Embarking on M-Banking

Countries like India, China and Philippines offer huge potential for mobile
banking, as the mobile infrastructure in these countries is much better than
fixed line infrastructure, and much more evolved. Further, these countries are
also witnessing exponential growth in the mobile industry. For instance, the
Indian telecom market is galloping with 162.3 mn mobile users as on March 2006
and an average of 5-6 mn mobile users being added every month. In Asia Pacific,
Koreans, known to be tech savvy, use mobile banking in a big way. However,
currently, in India mobile banking is mushrooming and gaining momentum.

Mobile banking is the evolutionary step after Internet banking. It is an
additional service bolted on top of an existing solution, making access to
services more immediate and reducing customer reliance on branch infrastructure
or access to the Internet. A mobile bank is by definition a new offering and
thus unconstrained by existing infrastructure, pricing structures and product
rules, allowing it to be optimized for a totally mobile experience.

M-banking Today

Today, mobile banking offers its users host of services, including value
added service offered by the banks either free or on subscription. Benefits to
the provider are numerous as it reduces the individual's dependency on the
physical infrastructure, and mobile transactions are less costly to facilitate
and manage. Few customer friendly services provided by different banks include:
account balance enquiry, account statement enquiries, cheque status enquiry,
cheque book requests, fund transfer between accounts, credit/debit alerts,
credit threshold limits, minimum balance alerts, bill payment alerts, bill
payment, recent transaction history requests, information requests like interest
rates/exchange rates.

Banking the Un-banked

Given that mobile phones in India have become affordable, wherein a user can
now go mobile for as low as Rs 1,500, mobile banking can be a powerful tool to
bank the un-banked. Banks and telcos can collaborate to offer the latest in
banking services to rural areas. Additionally, with m-banking, low income people
no longer need to use the scarce time and financial resources to travel to
distant bank branches. Since m-banking transactions cost far less to process
than transactions at an automated teller machine or branch, banks can also make
profit handling even small money transfers or payment.

Fuelling Adoption

Despite the potential for convenience and business opportunity, few people
use mobiles even for simple banking queries. Mobile banking is currently seen as
a value added service provided by banks. However, it is just a matter of time
when it would be the most preferred way for conducting banking/financial
transactions.

In order for banks in India to explore full potential, increasing awareness
is essential. Moreover, initiatives towards changing people's attitude and
mindset are essential. Television sets, washing machines, ATMs and credit cards
have taken years to pick up. As customer confidence increases over the security,
it is expected that mobile phones will be the most preferred and convenient
device for conducting banking transactions and emerge as one of the major
payment channels in India. Mobile banking, a symbiosis of technology and
financial services, is the hottest area of development in the banking sector and
if adequate measures are undertaken to create wide spread awareness and change
the mindset of people, it would be just a matter of time when they replace the
debit/credit card system in future.

Mandeep Bhatia,


COO (Mobile Services), Bharti Airtel, Maharashtra and Goa Circle


maildqindia@cybermedia.co.in