Introduction
In some ways we are experiencing a paradigm shift of Banking from the Internet Banking to a next generation. This paradigm shift explores and opens a new dimension for the customers with a much convenient and better service in which customers can enjoy a new set of personal services. Mobile phones have become a part and parcel of life and all-in-one tool in the pocket. No wonder, life without mobile phones have become unimaginable and unthinkable to many. The nature of mobile phone banking is different to traditional channels and carries
unique service benefits for both consumers and the banks.
Mobile phone banking also provides banks with an opportunity to connect with a well-educated and profitable 25 €" 34 year old segment of their customer base. So much of what mobile banking provides is helpful for consumers. This channel provides a means of improving a bank's relationship with consumers through helping them manage their finances well and avoid the sort of charges that many people resent.
Push and Pull
Basically there are two types of mobile phone services available viz. Pull & Push. Bank sends inquiry messages to customers mobile based on the customers rule settings. Sometimes, Customers can also initiate an inquiry or transaction through their Mobile. This is called Pull Transactions.
A push transaction, on the other hand, is one in which the bank sends information based on a set of rules. For example Minimum balance, Credit/debit alert and Bill payment alert are in which banks sends details to Customer Mobiles as a SMS alert. Obviously a Bank cannot initiate a transaction on its own without the customer's request or mandate and hence there is no such thing called Pull Transaction.
A Funds transfer, Bill payment and Share Trade involve Transaction movement from one source to another. Customers can also request various inquiries from their bank like Account balance inquiry, Account statement inquiry, Check status inquiry and Transaction history. So it's like a two way communication where the Bank is responding to the Customers Request and not like a simple one way Push transaction.
In traditional SMS banking, Customer sends simple message (SMS) to banks where they have to process from a limited length of text. Generally, a customer can send up to 160 characters in length through the SMS and even there is no guaranteed time for the sender due to the huge traffic found in the telecom networks. The customer was not getting any user friendly screens to select his option and to place his/her request. Though it was introduced the mobile banking were not that much popular in common man as it failed to impress with its limitation particularly in certain geographical regions of North America, Asia and Europe.
Wireless Access Protocol browsers are rich in providing a dynamic page to customers for exposing a new looks for the mobile banking. This not only keeps customers little bit comfort as they already have the internet banking feature but also makes them feel secure of not downloading any software's. Banking through WAP browsers has its own advantage and disadvantages. The variation of screen sizes, weak firewall protection of the mobile device is more vulnerable to viral attacks.
The Apples iPhone and Googles €Android' revolution has created a new wave in the Mobile Banking history. This opens a new window for bank and customer interactions. Now customers and bank can interact with an advance mobile banking system. Few Banks provide a downloadable client app which can be downloaded and installed in your Mobile. Customers can access the bank through this small application residing in their Mobile. Though Banks can develop such small mobile enabled applications and expect customers to use these facilities there should be push from Banks for the customer to use these features. What we mean is there should be some compelling benefits which the customers should be provoked to use it and once they start using it, they will like it and banks can open a lot of opportunities. I feel this gap is not filled for long time.
Even if the banks setup a strong network for the mobile channels, presence of this type of latest mobile among customer is still lagging. I would strongly say that this important barrier should be reduced from banks initiative; banks should concentrate on these areas rather expecting the customer to approach them. Bank needs to find ways to get their customer better device by providing their own customer with certain offer tied up with the Mobile corporate. The device should create enthusiasm for customers to go with the songs, cameras and to support WAP browsers. This benefits both the telecom operators and financial institution giants to un-tap new business opportunities.
How Mobile Banking can help Bank and Customer?
€Poor Man's€ Banking
Financial services for the unbanked are among the most promising opportunities for mobile-telecom operators hoping to counter slowing subscription growth with auxiliary offerings, such as banking, health care, and education services. In emerging markets, formal banking reaches about 37 percent of the population, compared with a 50 percent penetration rate for mobile phones. For every 10,000 people, these countries have one bank branch and one ATM€"but 5,100 mobile phones.
A new focus on bringing financial services to the unbanked€"those without easy access to traditional banking channels€"represents a strategic shift for mobile operators. The very small deposits and loans held by poorer customers make them unprofitable for banks that use traditional delivery models. But mobile devices reduce the cost to serve customers by 50
In some ways we are experiencing a paradigm shift of Banking from the Internet Banking to a next generation. This paradigm shift explores and opens a new dimension for the customers with a much convenient and better service in which customers can enjoy a new set of personal services. Mobile phones have become a part and parcel of life and all-in-one tool in the pocket. No wonder, life without mobile phones have become unimaginable and unthinkable to many. The nature of mobile phone banking is different to traditional channels and carries
unique service benefits for both consumers and the banks.
Mobile phone banking also provides banks with an opportunity to connect with a well-educated and profitable 25 €" 34 year old segment of their customer base. So much of what mobile banking provides is helpful for consumers. This channel provides a means of improving a bank's relationship with consumers through helping them manage their finances well and avoid the sort of charges that many people resent.
Push and Pull
Basically there are two types of mobile phone services available viz. Pull & Push. Bank sends inquiry messages to customers mobile based on the customers rule settings. Sometimes, Customers can also initiate an inquiry or transaction through their Mobile. This is called Pull Transactions.
A push transaction, on the other hand, is one in which the bank sends information based on a set of rules. For example Minimum balance, Credit/debit alert and Bill payment alert are in which banks sends details to Customer Mobiles as a SMS alert. Obviously a Bank cannot initiate a transaction on its own without the customer's request or mandate and hence there is no such thing called Pull Transaction.
A Funds transfer, Bill payment and Share Trade involve Transaction movement from one source to another. Customers can also request various inquiries from their bank like Account balance inquiry, Account statement inquiry, Check status inquiry and Transaction history. So it's like a two way communication where the Bank is responding to the Customers Request and not like a simple one way Push transaction.
In traditional SMS banking, Customer sends simple message (SMS) to banks where they have to process from a limited length of text. Generally, a customer can send up to 160 characters in length through the SMS and even there is no guaranteed time for the sender due to the huge traffic found in the telecom networks. The customer was not getting any user friendly screens to select his option and to place his/her request. Though it was introduced the mobile banking were not that much popular in common man as it failed to impress with its limitation particularly in certain geographical regions of North America, Asia and Europe.
Wireless Access Protocol browsers are rich in providing a dynamic page to customers for exposing a new looks for the mobile banking. This not only keeps customers little bit comfort as they already have the internet banking feature but also makes them feel secure of not downloading any software's. Banking through WAP browsers has its own advantage and disadvantages. The variation of screen sizes, weak firewall protection of the mobile device is more vulnerable to viral attacks.
The Apples iPhone and Googles €Android' revolution has created a new wave in the Mobile Banking history. This opens a new window for bank and customer interactions. Now customers and bank can interact with an advance mobile banking system. Few Banks provide a downloadable client app which can be downloaded and installed in your Mobile. Customers can access the bank through this small application residing in their Mobile. Though Banks can develop such small mobile enabled applications and expect customers to use these facilities there should be push from Banks for the customer to use these features. What we mean is there should be some compelling benefits which the customers should be provoked to use it and once they start using it, they will like it and banks can open a lot of opportunities. I feel this gap is not filled for long time.
Even if the banks setup a strong network for the mobile channels, presence of this type of latest mobile among customer is still lagging. I would strongly say that this important barrier should be reduced from banks initiative; banks should concentrate on these areas rather expecting the customer to approach them. Bank needs to find ways to get their customer better device by providing their own customer with certain offer tied up with the Mobile corporate. The device should create enthusiasm for customers to go with the songs, cameras and to support WAP browsers. This benefits both the telecom operators and financial institution giants to un-tap new business opportunities.
How Mobile Banking can help Bank and Customer?
- Mobiles will be the more convenient. Simplicity and ease of use of mobile banking may encourage people to use their mobile phone rather than their personal computer. Apple's touch-screen approach has created a standard for others to follow. For the banking industry the quality and simplicity of the mobile banking platform will be critical and a source of competitive advantage. The simplicity of many phone banking tools may go some way to explaining why many consumers use their phone to carry out banking tasks even when they are at home with access to a personal computer. Thus the simplicity of mobile banking will be a key.
- Avoiding the long queue in the Bank's Branch office frequently
- Don't need to dial the Call centre numbers which can significantly save lot of money for the banks in outsourcing their call centres and can retain their call centres at offshore with a
small team. - Quick tasks like checking balances can be done while people are out of the home while more involved tasks like budgeting or bill payment tend to be done in the home. Balance checking and budgeting are tasks that are sometimes carried out when people are killing time.
- Customers can check without hassle if there are sufficient funds before buying some products to avoid embarrassment during their shopping.
- Always be in synch with your latest Financial status through the push transaction services
- Remote Deposit Capture (RDC) like depositing Cheques via a camera-enabled phone is fast-growing without setting your Foot into a Branch. This saves lot of money for the banks and customers. In US, the Check Clearing for the 21st Century Act was written into law, which allows cheques to be cleared and settled through images. Nearly 20% of financial institutions already have definitive plans to launch mobile RDC services.
- Branchless banking or Poor Man's banking helps to cover the most of the urban areas where banks have not penetrated. These areas can be reached only through Mobiles as they are already living with them.
€Poor Man's€ Banking
Financial services for the unbanked are among the most promising opportunities for mobile-telecom operators hoping to counter slowing subscription growth with auxiliary offerings, such as banking, health care, and education services. In emerging markets, formal banking reaches about 37 percent of the population, compared with a 50 percent penetration rate for mobile phones. For every 10,000 people, these countries have one bank branch and one ATM€"but 5,100 mobile phones.
A new focus on bringing financial services to the unbanked€"those without easy access to traditional banking channels€"represents a strategic shift for mobile operators. The very small deposits and loans held by poorer customers make them unprofitable for banks that use traditional delivery models. But mobile devices reduce the cost to serve customers by 50