2

Introduction to Mobile Banking

The last time that technology had a major impact in helping banks service their customers was with the introduction of the Internet banking. Internet Banking helped give the customer's anytime access to their banks. Customer's could check out their account details , get their bank statements , perform transactions like transferring money to other accounts and pay their bills sitting in the comfort of their homes and offices .However the biggest limitation of Internet banking is the requirement of a PC with an Internet connection , not a big obstacle if we look at the US and the European countries , but definitely a big barrier we consider most of the developing countries of Asia like China and India . Mobile banking addresses this fundamental limitation of Internet Banking , as it reduces the customer requirement to just a mobile phone .Mobile usage has seen an explosive growth in most of the Asian economies like India , China and Korea . In fact Korea boasts about a 70% mobile penetration rate and with its tech - savvy populace has seen one of the most aggressive rollouts of mobile banking services .Still , the main reason that Mobile Banking scores over Internet Banking is that it enables Anywhere Banking '. Customers now don't need access to a computer terminal to access their banks , they can now do so on the go when they are waiting for their bus to work, when they are traveling or when they are waiting for their orders to come through in a restaurant.The scale at which Mobile banking has the potential to grow can be gauged by looking at the pace users are getting mobile in these big Asian economies . users by the end of 2004. History of Mobile Banking

Early 2000sBanks faced mobile banking challenges in the early part of the decade. Consumers found it difficult to view their financial information on the small cell phone screens that were common at the time. Some banks offered the service , only to soon discontinue it; in 2002, Wells Fargo developed a mobile banking service and only 2,500 customers enrolled in it. Because of the poor response, they soon withdrew the offering.

Mid -2000sAs the size and capabilities of mobile devices increased, so did the effectiveness of mobile banking. Banks introduced services that accommodated more types of cell phones and mobile devices, including smart phones. Consumers preferred the easier navigation and improved images and graphics offered by updated, technologically advanced mobile services.

2008 and BeyondIn 2008 , smaller banks began to offer mobile banking. More customers of large banks were also using the service . As of February 2009, over 1.9 million customers were using Bank of America's mobile service in the U.S. Other industry players a lso entered the market; AT & T offers a mobile banking application that allows customers from different banks, with different types of mobile devices, to more easily conduct transactions.

Definitions

M-banking

By M-banking we refer to financial services delivered via mobile networks and performed on a mobile phone . These services may or may not be defined as banking services by the regulator , depending on the legislation of the country in question , as well as on which services are offered . Hence , we may refer to an initiative as M-banking service even though it would not fall into the banking definitions under that particular countrys regulatory regime . As described previously , M-banking is by Porteous ( 2006 ) separated into two categories ; additive and transformational , where the latter is categorized by a new type of services that could attract users from rural areas and poorer segments of the market , and hence can have a transformational effect . When we casually use the term M-banking , we refer to transformational M-banking services .

M-transactions

Transactions such as remittances and payments delivered via mobile networks and performed on a mobile phone .

Retail banks

By the term retail banks , we refer to conventional banks that offer services to individuals from the public .

Banking

To conduct banking normally means one or both of the following :-

Receiving from the general money on current , deposit , savings or

Other similar account repayable on demand , or

Paying or collecting cheques drawn by or paid in by customers.

Hence , banking is viewed as holding accounts in a branch office , which does not suffice as a definition for M-banking . We deem that it in our reasoning is more appropriate to view banking in a wide r context to also include branchless banking and simple money transfers between parties not holding accounts . These services are customarily defined as money transactions but we have chosen to view them as a sub set of banking.

M-banking in short

Mobile banking, or M-banking, is the term we use to describe financial services delivered via mobile networks using mobile phones. Normally, suchservices include depositing, withdrawing, sending and saving money, as wellas making payments. (Using a laptop and an Internet connection as the link to the bank would instead be referred to as Internet banking. ) M-banking is by Porteous (2006) separated into two categories; additive and transformational, where the additive model uses.

M-banking as an extra access

Channel for existing clients. This model is the most commonly used amongst retail banks. The transformational category is according to Porteous categorized by business models that draw upon existing telecom and agent/representatives infrastructure, run by new or alternative banking actors andhas a geographic coverage and pricing with the potential to attract previously unbanked segments. Further, it may also have a transformational effect in terms of formalising previously informal transactions and hence bringing people and their financial assets into the formal economy.

Impacts

Actual usage of M-banking services and impact are of course issues of immense importance ; for this small project we were however able to draw such knowledge from existing sources.

Although usage data do exist to some degree relevance to poverty alleviation and actual impact to date has been little discussed in the openly available sources we have come across . Hence , in existing documentation and research we have reviewed , there is a lack of an in depth and balanced analysis of whether or not M-banking activities to date have had any impact on poverty alleviation amongst previously unbanked groups . We will discuss this further in our final chapters.

To the layman , interested organisations and individuals new to the topic , this paper as a whole may serve as an introduction , while the final chapters also may be of benefit to more experienced M-banking executives , policy makers , regulators , consultants and civil society .

The authors have a background in development issues in general , and in particular ICTs and private sector development , including market access to financial services . Both SPIDER and the authors emphasize their humble attitude towards the vast amount of research and knowledge available in this field.

Advantages of Mobile Banking

The biggest advantage that mobile banking offers to banks is that it drastically cuts down the costs of providing service to the customers. For example :- An average teller or phone transaction costs about $2.36 each, whereas an electronic transaction costs only about $0.10 each. Additionally, this new channel gives the bank ability to cross -sell up -sell their other complex banking products and services such as vehicle loans , credit cards etc.

For service providers, Mobile banking offers the next surest way to achieve growth Countries like Korea where mobile penetration is nearing saturation , mobile banking is helping service providers increase revenues from the now static subscriber base. Also service providers are increasingly using the complexity of their supported mobile banking services to attract new customers and retain old ones.

Disadvantages of Mobile Banking

Following are the various limitations of mobile banking which have kept it from being happily welcomed by the customers as an alternate form of banking.May prove costly for normal mobile holders The customers who have non-android phones or cannot afford iPhones/BlackBerry cannot dream of complete reliance on mobile banking. Besides, internet connection on phones may be costly depending on the phone features and network providers.Restricted scope Mobile Banking has not been fully adopted by people as of yet because according to the data, only 14% of Indian customers are familiar with mobile banking concepts like P2P or person to person transactions and m-commerce transactions.Non-uniformity of services It is very important to understand that not all banks provide same services through Mobile Banking. While 69 banks have as of May 31, 2012, been allowed to provide mobile banking services to customers by Reserve Bank of India, there are still many in line who are being kept out of the purview.One account managed through only one number The Telecom Regulation Authority of India allows a person to own as many as 9 numbers but if the person has just one bank account he can access it through only one number for mobile banking. This is very inconvenient for a user of multiple mobile numbers.Threat of virus and spams Mobile Banking comes with a huge risk to the customer of being under attack by a virus or even by a spam message. The customer must be very careful to analyze whether the message sent to him seeking his password or bank information is authentic and actually from the bank or not. Similarly, virus can attach the mobile device and cause errors in the software causing disturbances in transactions. Mostly, the amount of required anti-virus or firewall protection available for computers, is absent in mobile phones.Higher costs of KYC Although mobile banking aims to achieve lower costs yet the Know Your Customer or KYC costs of mobile banking per customer exceeds Rs. 400. Thus the cost is more than the mean revenue per subscriber for any telecommunication company.Risk of Unofficial mobile applications For people who own a blackberry, android phones or iPhones, they have another option of downloading various applications that enable mobile banking but the customers must be careful to download only authentic apps from the official bank websites only.Theft of mobile This is one of the major disadvantages of mobile banking. In case the mobile gets stolen, the person is almost bound to lose money if the bank account information gets leaked and the criminals gain access to the bank account through mobile web or mobile apps.Loss of Personal Banking Experience The mobile web helps people open up the banking website on their mobiles and conduct simple transactions online. Working in the virtual world proves to be a loss of personal banking experience especially for those who find mobile banking more complicated. A two-way communication becomes almost impossible between the customers and the bank.Discomfort due to Small Screen Accept it or not, but mobile phones have a very small screen compared to a laptop or a computer and this proves to be a disadvantage when doing banking through mobiles. While, new web designs aim to take care of it, but still it is nowhere near desktops. Even the bank websites may show up distorted on the small screen of mobile and the user may find the whole mobile banking process very tedious.

.Technologies enabling Mobile Banking

Technically speaking most of these services can be deployed using more than one channel Presently , Mobile Banking is being deployed using mobile applications developed on one of the following four channels.IVR ( Interactive Voice Response )

SMS ( Short Messaging Service )

WAP ( Wireless Access Protocol )

Standalone Mobile Application Clients

1 . IVR Interactive Voice ResponseIVR or Interactive Voice Response service operates through pre-specified numbers that banks advertise to their customers. Customer's make a call at the IVR number and are usually greeted by a stored electronic message followed by a menu of different options. Customers can choose options by pressing the corresponding number in their keypads and are then read out the corresponding information, mostly using a text to speech program.

Mobile banking based on IVR has some major limitations that they can be used only for Enquiry based services. Also, IVR is more expensive as compared to other channels as it involves making voice call which is generally more expensive than sending an SMS or making data transfer (as in WAP or Standalone clients).

One way to enable IVR is by deploying a PBX system that can host IVR dial plans. Banks looking to go the low cost way should consider evaluating Asterisk, which is an open source Linux PBX system.

2 SMS Short Messaging Service

SMS uses the popular text messaging standard to enable mobile application based banking. The way this works is that the customer requests for information by sending an SMS containing a service command to a pre-specified number. The bank responds with a reply SMS containing the specific information.

However there have been few instances where even transaction- based services have been made available to customer using SMS. For instance , customers of the Bank of Punjab can make fund transfer by sending the SMS TRN ( A/c No ) ( PIN No ) ( Amount ) '.

3. WAP Wireless Access

WAP uses a concept similar to that used in Internet banking. Banks maintain WAP sites which customer's access using a WAP compatible browser on their mobile phones. WAP sites offer the familiar form based interface and can also implement security quite effectively.

Bank of America offers WAP based service channel to its customers in Hong Kong . The banks customers can now have an anytime, anywhere access to a secure reliable service that allows them to access all enquiry and transaction based services and also more complex transaction like trade in securities through their phone.

A WAP based service requires hosting a WAP gateway. Mobile Application users access the bank's site through the WAP gateway to carry out transactions , much like internet users access a web portal for accessing the banks services.

4. Standalone Mobile Application Clients

Standalone mobile applications are the ones that hold out the most promise as they are most suitable to implement complex banking transactions like trading in securities. They can be easily customized according to the user interface complexity supported by the mobile. In addition, mobile applications enable the implementation of a very secure and reliable channel of communication.

One requirement of mobile applications clients is that they require to be downloaded on the client device before they can be used, which further requires the mobile device to support one of many development environments like J2ME or Qualcomm's BREW .J2ME is fast becoming an industry standard to deploy mobile applications and requires the mobile phone to support Java.

The major disadvantage of mobile application clients is that the applications needs to be customized to each mobile phone on which it might finally run . J2ME ties together the API for mobile phones which have the similar functionality in what it calls 'profiles'. However , the rapid proliferation of mobile phones which support different functionality has resulted in a huge number of profiles, which are further significantly driving up development costs . This scale of this problem can be gauged by the fact that companies implementing mobile application clients might need to spend as much as 50% of their development time and resources on just customizing their applications to meet the needs of different mobile profiles.

Out of J2ME and BREW,J2ME seems to have an edge right now as Nokia has made the development tools open to developers which has further fostered a huge online community focused in developing applications based on J2ME. Nokia has gone an additional mile by providing an open online market place for developers where they can sell their applications to major cellular operators around the world .BREW on the other hand has seen limited popularity among the developer community, mostly because of the proprietary nature of its business and because of the steep prices it charge s for its development tools.

Quite a few mobile software product companies have rolled out solutions, which enable J2ME mobile applications based banking. One such product is Wireless I-banco. The mobile user and installs the wireless I-banco application on their J2ME pone...

Debit card

A debit card (also known as a bank card or check card ) is a plastic payment card that provides the cardholder electronic access to his or her bank account at a financial institution. Some cards have astored value with which a payment is made, while most relay a message to the cardholder's bank to withdraw funds from a payee's designated bank account. The card, where accepted, can be used instead of cash when making purchases . In some cases, the primary account number is assigned exclusively for use on the Internet and there is no physical card.

In many countries , the use of debit cards has become so widespread that their volume has overtaken or entirely replaced cheques and, in some instances, cash transactions. The development of debit cards, unlike credit cards and charge cards, has generally been country specific resulting in a number of different systems around the world, which were often incompatible. Since the mid -2000s, a number of initiatives have allowed debit cards issued in one country to be used in other countries and allowed their use for internet and phone purchases.

Unlike credit and charge cards , payments using a debit card are immediately transferred from the cardholder's designated bank account , instead of them paying the money back at a later date.

Debit cards usually also allow for instant withdrawal of cash, acting as theATM card for withdrawing cash. Merchants may also offer cashback facilities to customers, where a customer can withdraw cash along with their purchase. Credit card

A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder's promise to pay for them. The issuer of the card creates a revolving account and grants a line of credit to the consumer ( or the user ) from which the user can borrow money for payment to a merchant or as a cash advance to the user.A credit card is different from a charge card: a charge card requires the balance to be paid in full each month. In contrast, credit cards allow the consumers a continuing balance of debt, subject to interest being charged. A credit card also differs from a cash card , which can be used like currency by the owner of the card. A credit card differs from a charge card also in that a credit card typically involves a third -party entity that pays the seller and is reimbursed by the buyer, whereas a charge card simply defers payment by the buyer until a later date.The size of most credit cards is 32 in ( 85.60 53.98mm ), conforming to the ISO/IEC 7810 ID- 1 standard . Credit cards have an embossed bank card number complying with the ISO/IEC 7812 numbering standard.

Mobile Banking Services

Banks offering mobile access are mostly supporting some or all of the following services : 1. Account Balance Enquiry 2. Account Statement Enquiries. 3. Cheque Status Enquiry. 4. Cheque Book Requests. 5. Fund Transfer between Accounts. 6. Credit / Debit Alerts. 7. Minimum Balance Alerts. 8. Bill Payment Alerts. 9. Bill Payment. 10. Recent Transaction History Requests. 11. Information Requests like Interest Rates /Exchange Rates.

One way to classify these services depending on the originator of a service session is the Push / Pull' nature.

Mobile payment

Mobile payment, also referred to as mobile money, mobile money transfer, and mobile wallet generally refer to payment services operated under financial regulation and performed from or via a mobile device. Instead of paying with cash, cheque , or credit cards, a consumer can use a mobile phone to pay for a wide range of services and digital or hard goods. Although the concept of using non coin -based currency systems has a long history,it is only recently that the technology to support such systems has become widely available.

Mobile payment is being adopted all over the world in different ways. Combined market for all types of mobile payments is expected to reach more than $600B globally by 2013, which would be double the figure as of February , 2011, while mobile payment market for goods and services, excluding contactless Near Field Communication or NFC transactions and money transfers , is expected to exceed $300B globally by 2013.

In developing countries mobile payment solutions have been deployed as a means of extending financial services to the community known as the "unbanked" or "underbanked" which is estimated to be as much as 50% of the world's adult population, according to Financial Access ' 2009 Report "Half the World is Unbanked". These payment networks are often used for micropayments. The use of mobile payments in developing countries has attracted public and private funding by organizations such as the Bill and Melinda Gates Foundation, USAID and Mercy Corps.

Direct mobile billing The consumer uses the mobile billing option during checkout at an e-commerce site such as an online gaming site to make a payment. After two- factor authentication involving a PIN and One- Time- Password ( often abbreviated as OTP ), the consumer's mobile account is charged for the purchase.

It is a true alternative payment method that does not require the use of credit / debit cards or pre registration at an online payment solution such as PayPal, thus bypassing banks and credit card companies altogether . This type of mobile payment method, which is extremely prevalent and popular in Asia , provides the following benefits.

Security- Two- factor authentication and a risk management engine prevents fraud.

Convenience - No pre-registration and no new mobile software is required.

Easy- It's just another option during the checkout process.

Fast- Most transactions are completed in less than 10 seconds.

Proven- 70% of all digital content purchased online in some parts of Asia uses the Direct Mobile Billing method.

Direct operator billing

Direct operator billing , also known as mobile content billing, WAP billing, and carrier billing, requires integration with the operator. It provides certain benefits:The operators already have a billing relationship with the consumers, the payment will be added to their bill.

Protect payment details and consumer identity

Better conversion rates

Reduced customer support costsfor merchants

One drawback : the payout rate will be much lower than with other payment providers . Examples from a popular provider:92% with Paypal

85 to 86% with Credit Card

45 to 91.7% with operator billing in the US, UK and some smaller European countries, but usually around 60%

More recently, Direct operator billing is being deployed in an in-app environment , where mobile application developers are taking advantage of the one-click payment option that Direct operator billing provides for monetising mobile applications . This is a logical alternative to credit card and Premium SMS billing.

SMS banking

SMS banking is a type of mobile banking, a technology- enabled service offering from banks to its customers, permitting them to operate selected banking services over their mobile phones using SMS messaging.

Push and pull messages

SMS banking services are operated using both push and pull messages. Push messages are those that the bank chooses to send out to a customer's mobile phone, without the customer initiating a request for the information. Typically push messages could be either Mobile marketing messages or messages alerting an event which happens in the customer's bank account, such as a large withdrawal of funds from the ATM or a large payment using the customer's credit card, etc.

Another type of push message is One time password ( OTPs ). OTPs are the latest tool used by financial and banking service providers in the fight against cyber fraud. Instead of relying on traditional memorized passwords, OTPs are requested by consumers each time they want to perform transactions using the online or mobile banking interface. When the request is received the password is sent to the consumers phone via SMS. The password is expired once it has been used or once its scheduled life -cycle has expired.

Typical push and pull services offered under SMS banking

Depending on the selected extent of SMS banking transactions offered by the bank, a customer can be authorized to carry out either non- financial transactions, or both and financial and non- financial transactions. SMS banking solutions offer customers a range of functionality, classified by push and pull services as outlined below.

Typical push services would include:Periodic account balance reporting (say at the end of month);

Reporting of salary and other credits to the bank account;

Successful or un-successful execution of astanding order;

Successful payment of achequeissued on the account

Typical pull services would include:

Account balance enquiry;

Mini statement request;

Electronic bill payment;

Electronic bill payment;

Transfers between customer's own accounts, like moving money from a savings account to a current account to fund a cheque;

Stop payment instruction on a cheque;

Requesting for anATM cardorcredit cardto be suspended;

De-activating a credit or debit card when it is lost or thePINis known to be compromised;

Foreign currency exchange rates enquiry;

Fixed deposit interest rates enquiry.

Quality of service in SMS banking

Because of the concerns made explicit above, it is extremely important that SMS gateway providers can provide a decent quality of service for banks and financial institutions in regards to SMS services. Therefore, the provision of Service Level Agreement ( SLA ) is a requirement for this industry; it is necessary to give the bank customer delivery guarantees of all messages , as well as measurements on the speed of delivery, throughput, etc . SLAs give the service parameters in which a messaging solution is guaranteed to perform.

Electronic money

Electronic money is money that is exchanged electronically. This involves the use of computer networks, the internet and digital stored value systems.

Examples of electronic money are Bank deposits, electronic funds transfer ( EFT ), direct deposit, payment processors, and digital currencies such as bitcoin.

Mobile Banking Funds Transfer

Now transfer funds by sending just one simple SMS instruction or using GPRS . ICICI Bank's Mobile Banking Fund Transfer makes account -to- account fund transfer anywhere in India easy and quick.

The ICICI Bank Edge

Service is available 24 x 7 x 365

You must be a registered Mobile Banking customer to access this service

Funds are transferred to payee instantly

No need to handle physical cash

No need to remember any keyword ( if your mobile is GPRS- enabled by Airtel, Hutch , BPL or Idea )

Mobile banking vs. Overall development

A more fundamental issue is the transformational power of banking or Mobile banking . The correlation between formal employment , high income and formal banking has been corroborated by numerous studies but what drives what ? There is little evidence of economic development triggered by M Banking . We adhere to the viewpoint that socio - economic development is the main thrust whereas access to basic banking services can support and lubricate economic activity , not create it .

A related issue is to view M - Banking as an entry point into formal banking and access to more sophisticated services . Even for this case we have come across no data to support this assumption . On the contrary , newly banked use their bank accounts for withdrawal only . The Mzansi and WIZZIT accounts are fairly new phenomena and many account holders have never had accounts previously , which mean the behaviour may change over time M banking and mobile phone business in general contribute directly to economic development by creating opportunity for income generation . Buying and selling of airtime has become a considerable job creator , in particular in urban areas .

M banking will consolidate the importance of the telecom sector in the economy . To conclude , sub Saharan Africa markets are willing to adopt technologies to facilitate M transactions rather than M banking for the time being . Consumption of M banking is a different ballgame than consuming M - transaction services from a regulatory , market organizing , and user perspective .

Mobile banking in the world

Mobile banking is use in many parts of the world with little or no infrastructure, especially remote and rural areas. This aspect of mobile commerce is also popular in countries where most of their population is unbanked . In most of these places, banks can only be found in big cities, and customers have to travel hundreds of miles to the nearest bank.

In Iran, banks such as Parsian, Tejarat, Mellat, Saderat ,Sepah, Edbi, and Bankmelli offer the service . Banco Industrial provides the service in Guatemala. Citizens of Mexico can access mobile banking with Omnilife, Bancomer and MPower Venture. Kenya's Safaricom ( part of the Vodafone Group ) has the M-Pesa Service, which is mainly used to transfer limited amounts of money, but increasingly used to pay utility bills as well. In 2009 ,Zain launched their own mobile money transfer business, known as ZAP, in Kenya and other African countries. In Somalia, the many telecom companies provide mobile banking, the most prominent being Hormuud Telecom and its ZAAD service.

Telen or Pakistan has also launched a mobile banking solution, in coordination with Taameer Bank, under the label Easy Paisa, which was begun in Q4 2009. Eko India Financial Services, the business correspondent of State Bank of India ( SBI ) and ICICI Bank, provides bank accounts, deposit, withdrawal and remittance services, micro-insurance, and micro-finance facilities to its customers ( nearly 80% of whom are migrants or the unbanked section of the population ) through mobile banking. In a year of 2010, mobile banking users soared over 100 percent in Kenya, China, Brazil and USA with 200 percent, 150 percent, 110 percent and 100 percent respectively.

Dutch Bangla Bank launched the very first mobile banking service in Bangladesh on 31 March 2011. This service is launched with Agent and Network support from mobile operators, Banglalink and Citycell. Sybase 365, a subsidiary of Sybase, Inc. has provided software solution with their local partner Neurosoft Technologies Ltd.

There are around 160 million people in Bangladesh, of which, only 13% have bank accounts . With this solution, Dutch- Bangla Bank can now reach out to the rural and unbanked population, of which, 45 % are mobile phone users.

Under the service , any mobile handset with subscription to any of the six existing mobile operators of Bangladesh would be able to utilize the service. Under the mobile banking services, bank - nominated Agents perform banking activities on behalf of the banks, like opening mobile banking account, providing cash services ( receipts and payments ) and dealing with small credits.

Cash withdrawal from a mobile account can also be done from an ATM validating each transaction by mobile phone & PIN instead of card & PIN. Other services that are being delivered through mobile banking system are person -to- person ( e.g. fund transfer ), person- to- business ( e.g. merchant payment , utility bill payment ), business- to -person ( e.g. salary / commission disbursement ), government -to -person ( disbursement of government allowance ) transactions.In May 2012 ,Laxmi Bank Limited launched the very first mobile banking in Nepal with its product Mobile Khata. Mobile Khata runs on a third- party platform called Hello Paisa that is interoperable with all the telecoms in Nepal viz. Nepal Telecom ,NCell, Smart Tel and UTL , and is also interoperable with various banks in the country.

The initial joining members to the platform after Laxmi Bank Limited were Siddartha Bank, Bank of Kathmandu, Commerz and Trust Bank Nepal and International Leasing and Finance Company. Currently, the users of Hello Paisa can Buy movie tickets, shop online, buy mobile recharge, pay bills ( for services such as ADSL , DTH service, landline phone, postpaid mobile ), make merchant payments, transfer money etc . On June 2013, one of the leading money transfer service provider in Nepal, "Prabhu Money Transfer", joined Hello Paisa to offer its Financial Services through Hello Paisa network . Prabhu Money Transfer will add 3500 agents across the nation to the Hello Paisa network.

Hello Paisa platform is interoperable between multiple banks and multiple telecoms, and is the first of its kind in the world of Mobile Banking so far. The platform was nominated as one of the top three innovators of the year 2012 by SIDA in IAP program.Barclays offers a service called Barclays Pingit, which allows transfer of money from the United Kingdom to many parts of the world with a mobile phone.

Companies offering Mobile Banking

ICICI BANK

HDFC BANKAXIS BANKBANK OF BARODASBI BANK BANK OF INDIAPUNJAB NATIONAL BANKIDBI BANKCANARA BANK

Future of Mobile Banking1 GROWTHJuniper Research maintains that by 2017 in excess of a billion mobiles will be participating users of mobile banking. Though some banks remain largely tentative in committing finances towards mobile banking, its clear from these figures that the sheer weight and untapped potential of the market will result in a string of significant investments.2 INTEGRATIONComscore reports of approximately 44 percent of UK smartphone users having used their device for shopping activities while in a store. Though traditional retail finds itself at the brunt of digital shopping platforms, its clear from these statistics that the two are not necessarily mutually exclusive.3 POPULARITYLightspeed Research have recently recorded a total of 56 percent in UK tablet owners who use finance or banking apps, whereas Compete claims of a comparatively steeper 57 percent of US smartphone users using mobile banking features. These reports demonstrate an increase in consumer confidence and in reliance on mobile banking.4 ENDORSEMENTMillennial Media, in a recent survey, have claimed that mobile finance users are 95 percent more likely to be influenced by celebrity endorsements than the total mobile user base. This surprising statistic demonstrates a markedly changed way in which banking is to be marketed in the near future; relying less so on figures and more on endorsement.

5 LOYALTYMillennial Media maintain that 50 percent of mobile banking and finance users are to stay singularly loyal to their preferred banking company. Bearing this in mind, banks will be focusing more so on innovation and usability in an effort to differentiate themselves and to improve on competitors.6 ADVERTISINGAccording to Millennial Media, spending on mobile finance advertising rose by 300 percent in 2011. With such a steep rise in advertising costs banks will be forced, more so than before, to ensure each advert is to have an overriding emphasis on lead generation above all else.7 USABILITYAccording to a recent Pew Research Center report, 90 percent of mobile banking users have used their devices to check their balance and to view recent transactions. Identifying specific banking functions that take precedence over others is crucial in the arrangement and direction of a mobile banking site or app.8 PAYMENTPew Research Centre, in a recent report, found that only 12 percent of mobile users have gone so far as to make payments on a mobile device. This report indicates that users remain cautious in making mobile transactions; in this sense its crucial that banks dictate a strong sense of security and of authority in their branding.9 ATLANTIC RIDGEMarket Strategies maintain that 62 percent of US smartphone owners trust PayPal with mobile payments, as opposed to the UKs 45 percent.

Trade in servicesTrade in Services refers to the sale and delivery of an intangible product, called a service, between a producer and consumer. Trade in services takes place between a producer and consumer that are, in legal terms, based in different countries , or economies , this is called International Trade in Services.

International trade in services is defined by the Four Modes of Supply of the General Agreement on Trade in Services ( GATS ).

(Mode 1) Cross border trade, which is defined as delivery of a service from the territory of one country into the territory of other country;

(Mode 2) Consumption abroad - this mode covers supply of a service of one country to the service consumer of any other country;

(Mode 3) Commercial presence - which covers services provided by a service supplier of one country in the territory of any other country, and

(Mode 4) Presence of natural persons which covers services provided by a service supplier of one country through the presence of natural persons in the territory of any other country.

A "Natural person" is a human being, as distinct from legal persons such as companies or organisations . Countries can freely decide where to liberalize on a sector by -sector basis , including which specific mode of supply they want to cover for a given sector.The tourism sector, the financial services sector and the telecommunications services sector are examples of services sectors.

During the Uruguay Round of the General Agreement on Tariffs and Trade ( GATT ), the General Agreement on Trade in Services was drafted, and became enshrined as one of the four pillars of the international treaty comprising the World Trade Organization Agreement in 1995.

Regional trade in services agreements are also negotiated and signed between regional economic groupings such as CARICOM, North American Free Trade Agreement ( NAFTA ) and ASEAN. Some examples of trade in service would be: banking, check ups done by a doctor and IT The Indian Trade Service ( ITS ), Group A Civil Service, was created as a specialized cadre to handle India's international trade & commerce on the basis of the recommendations of the Mathur Committee ( Study Team on the Import and Export Trade Control Organization headed by Sri H.C. Mathur , Member of Parliament ) in 1965. At present Directorate General of Foreign Trade ( DGFT ), Ministry of Commerce is the cadre controlling authority of the ITS, has many regional offices across India , and plays a significant role in India's foreign trade with its policy formulation and implementation.

The Department is headed by a Secretary who is assisted by a Special Secretary & Financial Adviser, three Additional Secretaries, thirteen Joint Secretaries and Joint Secretary level officers and a number of other senior officers.

The Department is functionally organized into the following eight Divisions:

1. Administration and General Division

2. Finance Division

3. Economic Division

4. Trade Policy Division

5. Foreign Trade Territorial Division

6. State Trading & Infrastructure Division

7. Supply Division

8. Plantation Division.

Formulating the foreign trade policy which looks at the gamut of trade promotion and facilitation activities intended to streamline the chain of economic activities which would boost India's external trade. Implementing of the foreign trade policy through the regional offices of the Directorate General of Foreign Trade which include cognate activities such as remission of the duties levied on exports, issuance of permissions for imports / exports, trade facilitation, interface with various trade agencies and apex chambers of commerce, interaction with Customs and State governments, interaction with SEZs, grievance redressal etc.

Trade policy negotiations for India at the multilateral forum of the World Trade Organization. These negotiations call for a deft balancing of the needs of the domestic industry for ensuring adequate protection and those intended to boost exports not merely for earning foreign exchange but also to invigorate economic growth and ensure wider employment opportunities.

Negotiating bilateral and multilateral trade agreements with trading partners including the formulation and implementation of FTAs, PTAs, TTTs EHPs [ disambiguation needed ] etc.

Investigating dumping by trading nations and computation of the anti dumping duties. Officers of the Indian Trade Service manning the Directorate General of Anti Dumping ( DGAD ) have been effectively controlling dumping by the trading nations and India is the second largest imposer of anti - dumping duties.

Export promotion activities under the purview of the Export Promotion Councils and the apex chambers of export promotion like FIEO, FICCI etc. These include expertise in organizing the Buyer - Seller meets Exhibitions, Participation in Fairs, providing policy inputs to the government etc.

Creating an effective interface mechanism between the government and the primary stakeholders through institutions such as the Board of Trade Electronic Data Interchange ( EDI ) in trade transactions in order to impart transparency , save time and ensure economy. Quality management and quality assurance though effective inspection and risk assessment of export consignments.

Accelerate your cross-border supply chain with our global trade services

Control costs, reduce the risk of trade penalties and fines, and clear inbound and outbound customs faster. Our global trade services can help you automate and streamline your trade processes for improved international operations, ongoing compliance, and tight integration throughout your cross - border supply chain regardless of your industry or business size.

Reduce the cost and effort of global trade compliance

Eliminate time- consuming , manual tasks and boost productivity with automation

Minimize fines and penalties from trade compliance violations

Protect company brand and image , and avoid trade with sanctioned or denied parties

Speed outbound and inbound customs clearance, reducing unnecessary delays

Increase customer satisfaction and exceed partner expectations.

Services tradeRanging from architecture to voice - mail telecommunications and to space transport, services are the largest and most dynamic component of both developed and developing country economies. Important in their own right, they also serve as crucial inputs into the production of most goods. Their inclusion in the Uruguay Round of trade negotiations led to the General Agreement on Trade in Services ( GATS ). Since January 2000, they have become the subject of multilateral trade negotiations.

Work in the WTO

The services negotiations : A new services round began in early 2000. The mandate, negotiating proposals and developments in the negotiations.

The activities of the Services Council and its subsidiary bodies : Including the Committee on financial services, the Working Party on specific commitments , the Working Group on domestic regulation , and the Working Party on GATS rules.

Post- Uruguay Round negotiations ( 1994-97 ) : After the 1986 94 Uruguay Round, negotiations on maritime transport, the movement of natural persons, financial services and telecommunications continued.

Dataset of services commitments in regional trade agreements (RTAs)

The dataset shows the level of market access committed by parties to each RTA, by mode of supply and by sector , in comparison with achievements in services in the WTO. The dataset also shows the highest level of market access commitments by each WTO member across all its RTAs.First published in 2008 , the dataset has been expanded to reflect the continuing growth in services RTAs.The current dataset was used in the World Trade Report 2011.

Services Commitments in Preferential Trade Agreements: An Expanded Dataset

Martin Roy ( WTO Staff Working Paper ) briefly presents the overall trends for services commitments in RTAs, as based on the extended dataset , and explains the methodology used.

Merchandise trade and commercial servicesDatabases and Time SeriesStatistics Database (SDB) : Online database containing time series on international trade, country trade, tariff and services profiles

Annual publicationsInternational Trade Statistics : Comprehensive overview of world merchandise and services trade.

Trade Profiles : Country by country data on trade flows and trade policy measures.

World and Regional Merchandise Export Profiles: Data on exports by region

World Merchandise Trade Commodity Profiles : Leading exporters and importers by product group

Interactive statistics and maps

International Trade and Market Access Data interactive tool : An interactive application for visualizing WTO international trade and market access data.

World maps: Interactive maps on merchandise trade, commercial services trade , tariffs and GDP.

Services ProfilesThe Services Profiles provide standard information on key "Infrastructure services" ( transportation, telecommunications, finance and insurance ). Around 90 indicators relating to investment, market performance , production, employment , trade , as well as performance rankings are available for over 125 economies. Coverage will be gradually extended as information becomes available.

Made in the WorldThe Made in the World initiative has been launched by the WTO to support the exchange of projects , experiences and practical approaches in measuring and analysing trade in value added.Today, companies divide their operations across the world , from the design of the product and manufacturing of components to assembly and marketing , creating international production chains . More and more products are Made in the World rather than Made in the UK or Made in France . .The challenge is to find the right statistical bridges between the different statistical frameworks and national accounting systems to ensure that international interactions resulting from globalization are properly reflected and to facilitate cross border dialogue national decision makers

Towards a Services Trade Restrictiveness Index (STRI)

The services sector is essential to our economy and society. Teachers, lawyers , architects and medical staff are all service providers, while businesses use the services of specialists in areas such as transport , information technology and accountancy. Services generate more than two thirds of gross domestic product ( GDP ) globally, employ the most workers in major economies and create more new jobs than any other sector.Through international trade , services can transcend national borders and compete in global markets. Trade in services drives the exchange of ideas, know - how and technology . It helps firms cut costs , increase productivity and boost competitiveness. Consumers benefit from lower costs and greater choice.However, international trade in services is often restricted by barriers such as domestic regulations. By Identifying measures that restrict services trade, governments can rectify this and work towards making services markets more open and therefore more efficient

Why a Services Trade Restrictiveness Index (STRI)?

If more open and efficient services markets bring obvious advantages , why has progress been so slow in addressing these restrictions ? One reason is a lack of systematic information on barriers to trade in services. These barriers are diverse and require detailed , industry - specific knowledge.

The STRI can help identify which policy measures restrict trade The STRI can also help governments identify best practice and then focus their reform efforts on priority sectors and measures.

In embarking on services negotiations , countries must prepare their requests and offers under the General Agreement on Trade in Services ( GATS ) of the World Trade Organization ( WTO ). To do this , they need concrete information on inefficient , trade restrictive policies in their own country and in their export markets , so as to establish mutually beneficial commitments.

STRI can prepare policy makers for services negotiations by equipping them with measures to forecast impacts and appraise the outcomes of alternative scenarios of reform . To convince domestic stakeholders of the need for reform , it is essential to communicate the benefits of services liberalisation and put in place policies to mitigate the costs.

The STRI project will provide policy makers and negotiators with the information and measurement tools they require to identify barriers , improve domestic policy environment , negotiate international agreements and open up international trade in services .

Services Trade Regulatory Database:

The STRI database will be a unique resource providing internationally comparable current information on regulatory policies affecting trade in services.

Features of the STRI database:

Based on regulations on the books , rather than the GATS or RTA commitments

Covers all trade - related domestic regulation

Documents the source ( law , regulation , rule , administrative decision )

Each measure is verified with the country , and peer reviewed by all other countries

Updates and maintains measures current , so that regulatory reforms are reflected

Provides explanations and definitions of each measure included in the database

Services Trade Restrictiveness Index:

The STRIs translate the qualitative information of the Regulatory Database into quantitative measures using an elaborate scoring and weighting mechanism . Providing a measurement tool for trade in services barriers the indices capture the essence of restrictiveness at a glance , in order to policy makers identify areas of strengths and weaknesses.

Features of the STRIs:

Indices take the value from 0 to 1 , where 0 is completely open and 1 is completely closed

Indices allow comparison of trade restrictiveness across within and between countries

Since the STRI will be institutionalized and not just a one - time exercise , the indices will also record changes over time, identifying top reformers in terms of sectors and countries

Planned coverage

The STRI is being developed for OECD member countries, and for emerging economies that are significant services traders in the global economy. STRI currently covers computer services , telecommunications , construction , professional services ( engineering , architecture , legal accounting) , transport ( air, maritime, rail, road, courier ) , distribution and audiovisuals in 34 countries. Ultimately , all economically important services sectors will be incorporated.

What is required to implement your plans.

About 70 - 80 Export Development Counsellors are being recruited by Business Links to offer specialist help and advice. They will work with their customers to plan and implement a suitable export strategy and develop international trade potential.

There are many other services , some of which are specifically tailored to the needs of particular groups of customers . The services are used extensively. For example, In 1996 / 1997 OTS supported 10,500 participants in overseas trade fairs and 2,686 participants used the Outward Missions Service.

The aim is to provide a comprehensive service at each stage of the export process , whether it is with the initial planning , research and development , the promotion of products , the appointment of agents or the development of further markets.

Conclusion

For many years different departments and agencies were offering business organisations various types of services . Businesses were faced with a bewildering range of advice which may have deterred some businesses from seeking help.Access to Overseas Trade Services is available today through Business Links. Business Link s were launched in July 1992 as a single point of access for business support services . Each Business Link represents a partnership between the key local enterprise support organisations , TECs, Chambers of Commerce , Enterprise Agencies and Local Authorities.Their aim is to provide a range of services for businesses from start - up information and advice to innovation and technological services .

. The mobile and wireless market has been one of the fastest growing markets in the world. The arrival of technology and the escalating use of mobile and smart phone devices, has given the banking industry a new platform. Connecting a customer anytime and anywhere to their money and needs is a must have service that has become an unstoppable necessity. This worldwide communication is leading a new generation of strong banking relationships. The banking world can achieve superior interactions with their public base if they accommodate all their customer needs. They have a unique challenge to keep their customer alliances and keeping up with the new technologies, and competitive strategies that other banks also have to offer the public. Conveniences of services plus outside locations like ATMS are crucial to every banks success. Meeting all challenges including safety and security are perfect examples of good banking strategies.

Case studiesLG Telecom, South KoreaIn terms of the evolution of services being offered on mobile applications, South Korea is showing the way. The big push came when LG Telecom Ltd. , the smallest of Korea's three mobile service providers teamed up with the Kookmin bank to launch the Bank on' service. Under this scheme mobile users were able to use smart chips embedded in cell phones for accessing all of the transaction and enquiry based services. The chip- based service automated the authentication of users when they accessed their bank's tickets, merchandise and even haircuts.Reliance Infocomm, IndiaWhen Reliance Infocomm, India rolled out its CDMA network, ( at the time the mobile market in India was still in its infancy, and data services were almost never heard off ) it made sure that all handsets supported Java. The Reliance application platform, also known as R-World brought Java compatibility even to the lower end phones.Reliance used a novel way to overcome the memory limitations of lower- end mobile phones, which hampered deploying of multiple standalone J2ME based clients. Instead of storing applications statically on their cell phones, users access a single menu based application called R-World, which connects them to the Reliance servers. Using the menu based user interface, mobile users select the application, which they want to run and download them over the to cell phones. Reliance tied up with two of the popular private sector banks, HDFC and ICICI, to provide a host of their enquiry and transaction based mobile banking services through its R- World environment.

Questionaries

How many customer use mobile banking services

Mobile and online

Mobile(not online)

Online (not mobile)

Neither mobile nor online

MOBILE BANKERS ARE BALANCE CHECKERS?

3. Do you think mobile banking services are cheaper than traditional banking services?Yes

noChart1

0.8

0.1

Column1

Sheet1

Column1

yes80%

no10%

To resize chart data range, drag lower right corner of range.

4. Who provide a mobile banking services?A bank

A mobile operator

Not sureChart1

40

40

10

Column1

Sheet1

Column1

a bank40

a mobile operator40

not sure10

To resize chart data range, drag lower right corner of range.

5. How Mobile Banking Deployment Among Large Banks?Account balanceInter-bank transferBill payAlertsSMS marketingInter-bank transferP2P transfer

Appendix

How many customer use mobile banking services?Mobile and online

Mobile(not online)

Online (not mobile)

Neither mobile nor online

2. MOBILE BANKERS ARE BALANCE CHECKERS?Once2 - 4 times5 - 9 times10+ times

3. Do you think mobile banking services are cheaper than traditional banking services?Yes

no

4. Who provide a mobile banking services?A bank

A mobile operator

Not sure

How Mobile Banking Deployment Among Large Banks?

Account balance

Inter-bank transfer

Bill pay

Alerts

SMS marketing

Inter-bank transfer

P2P transfer

BibliographyReferences book:Introduction to banking - vijayarangavan Iyengar.Banking N.T Somashekar, New Age International PublisherCronin, Mary J. (1997). Banking and Finance on the Internet, John Wiley and Sons.Gandy, T. (1995): "Banking in e-space"

http://www.dnsbank.in/mobile-banking.htmhttp://www.infosys.comhttp://mobile.onlinesbi.com"Trade Finance Guide: A Quick Reference for U.S. Exporters", International Trade Administration, U.S. Department of Commerce.

www.rbi.com