$en"ent on t%e banks t%esel'es, w%ere installe"
a$$lications (Ha'a base" or nati'e) $ro'i"e better sec!rit&, are easier to !se an" allow
"e'elo$ent o# ore co$le< ca$abilities siilar to t%ose o# internet banking w%ile SMS can
$ro'i"e t%e basics b!t becoes "i##ic!lt to o$erate wit% ore co$le< transactions.
II. S#alabilit( , Reliabilit(:
Anot%er c%allenge #or t%e CIO2 an" CTO o# t%e banks is to scale-!$ t%e obile banking
in#rastr!ct!re to %an"le e<$onential growt% o# t%e c!stoer base. *it% obile banking, t%e
c!stoer a& be sitting in an& $art o# t%e worl" (tr!e an&tie, an&w%ere banking) an" %ence
bankGs nee" to ens!re t%at t%e s&stes are !$ an" r!nning in a tr!e =- < D #as%ion. As c!stoers
,
will #in" obile banking ore an" ore !se#!l, t%eir e<$ectations #ro t%e sol!tion will
increase. BankGs !nable to eet t%e $er#orance an" reliabilit& e<$ectations a& lose c!stoer
con#i"ence.
III. "ppli#ation !itrib$tion:
:!e to t%e nat!re o# t%e connecti'it& between bank an" its c!stoers, it wo!l" be i$ractical to
e<$ect c!stoers to reg!larl& 'isit bank s or connect to a web site #or reg!lar !$gra"e o# t%eir
obile banking a$$lication. It will be e<$ecte" t%at t%e obile a$$lication itsel# c%eck t%e
!$gra"es an" !$"ates an" "ownloa" necessar& $atc%es (so calle" O&er The "ir !$"ates).
3owe'er, t%ere co!l" be an& iss!es to i$leent t%is a$$roac% s!c% as !$gra"e F
s&nc%roniEation o# ot%er "e$en"ent co$onents.
I-. )eronali3ation:
It wo!l" be e<$ecte" #ro t%e obile a$$lication to s!$$ort $ersonaliEation s!c% asB
1. (re#erre" Lang!age
2. :ate F )ie #orat
3. Ao!nt #orat
4. :e#a!lt transactions
5. Stan"ar" Bene#iciar& list.
+0
4. Mobile banking in the 5orl!
Mobile banking %as coe in %an"& in an& $arts o# t%e worl" wit% little or no In#rastr!ct!re
"e'elo$ent, es$eciall& in reote an" r!ral areas. )%is $art o# t%e obile coerce is also 'er&
$o$!lar in co!ntries w%ere ost o# t%eir $o$!lation is !nbanke". In ost o# t%ese $laces banks
can onl& be #o!n" in big cities an" c!stoers %a'e to tra'el %!n"re"s o# iles to t%e nearest bank
.2o!ntries like S!"an, G%ana an" So!t% A#rica recei'e" t%is new coerce 'er& well. In Latin
Aerica co!ntries like 5r!g!a&, (arag!a&, Argentina, BraEil, IeneE!ela, 2olobia, G!ateala
an" recentl& Me<ico starte" wit% a %!ge s!ccess. In Iran banks like (arsian, )e;arat, Mellat,
Sa"erat, Se$a%, e"bi an" bank elli o##er t%is ser'ice. G!ateala %as t%e s!$$ort o# Banco
in"!strial. Me<ico release" t%e obile coerce wit% Onili#e, Bancoer an" a $ri'ate
co$an& (M(ower Ient!res). Ken&a1s Sa#arico ((art o# t%e Io"a#one Gro!$) %as %a" t%e 'er&
$o$!lar M-(esa Ser'ice - ainl& !se" to trans#er liite" ao!nts o# one&, b!t %as been
increasingl& !se" to $a& !tilit& bills. Kain in =00, la!nc%e" t%eir own obile one& trans#er
b!siness known as KA( in Ken&a an" ot%er A#rican co!ntries.
Te#hnologie Behin! Mobile Banking
)ec%nicall& s$eaking ost o# t%ese ser'ices can be "e$lo&e" !sing ore t%an one c%annel.
(resentl&, Mobile Banking is being "e$lo&e" !sing obile a$$lications "e'elo$e" on one o# t%e
#ollowing fo$r c%annels.
1. IIJ (Interacti'e Ioice Jes$onse)
2. SMS (S%ort Messaging Ser'ice)
3. *A( (*ireless Access (rotocol)
4. Stan"alone Mobile A$$lication 2lients
++
I. I-R+ Intera#ti&e -oi#e Repone:
IIJ or Interacti'e Ioice Jes$onse ser'ice o$erates t%ro!g% $re-s$eci#ie" n!bers t%at banks
a"'ertise to t%eir c!stoers. 2!stoer1s ake a call at t%e IIJ n!ber an" are !s!all& greete"
b& a store" electronic essage #ollowe" b& a en! o# "i##erent o$tions. 2!stoers can c%oose
o$tions b& $ressing t%e corres$on"ing n!ber in t%eir ke&$a"s, an" are t%en rea" o!t t%e
corres$on"ing in#oration, ostl& !sing a te<t to s$eec% $rogra.
Mobile banking base" on IIJ %as soe a;or liitations t%at t%e& can be !se" onl& #or En4!ir&
base" ser'ices. Also, IIJ is ore e<$ensi'e as co$are" to ot%er c%annels as it in'ol'es aking
a 'oice call w%ic% is generall& ore e<$ensi'e t%an sen"ing an SMS or aking "ata trans#er (as
in *A( or Stan"alone clients).
One wa& to enable IIJ is b& "e$lo&ing a (BL s&ste t%at can %ost IIJ "ial $lans. Banks
looking to go t%e low cost wa& s%o!l" consi"er e'al!ating Asterisk, w%ic% is an o$en so!rce
Lin!< (BL s&ste.
II. SMS 6 Short Meaging Ser&i#e:
SMS !ses t%e $o$!lar te<t-essaging stan"ar" to enable obile a$$lication base" banking. )%e
wa& t%is works is t%at t%e c!stoer re4!ests #or in#oration b& sen"ing an SMS containing a
ser'ice coan" to a $re-s$eci#ie" n!ber. )%e bank res$on"s wit% a re$l& SMS containing t%e
s$eci#ic in#oration.
7or e<a$le, c!stoers o# t%e 3:72 Bank in In"ia can get t%eir acco!nt balance "etails b&
sen"ing t%e ke&wor" >3:72BAL1 an" recei'e t%eir balance in#oration again b& SMS.
3owe'er t%ere %a'e been #ew instances w%ere e'en transaction-base" ser'ices %a'e been a"e
a'ailable to c!stoer !sing SMS. 7or instance, c!stoers o# t%e 2ent!rion Bank o# (!n;ab can
ake #!n" trans#er b& sen"ing t%e SMS >)JN (AFc No) ((IN No) (Ao!nt)1.
+=
One o# t%e a;or reasons t%at transaction base" ser'ices %a'e not taken o# on SMS is beca!se o#
concerns abo!t sec!rit&. )%e ain a"'antage o# "e$lo&ing obile a$$lications o'er SMS is t%at
alost all obile $%ones are SMS enable".An SMS base" ser'ice is %oste" on a SMS gatewa&
t%at #!rt%er connects to t%e Mobile ser'ice $ro'i"ers SMS 2entre. )%ere are a co!$le o# %oste"
I( base" SMS gatewa&s a'ailable in t%e arket an" also soe o$en so!rce ones like Kannel.
SMS Net5ork "r#hite#t$re
+@
III.0") 6 0irele "##e )roto#ol:
*A( !ses a conce$t siilar to t%at !se" in Internet banking. Banks aintain *A( sites w%ic%
c!stoer1s access !sing a *A( co$atible browser on t%eir obile $%ones. *A( sites o##er t%e
#ailiar #or base" inter#ace an" can also i$leent sec!rit& 4!ite e##ecti'el&.
Bank o# Aerica o##ers a *A( base" ser'ice c%annel to its c!stoers in 3ong Kong. )%e banks
c!stoers can now %a'e an an&tie, an&w%ere access to a sec!re reliable ser'ice t%at allows
t%e to access all en4!ir& an" transaction base" ser'ices an" also ore co$le< transaction like
tra"e in sec!rities t%ro!g% t%eir $%one A *A( base" ser'ice re4!ires %osting a *A( gatewa&.
Mobile A$$lication !sers access t%e bank1s site t%ro!g% t%e *A( gatewa& to carr& o!t
transactions, !c% like internet !sers access a web $ortal #or accessing t%e banks ser'ices.
)%e #ollowing #ig!re "eonstrates t%e #raework #or enabling obile a$$lications o'er *A(.
)%e act!all& #ors t%at go into a obile a$$lication are store" on a *A( ser'er, an" ser'e" on
"ean". )%e *A( Gatewa& #ors an access $oint to t%e internet #ro t%e obile network.
0") Net5ork "r#hite#t$re for Mobile "ppli#ation
+-
I-. Stan!alone Mobile "ppli#ation Client:
Stan"alone obile a$$lications are t%e ones t%at %ol" o!t t%e ost $roise as t%e& are ost
s!itable to i$leent co$le< banking transactions like tra"ing insec!rities. )%e& can be easil&
c!stoiEe" accor"ing to t%e !ser inter#ace co$le<it& s!$$orte" b& t%e obile. In a""ition,
obile a$$lications enable t%e i$leentation o# a 'er& sec!re an" reliable c%annel o#
co!nication.
One re4!ireent o# obile a$$lications clients is t%at t%e& re4!ire to be "ownloa"e" on t%e
client "e'ice be#ore t%e& can be !se", w%ic% #!rt%er re4!ires t%e obile "e'ice to s!$$ort one o#
t%e an& "e'elo$ent en'ironents like H=ME or M!alco1s BJE*. H=ME is #ast becoing
an in"!str& stan"ar" to "e$lo& obile a$$lications an" re4!ires t%e obile $%one to s!$$ort
Ha'a. )%e a;or "isa"'antage o# obile a$$lication clients is t%at t%e a$$lications nee"s to be
c!stoiEe" to eac% obile $%one on w%ic% it ig%t #inall& r!n.
+/
6. Advantage & Disadvantage of Mobile Banking
"!&antage:
1. )%e biggest a"'antage t%at obile banking o##ers to bank s is t%at it "rasticall& c!ts
"own t%e costs o# $ro'i"ing ser'ice to t%e c!stoers. 7or e<a$le an a'erage teller
or $%one transaction costs abo!t N=.@. eac%, w%ereas an electronic transaction costs
onl& abo!t N0.+0 eac%. A""itionall&, t%is new c%annel gi'es t%e bank abilit& to cross-
sell !$-sell t%eir ot%er co$le< banking $ro"!cts an" ser'ices s!c% as 'e%icle loans,
cre"it car"s etc.
2. 7or ser'ice $ro'i"ers, Mobile banking o##ers t%e ne<t s!rest wa& to ac%ie'e growt%.
2o!ntries like Korea w%ere obile $enetration is nearing sat!ration, obile banking
is %el$ing ser'ice $ro'i"ers increase re'en!es #ro t%e now static s!bscribers !se.
Ser'ice $ro'i"ers are increasingl& !sing t%e co$le<it& o# t%eir s!$$orte" obile
banking ser'ices to attract new c!stoers an" retain ol" ones.
3. A 'er& e##ecti'e wa& o# i$ro'ing c!stoer ser'ice co!l" be to in#or c!stoers
better. 2re"it car" #ra!" is one s!c% area.
4. A bank co!l", t%ro!g% t%e !se o# obile tec%nolog&, in#or owners eac% tie
$!rc%ases abo'e a certain 'al!e %a'e been a"e on t%eir car". )%is wa& t%e owner is
alwa&s in#ore" w%en t%eir car" is !se", an" %ow !c% one& was taken #or eac%
transaction. Siilarl&, t%e bank co!l" rein" c!stoers o# o!tstan"ing loan
re$a&ent "ates #or t%e $a&ent o# ont%l& installents or si$l& tell t%e t%at a
bill %as been $resente" an" is !$ #or $a&ent. )%e c!stoers can t%en c%eck t%eir
balance on t%e $%one an" a!t%oriEe t%e re4!ire" ao!nts #or $a&ent.
5. )%e c!stoers can also re4!est #or a""itional in#oration. )%e& can a!toaticall&
'iew "e$osits an" wit%"rawals as t%e& occ!r an" also $re- sc%e"!le $a&ents to be
+.
a"e or c%e4!es to be iss!e".
6. Siilarl&, one co!l" also re4!est #or ser'ices like sto$ c%e4!e or iss!e o# a c%e4!e
book o'er oneGs obile $%one.
7. )%ere are n!ber o# reasons t%at s%o!l" $ers!a"e bank s in #a'or o# obile $%ones.
8. )%e& are set to becoe a cr!cial $art o# t%e total banking ser'ices e<$erience #or t%e
c!stoers.
9. Also, t%e& %a'e t%e $otential to bring "own costs #or t%e bank itsel#. )%ro!g% obile
essaging an" ot%er s!c% inter#aces, bank s $ro'i"es 'al!e a""e" ser'ices to t%e
c!stoer at arginal costs.
10. S!c% essages also bear t%e 'irt!e o# being targete" an" $ersonal aking t%e ser'ices
o##ere" ore e##ecti'e. )%e& will also carr& better res!lts on acco!nt o# better
c!stoer $ro#iling.
11. Oet anot%er bene#it is t%e an&w%ereFan&tie c%aracteristics o# obile ser'ices. A
obile is alost alwa&s wit% t%e c!stoer. As s!c% it can be !se" o'er a 'ast
geogra$%ical area. )%e c!stoer "oes not %a'e to 'isit t%e bank A)M or a branc% to
a'ail o# t%e bankGs ser'ices. Jesearc% in"icates t%at t%e n!ber o# #oot#alls at a
bankGs branc% %as #allen "own "rasticall& a#ter t%e installation o# A)Ms.
12. As s!c% wit% obile ser'ices, a bank will nee" to %ire e'en less e$lo&ees as $eo$le
will no longer nee" to 'isit bank branc%es a$art #ro certain occasions.
13. *it% In"ian teleco o$erators working on o##ering ser'ices like one& transaction.
O'er a obile, it a& soon be $ossible #or a bank to o##er $%one-base" cre"it
s&stes.
14. )%is will ake cre"it car"s re"!n"ant an" also ai" in c%ecking cre"it car". 7ra!"
a$art #ro o##ering en%ance" c!stoer con'enience. )%e !se o# obile )ec%nologies
+D
is t%!s a win-win $ro$osition #or bot% t%e bank s an" t%e bankGs 2!stoers.
15. )%e banks a"" to t%is $ersonaliEe" co!nication t%ro!g% t%e $rocess o#
A!toation. 7or instance, i# t%e c!stoer asks #or %is acco!nt or car" balance a#ter
con"!cting a transaction, t%e installe" so#tware can sen" %i an a!toate" re$l&
in#oring o# t%e sae. )%ese a!toate" re$lies t%!s sa'e t%e bank t%e nee" to %ire
A""itional e$lo&ees #or ser'icing c!stoer nee"s.
16. 5se banking #acilities an&w%ere, e'en #ar awa& #ro a bank .Eas& o$eration 6 access
acco!nts #ro a cell $%one. Lower o$erational costs (#or bank s) t%an setting !$ A)M
ac%ines.
+?
Dia!&antage:
1. Back in "a&s w%en Internet was intro"!ce", it was a boon to t%e #inancial in"!str& as it
re"!ce" all 'ol!es b& o$ening anot%er sel#-ser'ice c%annel #or ser'icing c!stoers.
2. *it% obile t%at a"'antage is not t%ere as alrea"& in'estents are a"e to re"!ce call
'ol!es !sing Internet an" Internet is one o# t%e tec%nologies t%at is e'er s$rea"ing in
c!stoer co!nit&. Alost ?0C o# t%e $eo$le in 5S alrea"& %a'e internet connection.
Mobile banking wo!l" be anot%er 'al!e a""e" ser'ice t%at can be $ro'i"e" b& #inancial
instit!tions, it a& onl& bring goo" will.
3. :e$en"ing on t%e tec%nological "irection #or enabling Mobile co$anies eit%er %as to
s$en" enoro!s ao!nt o# one& in atc%ing c!stoerGs e<$ectation or aintaining
anot%er strea o# tec%nolog& a$$lications. )ec%nolog& still %as sec!rit& iss!es an"
so#tware "istrib!tion iss!es.
Ue of mobile banking
1) (a& bills
2) )rans#er #!n"s
3) )ake ini-stateents, con"!ct balance en4!iries
4) Set alerts #or o'eent in acco!nts 6 c%ange in balance, $a&ents o# bills set on a!to
$a&ent o"e etc.
5) (!rc%ase ites 6 e.g. ABNAroGs M$ower enables &o! to s%o$
Alt%o!g% a"'ance"F%ig%-en" transactions can be con"!cte" !sing cell $%ones, ost obile
banking c!stoers !se it #or basic acti'ities like balance en4!ir&, aking $a&ents o# reg!lar
bills etc.
+,
The )oible %$t$re for Mobile Banking
)a(ment on appro&al b( SMS
)%is #eat!re allows #or ;oint acco!nts or b!siness acco!nt to %a'e a $re-"eterine" liit to
$ro$t #or eit%er s!$er'isor or ;oint acco!nt %ol"er a$$ro'al. A $a&ent re4!est is a"e #ro
t%e acco!nt to anot%er $re-noinate" acco!ntP a essage is t%en sen" to eit%er t%e s!$er'isor or
;oint acco!nt %ol"er to also a$$ro'e t%e $a&ent.
T5o+tage #onfirme! pa(ment
)%is $a&ent $rocess is siilar to a letter o# cre"it, w%en t%e en" !ser sen"s a $a&ent
instr!ction #or goo"s or ser'ices, t%e ao!nt o# t%e $a&ent will be trans#erre" to a s$eci#ic
acco!nt. )%e bene#iciar& will be noti#ie" t%at t%e ao!nt is g!arantee". Once t%e goo"s or
ser'ices are "eli'ere" t%e en" !serF$a&ee will be able to acce$t or re;ect t%e goo"sFser'ices an"
ake $a&ent accor"ingl& b& a$$ro'ing or "en&ing t%e $a&ent $rocess.
Mobile )a(ment in Retail O$tlet
5sing not%ing b!t t%eir own obile %an"set, cons!ers will be able to ake $!rc%ase" at a wi"e
'ariet& o# retail o!tlets. Let1s !se t%e s!$erarket as a coon e<a$leB t%e cons!er nee"s to
ake a $!rc%ase #ro a s!$erarket, %eFs%e goes to t%e cas%ier an" sen"s a $a&ent re4!est
along wit% %isF%er $asswor" an" t%e s$eci#ic (OS ac%ine n!ber. )%e s&ste will t%en sen"
back a :igital Mone& Se4!ence N!ber (:MSN) to t%e b!&er. *%en asking to $a& #or t%e
goo"s, t%e cas%ier will !se %isF%er s$ecial banking car", an" w%en t%e b!&er is aske" #or a
$asswor" all t%e& nee" to "o is enter t%e :MSN. As long as t%e transaction is wit%in t%e "ail&
liit o# t%e acco!nt t%e transaction will take $lace instantl&.
=0
7. *+ Banking
Intro!$#tion of *+ banking
)%e acceleration in tec%nolog& %as $ro"!ce" an
e<traor"inar& e##ect !$on o!r econo& in general %as %a" a
$artic!larl& $ro#o!n" i$act in e<$an"ing t%e sco$e an"
!tilit& o# #inancial $ro"!cts o'er t%e last ten &ears.
In#oration tec%nolog& %as a"e $ossible t%e creation,
'al!ation, an" e<c%ange o# co$le< #inancial $ro"!cts on a
global basis an"
e'en t%at ;!st in recent &ears. :eri'ati'es are ob'io!sl& t%e ost e'i"ent o# t%e an& $ro"!cts
t%at tec%nolog& %as ins$ire", b!t t%e s!bstantial increase in o!r calc!lation %as $eritte" a
'ariet& o# ot%er $ro"!cts an", ost bene#iciall&, new wa&s to !nb!n"le" risk.
*%at is reall& 4!ite e<traor"inar& is t%at t%ere is no sign t%at t%is $rocess o# acceleration in
#inancial tec%nolog& is a$$roac%ing an en". *e are o'ing at an e<ce$tionall& ra$i" $ace, #!ele"
not onl& b& t%e en%ance" at%eatical a$$lications $ro"!ce" b& o!r e'er rising co$!ting
ca$abilities b!t also b& o!r e<$an"ing teleco!nications ca$abilities an" t%e associate"
s!bstantial broa"ening o# o!r arkets.
=+
%$n#tion of *+banking
At $resent, t%e $ersonal e- bank s&ste $ro'i"es t%e #ollowing ser'icesB -
1. In8$ir( abo$t the information of a##o$nt:
)%e client in4!ires abo!t t%e "etails o# %is own acco!nt in#oration s!c% as t%e car"s F
acco!ntGs balance an" t%e "etaile" %istorical recor"s o# t%e acco!nt an" "ownloa"s t%e
re$ort list.
9. Car! a##o$nt2 tranfer:
)%e client can ac%ie'e t%e #!n" to anot%er $ersonGs 2re"it 2ar" in t%e sae cit&.
'. Bank +e#$ritie a##o$nt tranfer:
)%e client can ac%ie'e t%e #!n" trans#er between %is own bank sa'ings acco!nts o# %is own
2re"it 2ar" acco!nt an" %is own ca$ital acco!nt in t%e Sec!rities 2o$an&. Moreo'er, t%e
client can in4!ire abo!t t%e $resent balance at real tie.
:. The trana#tion of foreign e;#hange:
)%e client can tra"e t%e #oreign e<c%ange, cancel or"ers an" in4!ire abo!t t%e in#oration o# t%e
transaction o# #oreign e<c%ange accor"ing to t%e e<c%ange rate gi'en b& o!r bank on net.
4. The B9C !ib$rement on net:
)%e client can "o t%e real-tie trans#er an" get t%e #ee"back in#oration abo!t $a&ent #ro o!r
bank w%en t%e client "oes s%o$$ing in t%e a$$ointe" web-site.
<. Client er&i#e:
)%e client can o"i#& t%e login $asswor", in#oration o# t%e 2re"it 2ar" an" t%e client
in#oration in e- bank on net.
=. "##o$nt management:
)%e client can o"i#& %is own liits o# rig%t an" state o# t%e registere" acco!nt in t%e $ersonal
==
e- bank, s!c% as o"i#&ing %is own login $asswor", #reeEing or "eleting soe car"s an" so on.
?. Reporting the lo if the a##o$nt:
)%e client can
T(pe of *+ banking
re$ort t%e loss in t%e local area (not nationwi"e) w%en t%e clientGs 2re"it 2ar" or $assbook is
issing or stolen.
1. :e$osits, wit%"rawals, inter-acco!nt trans#er an" $a&ent o# linke" acco!nts at an A)MP
2. B!&ing an" $a&ing #or goo"s an" ser'ices !sing "ebit car"s or sart car"s wit%o!t %a'ing to
carr& cas% or a c%e4!es bookP
@. 5sing a tele$%one to $er#or "irect banking- ake a balance en4!ir&, inter-
acco!nt trans#ers an" $a& linke" acco!ntsP
-. 5sing a co$!ter to $er#or "irect banking- ake a balance en4!ir&, inter-
acco!nt trans#ers an" $a& linke"
"!&antage of *+Banking
1. Acco!nt In#orationB Jeal tie balance in#oration an" s!ar& o# "a&Gs transaction.
2. 7!n" )rans#erB Manage &o!r S!$$l&-2%ain network, e##ecti'el& b& !sing o!r online %an"
trans#er ec%anis. *e can a##ect #!n" trans#er on a real tie basis across t%e bank locations.
3. Je4!estB Make a banking re4!est online.
4. Acco!nt in#orationB )%e co$lete "atabase t%at t%e bank %as abo!t o!r co$an& is
a'ailable to !s at o!r terinal. It $ro'i"es !sB
2!rrent balance in o!r acco!nt on real-tie basis.
:a&Gs transactions in t%e acco!nt.
:etails o# cas% cre"it liit, "rawing $ower, ao!nt !tiliEe", etc.
5. )%e real li#e sit!ation o# !ser-wise liits an" !ltile'el signatories can be a$$e" in t%e net-
=@
base" #!n" trans#er o"!le too. *e can s$eci#& !ser-wise ca$ #or #!n" trans#er an" t%e n!ber
o# a$$ro'als nee"e" #or eac% #!n" trans#er. )%e #!n" trans#er will not take $lace !nless t%e
re4!ire" n!ber o# signatories %as a$$ro'e" it.
6. *it% a $ower o# Attorne& #ro o!r "ealers, we can link t%e "ealerGs acco!nts to o!r acco!nt
in or"er to %a'e an online #!n" trans#er, sa'ing !s tie an" one& in'ol'e" wit% c%e4!es
collections s&stes. Alternati'el&, t%e "ealer can cre"it o!r acco!nt t%ro!g% t%is c%annel.
Siilarl&, we co!l" also a##ect 'en"or an" ot%er $a&ents online.
7. 2!stoers can also s!bit t%e #ollowing re4!ests onlineB Jegistration #or acco!nt stateents
b& e-ail "ail& F weekl& F #ortnig%tl& F ont%l& basis.
Sto$ $a&ent or c%e4!es
2%e4!e book re$lenis%ent
:ean" :ra#t F (a&-or"er
O$ening o# #i<e" "e$osit acco!nt
O$ening o# Letter o# cre"it
8. )%e co$an& "oes not %a'e to s$en" an&t%ing e<tra to a'ail s!c% #acilities. All it re4!ires is
Internet connecti'it&. )%e $ro"!ct enables t%e co$an& to $ro-acti'el& anage its cas% #lows,
ease reconciliation e##orts as all t%e MIS is a'ailable at t%e click o# t%e o!se.
>. Bill (a&ent t%ro!g% Electronic bankingB Internet %as t%!s !s%ere" t%e conce$t o# an&tie
an" an&w%ere banking. )o t%e in"i'i"!al t%e onero!s task o# 'isiting se'eral $laces to settle %is
ser'ice bills like tele$%one, water, electricit&, etc., can be o'ercoe t%ro!g% t%e electronic Bill
(a& ser'ice $ro'i"e" b& t%e bank. 3e can $a& %is reg!lar ont%l& bills (tele$%one, electricit&,
obile $%one, ins!rance, etc.) rig%t #ro %is "eskto$. No ore isse" "ea"lines, no ore loss o#
interest. 3e can sc%e"!le %is bills in a"'ance, an" t%!s a'oi" issing t%e bill "ea"lines as well as
earn e<tra interest on %is one&.
=-
1?. Ot%er bene#itsB )%e e- banking $ro'i"es soe ot%er bene#its also.
)%e& areB
2on'enience.
S$ee" o# concl!"ing transactions.
Sa#et&- banking #ro own %oe.
Econo&- banking wit%o!t 'isiting &o!r bank. 2%ea$er ser'ice #ees.
Sealess Integration wit% e<isting en'ironent (I:M-Intelligent :ata Mo"!le).
3ig%l& Saleable.
Eas& 2!stoiEation.
Lower 2osts o# bot% Installation an" Maintenance.
/imitation of *+ banking:
1. Sa#et& sit!ations aro!n" A)Ms.
2. Ab!se o# bank car"s b& #ra!"sters at A)Ms.
3. :anger o# gi'ing &o!r car" n!ber w%en b!&ing on-line
=/
>. I.T in Bank
)%e re#ors in t%e +,,0s, w%ic% le" to e<$ansion, consoli"ation an" liberaliEation o# t%e banking
an" #inancial sector in In"ia, bro!g%t in an& c%anges an" c%allenges. A n!ber o# $ri'ate an"
#oreign $la&ers entere" t%e In"ian arket wit% s!$erior tec%nologies t%at %el$e" t%e ser'ice
t%eir c!stoers e##icientl& t%ro!g% !lti$le c%annels s!c% as A)Ms an" Online banking. In"ian
bank s on t%e ot%er %an" %as been !sing I) ore o!t o# co$!lsion an" $riaril& #or transaction
$rocessing. )%e& now nee" to a"o$t I) to re$osition bank s into t%e integrate" #inancial ser'ices
arket.
)%e nee" #or $ro'i"ing i$ro'e" c!stoer ser'ice, re"!cing transaction costs an" increasing
$ro"!cti'it&, s%all be t%e ain "ri'ers #or banking sector to a"o$t I). )%ese consi"erations are
$artic!larl& i$ortant #or $!blic sector bank s in In"ia, w%o are #acing iense co$etition
#ro $ri'ate an" #oreign bank s. I) can %el$ t%e o'e #ro t%e $resent scenario w%ere t%e& are
working as isolate" islan"s to $ro'i"ing a centraliEe" banking e<$erience. )%ere is a nee" to"a&
#or I) an" t%e #inancial co!nit& to coe toget%er an" "e'elo$ c!stoiEe" I) sol!tion to
ake t%e In"ian banking sector globall& co$etiti'e.
I) a"o$tion in t%e banking sector will $ro'i"e real tie a'ailabilit& o# transaction $rocessing
t%ro!g% !lti$le c%annels. It wo!l" en%ance a bankGs abilit& to cross sell $ro"!cts, ens!re better
anageent an" sec!rit& an" sa#et& o# #!n"s an" increase e##icientl& t%ro!g% integration o#
s&stes across 'ario!s locations. It wo!l" also ens!re e##icient anageent o# Non (er#oring
Assets (N(As), iniiEe transactions costs, en%ance abilit& to con"!ct in-"e$t% #inancial
anal&sis an" gat%er b!siness intelligence. En%ance" !se o# I) wo!l" also enco!rage t%e !se o#
Internet to $ro'i"e access #or online bill $a&ents, #!n" trans#ers an" e-stateents in a""ition to
enco!raging wireless obile banking an" e-coerce.
*it% growing co$etition #ace" b& #oreign bank s an" #inancial instit!tions, t%e $!blic sectors
=.
banks in co-o$eration wit% t%e In"ian I) in"!str& wo!l" nee" to e4!i$ t%esel'es #or t%e ne<t
$%ase o# intro"!cing t%e bene#its o# I) to t%eir c!stoers b& $ro'i"ing a centraliEe" banking
sol!tion.
O$$ort!nit& #or In"ian banking sector in branc% co$!teriEation
1. I) Networking
2. S&ste Jelations%i$ Manageent
3. 2!stoer Jelations%i$ Manageent (2JM) A$$lications
4. Back O##ice $rocessing an" 2all 2enters
5. :ata ware%o!singF:ata ining
=D
Mobile banking an" e- banking. Con#l$ion
*it% t%e ra$i" "e'elo$ent o# trans$ort an" co!nication, $eo$le an" ser'ices are coing
toget%er as i# t%e& were ;!st aro!n" t%e corner. I# t%is is t%e case #or an& ser'ices, t%en w%&
s%o!l" t%e banking in"!str& lag be%in".
Internet banking, $%one banking, e-banking an" now obile banking all enable t%e bank to be
better connecte" wit% t%e c!stoer an" 'ice 'ersa. A c!stoer w%o is $ro'i"e" wit% a 'ariet& o#
a""itional ser'ices #eels a$$reciate" an" is ore likel& to be lo&al to t%at bank, w%ic% is alwa&s a
goo" sign #or a bank.
In t%e en" obile banking not onl& %el$s a bank to re"!ce costs b!t also %el$s it to retain its
'al!able c!stoers. An" as #ar as c!stoers are concerne", t%is #acilit& enables t%e c!stoer to
bank an&w%ere, at an&tie an" in an& con"ition, "e#initel& a boon i# a c!stoer is st!ck in t%e
i""le o# now%ere an" re4!ires banking ser'ices as soon as $ossible.
29
)%!s obile banking %el$s bot%, t%e c!stoer as well as t%e bank, to lig%ten t%e b!r"en
o# to"a&Gs worl" an" to sa'e tie, one& an" energ& w%ic% is greatl& re4!ire" an"
a$$reciate". In a co$etiti'e worl" w%ere e'er&one is waiting to o!t"o t%e ot%er, a
%el$ing %an", in w%ate'er #ors an" #ro w%ate'er so!rce, is "e#initel& go" sent an"
s%o!l" not go !nrecogniEe".Bibliograph(
*ebsitesB
1. www.wiki$e"ia.co
2. www.googleiages.co
3. www.google.co
BooksB
En'ironent o# #inancial ser'ices, O.(.Agarwal.
Banking Ser'ice Q In#oration )ec%nolog&, J.K.5$$al.
29