A STUDY OF MOBILE BANKING IN INDIA

Ridhima Chauhan, SYBFM

KESSC

2018
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Abstract
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The role of technology is improving day by day and also increasing, one of them is mobile

banking. Mobile banking has ease our life and also changed the scenario of technology. Banks

working to offer the wireless and mobile technology to their customers. The facilities like

making transactions anywhere or anytime and also to keep them updated related with all the

information to their banks. Banking is one of the largest financial institutions which always test

the opportunity of technology to provide better customer services. Over the years, banking has

transformed from a traditional brick-and mortar model of customers waiting for services in the

banks to modern day banking where banks can be reached at any point for their services. This

paper examines consumer adoption of a new electronic payment service as mobile banking and

the positive and negative factors influencing the adoption of mobile banking in India.

Keywords: mobile banking, Internet Banking, Technology Adoption, Mobile Payment.

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A STUDY OF MOBILE BANKING IN INDIA

Mobile banking is one of the popular mode of banking in developing as well as

developed countries. M-banking has reduced the dependency on physical bank visits or cash

transfer. M-banking is an application of mobile computing which not only saves times but also

gives us access to check any kind of information like account balances or transferring of money.

In India put the ongoing digital drive in India the number of users for mobile banking

user has been jumped 112 percent. PM’S website stated that over 72 crore transactions were

done using mobile banking in 2016 to 17, transactions were done using mobile banking in 2016

to 17, compare to 9.47 crore in 2013 to 2014 and this figure is expected to grow rapidly.

Customers can get there bank statements pay their bills anywhere, transfer money from

one account to another. But there are many disadvantages also like a good internet connection is

needed and also because of Cybercrimes and threats to the data of users is also one of the biggest

disadvantages of using mobile banking.

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Literature review

The mobile banking is defined as “the provision of banking services to customers on their

mobile devices” (Sharma, Prerna, Bamoriya & Preeti Singh, 2011). Mobile Banking refers to

provision and usage of banking and financial services with the help of mobile telecommunication

devices. Mobile banking is a system that helps the customers to conduct a number of financial

transactions with the help of their mobile devices. Mobile commerce is a natural successor to

electronic commerce. Where a mobile device is used to initiate, authorize and confirm an

exchange of financial value in return for goods and services. Mobile devices may include mobile

phones, PDAs, wireless tablets and any other device that connect to mobile telecommunication

network and make it possible for payments to be made. The bank provides mobile banking

services to their customers, wishing to increase their customer share by removing all the hurdles

in the way of adoption of mobile banking services The role of banking is very important in

operating the business as well as industry functions. As the Internet banking is still in its growing

stage, mobile banking has emerged as the next advance way of doing banking. The scope of

offered services may include facilities to conduct bank transactions, to administer accounts and

to access customized information (Tiwari & Buse, 2007). In the broader sense mobile banking as

that type of execution of financial services in the course of which, within an electronic procedure

the customer uses mobile communication techniques in conjunction with mobile devices. Mobile

phones have become an essential communication tool for almost 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. Technology plays an important role in banking sector. Mobile phone is a

common technology device that became part of every individual in the information era. Mobile
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Scope of study

1. Geographical individuals in urban area of Mumbai is targeted for the study.

2. Students Businessman are employed are also considered

Research methodology

This paper is based on both quantitative and qualitative. This research is based on the

data collected through questionnaire with mobile banking user and non-users. This paper is based

on the ER. This improve the final Research Design.

Objectives of the study

1. To understand the mechanism of mobile banking in India.

2. To understand the problems faced by the users while adopting mobile banking.

3. To analyze the positive and negative effects of mobile banking.

4. To study the various purpose of using mobile banking.

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CHALLENGES WITH ADOPTION OF MOBILE BANKING

1. Economic Challenges: The rural population in India is spread across 600,000 villages,

each with a low transaction value. Profitability can only be achieved by large

volumes, requiring significant initiative from financial institutions. Unlike the

successful M-PESA of South Africa, whose model has been very successful due to the

lack of alternative payments in South Africa, India does possess some infrastructure

in the forms of postal payments, reasonable transport and local governments.

Therefore, any mobile banking must be inexpensive enough to be attractive for the

end-customer over existing methods.

2. Demographic Challenges: India has 18 official languages which are spoken across the

country. The state governments also are dictated to correspond in their regional

language for official purposes. Additionally, two-thirds of the population in India is

illiterate, creating difficulties in deployment of mobile banking solutions. For a

panIndian mobile banking solution, this will be cumbersome to overcome.

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Positive impact

1. Reminder facility

The banquet remind the customer the dates of repayment of loan the payment

of monthly installments. The user can also view their balance on their phone

and other services and other services too provided by their bank.

2. Security features

Bank sends alerts related to their account on their phones but only on the

mobile number registered with bank. Only the last six digits and account type

will be sent to the user on the registered mobile number.

3. Easy to avail mobile services on fingertips

The user doesn't required to visit bank or the ATM to avail or to receive Bank

services. Even after the installation of ATMs customer visiting their banks

branch has dropped drastically the use of mobile technology is beneficial to

the users as well as to the bank.

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Negative impact

1. Security

Security is the utmost priority for the use. Security shows how much secure

mobile banking for the user and to the consumers. Security of mobile banking

is a big issue for mobile banking users. Mobile banking is liable to be

susceptible by security threats. Consumer using simple pin and easy

passwords can increases the chance in attacking methods.

2. Lack of awareness

People are not aware much about the services provided by the banks and if

some does the lag behind the proper usage of the technology. As they are not

aware about the mobile banking technology to use it and doesn't use it.

3. Authentication undertaking issues

In mobile banking application old methods or process are being used like to

enter pin or password for the combination this creates and this creates

authentication risky. It may be possible that password or personal details get

stolen by the hacker. Another is possible due to authentication process in

mobile banking if mobile gets lost then attacker May access the account by

using ID or password.
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ANALYSIS AND INTERPRETATION OF DATA

The above chart shows that in today’s time out of 56 respondents 62.5% use Mobile Banking and

37.5% are the non-users.

The above chart shows that out of 56 respondents 33. Agree that security of mobile banking is an

issue where is 32.1 and 33.3 are neutral.

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The above chart shows that out of 56 respondents 60.7 agrees that the services provided

by the bank on mobile banking application is more effective and quick way to utilize the bank

services and on the other hand 8.9 disagrees and remaining are neutral.

Findings of the study

1. Reasons why some users are not using mobile banking because of security

issues is there is lack of awareness. Bank should create awareness about the

mobile banking services social media advertisements etc.

2. The main attention of management should be focused on the development of

usefulness of system, trust building and cost reduction.

3. It is also found that customers will adopt mobile banking if they find it easy to

use and understand.

4. Trust is also an important point of concern. Trust between the customers and

the service provider is very important, without security and privacy users will

not use mobile for financial transactions.

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Hypothesis

H1: There is significant relationship between factors influencing m-banking

adoption and the demographics.

H02: There is significant relationship between the type of bank ownership and

factors influencing m-banking adoption.

H03: There is significant relationship between the frequency of using mobile

banking and factors influencing m-banking adoption.

CONCLUSION

It is well recognized that mobile phones have immense potential of conducting financial

transactions thus leading the financial growth with lot of convenience and much reduced cost.

For inclusive growth, the benefits of mobile banking should reach to the common man at the

remotest locations in the country. For this all stakeholders like Regulators, Govt., telecom service

providers and mobile device manufactures along with bankers need to make efforts so that

penetration of mobile banking reaches from high-end to low-end users and from metros to the

middle towns and rural areas. Inclusion of non-banking population in financial main stream will

benefit all. There is also need to generate awareness about the mobile banking so that more and

more people use it for their benefit. Research so far has outlined a diversity of thinking and

innovation that exists in the m- payments arena. Numerous solutions have been tried and failed

but the future is promising with potential new technology innovations.

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REFERENCES

1. Journal of Internet Banking and Commerce.

2. Internet banking. International Journal of Bank Marketing.

3. Newspapers, social sites etc.