INTRODUCTION

The Indian banking sector has emerged as one of the strongest drivers of India’s economic

growth. The Indian banking industry (US$ 1.22 trillion) has made outstanding advancement in

last few years, even during the times when the rest of the world was struggling with financial

meltdown. State Bank Of India is the largest nationalized Bank in the country in terms of Branch

Network, Total Business, Advances, Operating Profit and Low Cost CASA Deposits. The ICICI

is amongst the first to receive an 'in principle' approval from the Reserve Bank of India (RBI) to

set up a bank in the private sector, as part of the RBI's liberalization of the Indian Banking

Industry in 1994.

E-banking:-

Internet banking (or E-banking) means any  user with a personal computer and

a browser can get connected to his banks website to perform any of the virtual banking

functions. In Internet banking system the bank has a centralized database that i s web-

enab led . Internet banking is the term used for new age banking system. Internet banking is

also called as online banking and it is an outgrowth of PC banking. Internet banking uses the

internet as the delivery channel by which to conduct banking activity, for example, transferring

funds, paying bills, viewing checking and savings account balances, paying mortgages and

purchasing financial instruments and certificates of deposits. Internet banking is a result of

explored possibility to use internet application in one of the various domains of commerce. It is

difficult to infer whether the internet tool has been applied for convenience of bankers or for the

customers’ convenience. But ultimately it contributes in increasing the efficiency of the banking

operation as well providing more convenience to customers. Without even interacting with the

bankers, customers transact from one corner of the country to another corner. There are many

advantages of online Banking. It is convenient, it isn’t bound by operational timings, there are no

geographical barriers and the services can be offered at a minuscule cost (IAMAI’s, 2006).

Electronic banking has experienced explosive growth and has transformed traditional practices in

banking.

In its very basic form, e-banking can mean the provision of information about a bank and its

services via a home page on the World Wide Web (WWW). More sophisticated e-banking

services provide customer access to accounts, the ability to move their money between different

accounts, and making payments or applying for loans via e-Channels. The term e-banking will

be used in this book to describe the latter type of provision of services by an organization to its

customers. Such customers may be either an individual or another business. To understand the

electronic distribution of goods and services, the work of Report and Sviokla (1994; 1995) is a

good starting point. They highlight the differences between the physical market place and the

virtual market place, which they describe as an information-defined arena. In the context of e-

banking, electronic delivery of services means a customer conducting transactions using online

electronic channels such as the Internet? Many banks and other organizations are eager to use

this channel to deliver their services because of its relatively lower delivery cost, higher sales and

potential for offering greater convenience for customers. But this medium offers many more

benefits, which will be discussed in the next section. A large number of organizations from

within and outside the financial sector are currently offering e-banking which include delivering

services using Wireless Application Protocol (WAP) phones and Interactive Television. Many

people see the development of e-Banking as a revolutionary development, but, broadly speaking,

e-banking could be seen as another step in banking evolution. Just like ATMs, it gives

consumers another medium for conducting their banking. The fears that this channel will

completely replace existing channels may not be realistic, and experience so far shows that the

future is a mixture of “clicks (e-banking) and mortar (branches)”. Although start up costs for an

internet banking channel can be high, it can quickly become profitable once a critical mass is

achieved.

Fig.1.1 E-Banking Services

EVOLUTION OF E-BANKING

There have been significant developments in the e-financial services sector in the past 30 years.

According to Devlin (1995), until the early 1970s functional demarcation was predominant with

many regulatory restrictions imposed. One main consequence of this was limited competition

both domestically and internationally. As a result there was heavy reliance on traditional branch

based delivery of financial services and little pressure for change. This changed gradually with

deregulation of the in-E-Banking Management IGI Global, distributing in print or electronic

forms without written permission of IGI Global is prohibited industry during 1980s and 1990s,

whilst during this time, the increasingly important role of information and communication

technologies brought stiffer competition and pressure for a faster pace of change. The Internet is

a relatively new channel for delivering banking services.

INTRODUCTION TO MOBILE BANKING

Mobile Banking (also known as M-Banking, m-banking, SMS Banking, etc.) is a term used for

performing balance checks, account transactions, payments, etc., via a mobile device such as a

mobile phone. It was Internet Banking, which ushered in a new era in banking convenience by

bringing the entire operations to the computer, and now mobile banking promises to take it to the

next level. Internet Banking helped give the customers anytime access to their banks. Customers

could check out their account details, 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 if we

consider most of the developing countries of Asia like India and China.

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. The main reason that Mobile Banking

scores over Internet Banking is that it enables 'Anywhere Anytime 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 to 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 if 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. According to the Cellular Operators' Association of India (COAI)

the mobile subscriber base in India hit 40.6 million in the August 2004. In September 2004 it

added about 1.85 million more. The explosion as most analysts say, is yet to come as India has

about one of the biggest untapped markets. China, which already witnessed the mobile boom, is

expected to have about 300 million mobile users by the end of 2004. South Korea is targeted to

reach about 42 million mobile users by the end of 2005. All three of these countries have seen

gradual roll-out of mobile banking services, the most aggressive being Korea which is now

witnessing the roll-out of some of the most advanced services like using mobile phones to pay

bills in shops and restaurants.

Mobile banking has been at the threshold of a revolution for some time. While many operators,

as well as banks, had introduced mobile banking applications, it never became popular due to

security concerns. The number of people using mobile banking services has jumped from under

10,000 to 120,000 in two years. While the trend is growing, lack of awareness of services, apart

from perceived security issues are inhibiting faster take-off. There is yet another reason why the

service will not spread like wild fire – the credit environment. RBI has been tightening the banks,

which have been offering unsecured and secured loans with minimal or no customer verification.

With RBI tightening liquidity, personal loan defaults have reached 9% and banks will be very

wary of giving you a credit card on the mobile.

Though RBI has specified norms for the banks to provide secure technology and ensure

'confidentiality, integrity, authenticity and non-reputability', security remains a major concern as

well as a hurdle. However, with a few precautions and safety measures, users can have a safer m-

banking experience. The m-PIN, which is issued by the bank, should be memorized and the PIN-

mailer destroyed immediately. Change your m-PIN regularly and do not share it with anyone.

The PIN is valid only for the corresponding phone number, which means users cannot access

their accounts using other hand-sets. Thus, in case of a loss/theft of mobile phone, inform the

mobile phone operator as well as the bank to block the banking application.

Similarly, you should also inform the bank, if you change your hand-set or SIM card. Reserve

Bank of India has set-up the Mobile Payments Forum of India (MPFI), a 'Working Group on

Mobile Banking' to examine different aspects of Mobile Banking (M-banking). The Group had

focused on three major areas of M banking, i.e.,

(i) Technology and security issues,

(ii) Business issues, and

(iii) Regulatory and supervisory issues.

Each stake-holder group has the following expectations: -

a) To meet the following expectations of Consumer: -

· Personalized service

· Minimal learning curve

· Trust, privacy and security

· Ubiquitous - anywhere, anytime and any currency

· Low or zero cost of usage

· Interoperability between different network operators, banks and devices

· Anonymity of payments like cash

· Person to person transfers

b) To meet the following expectations of Merchant: -

· Faster transaction time

· Low or zero cost in using the system

· Integration with existing payment systems

· High security

· Being able to customize the service

· Real time status of the mobile payment service

· Minimum settlement and payment time

c) To meet the following expectations of Telecom Network Providers: -

· Generating new income by increase in traffic

· Increased Average Revenue Per User (ARPU) and reduced churn (increased loyalty)

· Become an attractive partner to content providers

d) To meet the following expectations of Mobile Device Manufacturers: -

· Large market adoption with embedded mobile payment application

· Low time to market

· Increase in Average Revenue Per User (ARPU)

e) To meet the following expectations of Banks: -

· Network operator independent solutions

· Payment applications designed by the bank

· Exceptional branding opportunities for banks

· Better volumes in banking - more card payments and less cash transactions

· Customer loyalty

f) To meet the following expectations of Software & Technology Providers:

· Large markets

g) To meet the following expectations of Government: -

· Revenue through taxation of m-payments

· Standards

There are lots of evidences that not only big cities are using mobile banking, but even thousands

of people from rural areas across 12 states are also likely to get their social security pension and

wages paid under the National Rural Employment Guarantee Act (NREGA) Scheme with the

help of mobiles over the coming few months. Bharti Airtel, too, is in the process of tying-up with

two leading banks to extend its mobile remittance services to rural areas, according to its

President (Mobile Services), Sanjay Kapoor. Airtel has already partnered with the Indian

Farmers' Fertilizers Cooperative Limited (IFFCO) to set up IFFCO Kisan Sanchar Limited in

Rajasthan. Under this initiative, the cooperative department will provide mobile hand-sets to

farmers at marginal price through its out-lets in the rural areas. These handsets would be loaded

with green SIM cards, which will flash daily updates on agricultural practices and weather

forecasts free of cost.

A MOBILE BANKING CONCEPTUAL MODEL

Mobile banking is defined as:

"Mobile Banking refers to provision and availment of banking- and financial services with the

help of mobile telecommunication devices.The scope of offered services may include facilities to

conduct bank and stock market transactions, to administer accounts and to access customised

information."

According to this model Mobile Banking can be said to consist of three interrelated

concepts:

· Mobile Accounting

· Mobile Brokerage

· Mobile Financial Information Services

Most services in the categories designated Accounting and Brokerage are transaction-based. The

non-transaction-based services of an informational nature are however essential for conducting

transactions - for instance, balance inquiries might be needed before committing a money

remittance.

The accounting and brokerage services are therefore offered invariably in combination with

information services. Information services, on the other hand, may be offered as an independent

module. The lifespan of all good ideas can be broken into five phases: concept, prototype, pilot,

pre-production, commercial deployment. Few ideas ever reach the stage of commercial

deployment, because they are just not viable, or have been ill conceived or badly deployed. For

some or other reason, mobile banking has been over-saturated with concepts and to some degree

with prototypes. The idea of utilising the phone for financial transactions are so obvious that

every man and his dog have developed a new concept or have submitted a patent somewhere.

Everyone of them believing that they have stumbled on the ultimate approach.

The reality is that very few of these ever progress past the rudimentary prototype stage. And it is

actually quite easy to demonstrate simple mobile banking functionality in a prototype

environment. Some of the challenges that often have not even been identified and hence solved

are issues related to integration, regulatory/legal and usability. These are sometimes addressed in

the few prototypes that migrate to pilot.

A pilot usually consists of a few hundred, maybe thousands of subscribers performing

transactions in a controlled environment with limited functionality. Even if pilots work, they

often don't address important aspects like scalability and system responses to unpredicted actions

or break-downs. What happens in the case of transactions that have been lost and how does the

system respond to situations where a component is not available. Important legal aspects are also

often not addressed yet at this stage. Pilots seldom uncovers the real system challenges and at

best highlights key elements regarding user experience.

During the pre-production stage business processes and system reliability and robustness should

be attended to. Many different business processes are required if a system is to be deployed in a

production environment. This should include registration, dispute resolutions, service activation

to name only a few. In examples that we have seen in the market some deployments have

neglected key processes leading to very difficult deployments and disillusioned clients. What

looked easy during pilot now turns out to be a nightmare of realities.

It is only when a solution is deployed commercially that they most important element of any idea

is tested: Can it make money? Mobile banking solutions that are not profitable will fail

ultimately. And this is where we at Fundamo can really contribute to making a difference in

deploying successful mobile payment/banking solutions. We have seen what works and what

does not. We have built powerful business modeling tools and have helped many customers to

culminate with commercially successful deployments of novel ideas. We have seen many

competing products fail because they were not commercially viable

TRENDS IN MOBILE BANKING

The advent of the Internet has revolutionized the way the financial services industry conducts

business, empowering organizations with new business models and new ways to offer 24x7

accessibility to their customers.

The ability to offer financial transactions online has also created new players in the financial

services industry, such as online banks, online brokers and wealth managers who offer

personalized services, although such players still account for a tiny percentage of the industry.

Over the last few years, the mobile and wireless market has been one of the fastest growing

markets in the world and it is still growing at a rapid pace. According to the GSM Association

and Ovum, the number of mobile subscribers exceeded 2 billion in September 2005, and now

exceeds 2.5 billion (of which more than 2 billion are GSM).

According to a study by financial consultancy Celent, 35% of online banking households will

be using mobile banking by 2010, up from less than 1% today. Upwards of 70% of bank center

call volume is projected to come from mobile phones. Mobile banking will eventually allow

users to make payments at the physical point of sale. "Mobile contactless payments” will make

up 10% of the contactless market by 2010.

Many believe that mobile users have just started to fully utilize the data capabilities in their

mobile phones. In Asian countries like India, China, Bangladesh, Indonesia and Philippines,

where mobile infrastructure is comparatively better than the fixed-line infrastructure, and in

European countries, where mobile phone penetration is very high (at least 80% of consumers

use a mobile phone), mobile banking is likely to appeal even more.

This opens up huge markets for financial institutions interested in offering value added services.

With mobile technology, banks can offer a wide range of services to their customers such as

doing funds transfer while travelling, receiving online updates of stock price or even performing

stock trading while being stuck in traffic. According to the German mobile operator Mobilcom,

mobile banking will be the "killer application" for the next generation of mobile technology.

Mobile devices, especially smartphones, are the most promising way to reach the masses and to

create “stickiness” among current customers, due to their ability to provide services anytime,

anywhere, high rate of penetration and potential to grow. According to Gartner, shipment of

smartphones is growing fast, and should top 20 million units (of over 800 million sold) in 2006

alone.

In the last 4 years, banks across the globe have invested billions of dollars to build sophisticated

internet banking capabilities. As the trend is shifting to mobile banking, there is a challenge for

CIOs and CTOs of these banks to decide on how to leverage their investment in internet banking

and offer mobile banking, in the shortest possible time.

The proliferation of the 3G (third generation of wireless) and widespread implementation

expected for 2003–2007 will generate the development of more sophisticated services such as

multimedia and links to m-commerce services.

MOBILE BANKING SERVICES

Mobile banking can offer services such as the following:

Account Information

1. Mini-statements and checking of account history

2. Alerts on account activity or passing of set thresholds

3. Monitoring of term deposits

4. Access to loan statements

5. Access to card statements

6. Mutual funds / equity statements

7. Insurance policy management

8. Pension plan management

9. Status on cheque, stop payment on cheque

10. Ordering check books

11. Balance checking in the account

12. Recent transactions

13. Due date of payment (functionality for stop, change and deleting of payments)

14. PIN provision, Change of PIN and reminder over the Internet

15. Blocking of (lost, stolen) cards

Payments, Deposits, Withdrawals, and Transfers

1. Domestic and international fund transfers

2. Micro-payment handling

3. Mobile recharging

4. Commercial payment processing

5. Bill payment processing

6. Peer to Peer payments

7. Withdrawal at banking agent

8. Deposit at banking agent

Especially for clients in remote locations, it will be important to help them deposit and withdraw

funds at banking agents, i.e., retail and postal outlets that turn cash into electronic funds and vice

versa. The feasibility of such banking agents depends on local regulation which enables retail

outlets to take deposits or not.

A specific sequence of SMS messages will enable the system to verify if the client has sufficient

funds in his or her wallet and authorize a deposit or withdrawal transaction at the agent. When

depositing money, the merchant receives cash and the system credits the client's bank account or

mobile wallet. In the same way the client can also withdraw money at the merchant: through

exchanging sms to provide authorization, the merchant hands the client cash and debits the

client's account.

Investments

1. Portfolio management services

2. Real-time stock quotes

3. Personalized alerts and notifications on security prices

Support

1. Status of requests for credit, including mortgage approval, and insurance coverage

2. Check (cheque) book and card requests

3. Exchange of data messages and email, including complaint submission and tracking

4. ATM Location

Content Services

1. General information such as weather updates, news

2. Loyalty-related offers

3. Location-based services

Based on a survey conducted by Forrester, mobile banking will be attractive mainly to the

younger, more "tech-savvy" customer segment. A third of mobile phone users say that they may

consider performing some kind of financial transaction through their mobile phone. But most of

the users are interested in performing basic transactions such as querying for account balance and

making bill payment.

One way to classify these services depending on the originator of a service session is the

‘Push/Pull' nature. ‘Push' is when the bank sends out information based upon an agreed set of

rules, for example your banks sends out an alert when your account balance goes below a

threshold level.

‘Pull' is when the customer explicitly requests a service or information from the bank, so a

request for your last five transactions statement is a Pull based offering.

The other way to categorize the mobile banking services, by the nature of the service, gives us

two kind of services – Transaction based and Enquiry Based. So a request for your bank

statement is an enquiry based service and a request for your fund's transfer to some other account

is a transaction based service. Transaction based services are also differentiated from enquiry

based services in the sense that they require additional security across the channel from the

mobile phone to the banks data servers.

The new generation of mobile phones offers the speedy GPRS, EDGE or 3G data transmission

standards and has large, high-definition colour displays. Prices are coming down and services

and features are now considerably easier to handle on the mobile. Mobile Banking, in particular,

has finally become a fast, user-friendly and affordable service. India's leading telecom companies

started their services for Mobile Banking, basically they use these services as a marketing tool to

advertise there services on this basis. Here are few giants of telecom industries in India who are

offering Mobile Banking in various states.

Utility of Mobile Banking from Banks’

Perspective

At this stage it would be relevant to understand the usefulness of Mobile Banking from the

banks’perspective. It is therefore imperative to understand the business environment in which

banks operate and to identify customer groups that the banks may seek to target via Mobile

Banking.

Intensified Competition in the Banking Sector:

Bank products are of immaterial nature sold increasingly with the help of computer networks

spanning across the globe.The global networks provide the customer with world-wide services,

for instance the use of credit cards while abroad. The creation of an EU-wide single domestic

market has led to intensification of competition in the EU in all business fields including in the

banking sector. The ongoing Globalisation has further intensified the competition. Technical

developments coupled with the process of Globalisation, have made it possible for banks to offer

their services in far-flung areas without investing money to build branches and hire additional

staff. This opportunity, of course, is a two-way street: On the one hand, a bank gets access to

new markets.

On the other hand it is faced with increased competition on its home turf. To master this

combination of opportunities and challenges banks need – apart from business consolidation and

cooperation – organic growth. It is therefore necessary to retain the existing customer base while

simultaneously acquiring new, economically prosperous customers. Seen in conjunction with the

price-sensitivity of customers and the resultant low relevance of the brand-name banks are

compelled to introduce innovative services that potentially attract prospective customers while

retaining others. Even though the brand-name remains a critical factor on account of the need for

trust in banking business, the Globalisation and the technological developments, however, have

reduced entry barriers so that the number of available reputed brands has increased significantly;

thereby intensifying the competition.

Adapting to Requirements of Core Target Groups:

Banks, today, are increasingly confronted with technology-savvy customers who are often on the

move. As Wolfgang Klein, Private Customers Director at Postbank, a leading German bank,

puts it: “Today’s customers want to organise banking transactions while on the move,

irrespective of opening hours”.Banks are responding to this development by introducing mobile

services. Core target groups of Mobile Banking are often divided in three categories:

a) The Youngsters: the segment of 14-18 years old youth has acquired an important role in the

growth of mobile telecommunications and related services. This group is technology-savvy and

willing to experiment with innovative products and services. The

youngsters, often on the move, demand ubiquitous, anytime service. Though the youngsters as a

group are hardly relevant for banks from a financial perspective, they represent the prospective

clientele of tomorrow and need to be cultivated in the middle to long-term marketing strategy of

the banks.

b) The Young Adults: Also this segment is thought to be technology- and innovation friendly.

Though this group too is financially not very strong, many members of this

group are known to be involved in stock market activities. Further, this group can be expected to

enter in short to medium-run a professional carrier so that it needs to be cultivated in order to

retain customers of this age-group even after they enter professional lives.

c) The Business People: this group of customers, generally in the age group of 26-50 years, is

thought to be the most important one for Mobile Banking. Members of this group are generally

well educated and economically well-off. They need to be professionally often on the move and

carry mobile devices to ensure accessibility. For this reason they are ideal candidates to use

services offered via mobile devices. From the banks’ perspective this group is particularly

attractive on account of its relative economic prosperity and the need for financial services, e.g.

home loans for young families. In order to fulfil the requirements of these customer groups banks

tend to look at Mobile Banking as a promising option. However, these services also have their

own utility for the banks.

Mobile Banking as Distribution Channel

Mobile Banking enhances the number of existing channels of distribution that a bank employs to

offer its services. The efficiency of a distribution channel can be measured by its fulfilment of

three major objectives, which are closely related to each other.

Increasing Sales Volume

One of the primary tasks of a distribution channel is to increase the volume of demand for

products at profitable prices .This objective is arrived by increasing operational efficiency so that

those losses are minimized that are caused by delays in catering to customer orders. Further, a

favourable reputation of the firm’s logistical capacities may help generate additional orders.

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.

1. IVR (Interactive Voice Response)

2. SMS (Short Messaging Service)

3. WAP (Wireless Access Protocol)

4. Standalone Mobile Application Clients

1.IVR (Interactive Voice Response)

IVR 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

a 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.

Asterisk, due to its open source nature has caught on in a big way and is being sold as an PBX

solutions by quite a few companies commercially. However there has been considerable noise on

multiple Asterisk related forums over the stability of Asterisk based systems. Companies

planning to use Asterisk for their IVR solutions should certainly do a rigorous evaluation of its

capabilities before committing their long term future on it.

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 prespecified number. The bank responds with a reply SMS containing the

specific information.

For example, customers of the HDFC Bank in India can get their account balance details by

sending the keyword ‘HDFCBAL' and receive their balance information again by SMS. Most of

the services rolled out by major banks using SMS have been limited to the Enquiry based ones.

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)'.

One of the major reasons that transaction based services have not taken of on SMS is because of

concerns about security and because SMS doesn't enable the banks to deliver a custom user

interface to make it convenient for customers to access more complex services such as

transactions.

The main advantage of deploying mobile applications over SMS is that almost all mobile

phones, including the low end, cheaper one's, which are most popular in countries like India and

China are SMS enabled. An SMS based service is hosted on a SMS gateway that further

connects to the Mobile service providers SMS Centre. There are a couple of hosted IP based

SMS gateways available in the market and also some open source

ones like Kannel .

3. WAP (Wireless Access Protocol)

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 a 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.STANALONE 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 channelof

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

the 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 charges

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

downloads and installs the wireless Ibanco application on their J2ME pone. The J2ME client

connects to the wireless I-banco server through the service providers GSM network to enable

users to access information about their accounts and perform transactions. One of the other big

advantages of using a mobile application client is that it can implement a very secure channel

with end-to-end encryption.

However countries like India face a serious obstacle in the proliferation of such clients as few

users have mobiles, which support J2ME or BREW. However, one of the biggest CDMA players

in the Indian telecom industry, Reliance Infocomm has about 7.01 million users all of which

have handsets, which support J2ME. Reliance has unveiled one of the most ambitious data

services deployment program in the country. On the other hand a country like South Korea with

its tech-savvy population has a widespread adoption of

the higher-end mobiles, which support application development.

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.

1. User experience of browsing the internet from a mobile device is familiar and offers a rich UI

experience.

2. Allows end user to access corporate association.

3. Secure connection can be established on most of the mobile browsers.

DISADVANTAGES OF MOBILE BANKING

· Many non-standards variables including handsets,browsers and operating system.

· Inconsistent user experience due to varying connection speed and different handset.

· User needs to have a data plan,which may be a barrier to adoption among price sensetive

demographics.

· No “offline” (out of the coverage) capability.

CHALLENGES FOR MOBILE BANKING

Key challenges in developing a sophisticated mobile banking application are :

Handset operability

There are a large number of different mobile phone devices and it is a big challenge for banks to

offer mobile banking solution on any type of device. Some of these devices support J2ME and

others support WAP browser or only SMS.

Initial interoperability issues however have been localized, with countries like India using portals

like R-World to enable the limitations of low end java based phones, while focus on areas such

as South Africa have defaulted to the USSD as a basis of communication achievable with any

phone.

The desire for interoperability is largely dependent on the banks themselves, where installed

applications(Java based or native) provide better security, are easier to use and allow

development of more complex capabilities similar to those of internet banking while SMS can

provide the basics but becomes difficult to operate with more complex transactions.

There is a myth that there is a challenge of interoperability between mobile banking applications

due to perceived lack of common technology standards for mobile banking. In practice it is too

early in the service lifecycle for interoperability to be addressed within an individual country, as

very few countries have more than one mobile banking service provider. In practice, banking

interfaces are well defined and money movements between banks follow the IS0-8583 standard.

As mobile banking matures, money movements between service providers will naturally adopt

the same standards as in the banking world.

Security

Security of financial transactions, being executed from some remote location and transmission of

financial information over the air, are the most complicated challenges that need to be addressed

jointly by mobile application developers, wireless network service providers and the banks' IT

departments. The following aspects need to be addressed to offer a secure infrastructure for

financial transaction over wireless network :

1. Physical part of the hand-held device. If the bank is offering smart-card based security, the

physical security of the device is more important.

2. Security of any thick-client application running on the device. In case the device is stolen, the

hacker should require at least an ID/Password to access the application.

3. Authentication of the device with service provider before initiating a transaction. This would

ensure that unauthorized devices are not connected to perform financial transactions.

4. User ID / Password authentication of bank’s customer.

5. Encryption of the data being transmitted over the air.

6. Encryption of the data that will be stored in device for later / off-line analysis by the

customer.

Scalability & Reliability

Another challenge for the CIOs and CTOs of the banks is to scale-up the mobile banking

infrastructure to handle exponential growth of the customer base. With mobile banking, the

customer may be sitting in any part of the world (true anytime, anywhere banking) and hence

banks need to ensure that the systems are up and running in a true 24 x 7 fashion. As customers

will find mobile banking more and more useful, their expectations from the solution will

increase. Banks unable to meet the performance and reliability expectations may lose customer

confidence. There are systems such as Mobile Transaction Platform which allow quick and

secure mobile enabling of various banking services. Recently in India there has been a

phenomenal growth in the use of Mobile Banking applications, with leading banks adopting

Mobile Transaction Platform and the Central Bank publishing guidelines for mobile banking

operations.

Application distribution

Due to the nature of the connectivity between bank and its customers, it would be impractical to

expect customers to regularly visit banks or connect to a web site for regular upgrade of their

mobile banking application. It will be expected that the mobile application itself check the

upgrades and updates and download necessary patches (so called "Over The Air" updates).

However, there could be many issues to implement this approach such as upgrade /

synchronization of other dependent components.

Personalization

It would be expected from the mobile application to support personalization such as :

1. Preferred Language

2. Date / Time format

3. Amount format

4. Default transactions

5. Standard Beneficiary list

6. Alerts

Features of Mobile Commerce

Mobile Commerce is characterised by some unique features that equip it with certain advantages

against conventional forms of commercial transactions, including Electronic Commerce:

i) Ubiquity: Ubiquity means that the user can avail of services and carry out transactions

largely independent of his current geographic location (the “anywhere” feature).

ii) Immediacy: Closely related to the feature of ubiquity is the possibility of real-time availment

of services (the “anytime” feature). This feature is particularly attractive for services that are

time-critical and demand a fast reaction, e.g. stock market information.

iii) Localisation: Positioning technologies, such as the Global Positioning System (GPS), allow

companies to offer goods and services to the user specific to his current location. LBS can thus

cater to consumers’ needs and wishes for localised content and services.

iv) Instant connectivity: Ever since the introduction of the General Packet Radio Service

(GPRS) mobile devices are constantly “online”, i.e. in touch with the network (the “always-on”

feature). This feature brings convenience to the user, as time consuming dialup or boot processes

are not necessary.

v) Pro-active functionality: Mobile Commerce opens, by the virtue of its ability to be

immediate, local and personal, new avenues for business. The user may choose the products, and

services, which he wants to be kept informed about. The Short Message Service (SMS) can be

used to send brief text messages to customers ensuring that the “right” (relevant) information is

provided to the user at the “right” place, at the “right” time.

vi) Simple authentication procedure: Mobile devices function with an electronic chip called

Subscriber Identity Module (SIM). The SIM is registered with the network operator and the

owner is thus unambiguously identifiable. The clear identification of the user in combination

with an individual Personal Identification Number (PIN) makes any further time-consuming,

complicated and potentially inefficient authentication process redundant.

Employment of Mobile Technologies in the Banking Sector

A cornerstone of Mobile Commerce is built by Mobile Banking, the availment of bank-related

financial services via mobile devices. It comprises of services in the field of accounting,

brokerage and financial information. Mobile Banking is increasingly being employed by many

banks around the world to generate additional revenues, reduce costs or to increase customer

satisfaction, often with very promising results. For instance, the utilisation of transaction-based

MFS of Finland-based Nordea bank grew by 30% in 2004.The number of France’s Société

Générale customers using mobile services crossed the mark of one million in year 2004,

registering an impressive growth of nearly 200% vis-à-vis 2003. These facts point toward a

positive shift in the customer perception of Mobile Banking. On the other hand, technological

developments like Universal Mobile Telecommunications System (UMTS) have provided a new

platform for realistic mobile applications.

Unlike in the past, when banks offering mobile services suffered a severe setback due to lack of

customer interest and unripe technologies, the time seems to be now ripe for (re-)launching

mobile services. Mobile Banking is usually defined as carrying out banking business with the

help of mobile devices such as mobile phones or PDAs [8; 11]. The offered services may include

transaction facilities as well as other related services that cater primarily to informational needs

revolving around financial activities. Considering these factors we can define Mobile Banking as

following:

“Mobile Banking refers to provision and availment of bank-related financial services with the

help of mobile telecommunication devices. The scope of offered services may include facilities

to conduct bank and stock market transactions, to administer accounts and to access customized

information.”

Mobile Banking, as defined above, includes a wide range of services. These services may be

categorized as following:

Mobile Accounting

Mobile Accounting is sometimes characterized as transaction-based banking services that

revolve around a bank account and are availed using mobile devices .Not all Mobile Accounting

services are however necessarily transaction-based. A more precise definition of Mobile

Accounting would therefore characterize it as “availment of account-specific banking services of

non-informational nature”. Mobile Accounting services may be divided in two categories to

differentiate between services that are essential to operate an account and services that are

essential to administer an account.

Mobile Brokerage

Brokerage, in the context of banking- and financial services, refers to intermediary services

related to the bourse, e.g. selling and purchasing of stocks. Mobile Brokerage can be thus defined

as transaction based, mobile financial services of non-informational nature that revolve around a

securities account. Mobile Brokerage, too, may be divided in two categories to differentiate

between services that are essential to operate a securities account and services that are essential

to administer that account.

Mobile Financial Information

Mobile Financial Information refers to non-transaction based banking- and financial services of

informational nature. Mobile Financial Information services include subsets from both banking

and financial services and are meant to provide the customer with anytime, anywhere access to

information .The information may either concern the bank and securities accounts of the

customer or it may be regarding market developments with relevance for that individual

customer. The information may be customized on the basis of preferences given by the customer

and sent with a frequency decided by him. The information should be provided, ideally, on both,

pull and push basis. Information services are an integral part of Mobile Accounting and Mobile

Brokerage but they may also be offered as a stand-alone, independent module, i.e. Mobile

Financial Information can be offered without offering Mobile Accounting or Mobile Brokerage

but vice versa is not feasible.

MOBILE BANKING IN THE WORLD

This part of the mobile commerce is very popular in countries where most of their population is

unbanked. Countries like Sudan, Ghana and South Africa received this new commerce very well.

In Latin America countries like Uruguay, Paraguay, Argentina, Brazil, Venezuela, Colombia,

Guatemala and recently Mexico started with a huge success.In Colombia was released with

Redeban.In Iran banks like Parsian, Tejarat, Mellat, Saderat, Sepah, edbi and bankmelli offer this

service. Guatemala have the support of Banco industrial.

Mexico released the mobile commerce with Omnilife,Bancomer and a private

company(MPower Ventures). Kenya's Safaricom (Part of the Vodafone Group) has had the very

popular M-Pesa Service - mainly used to transfer limited amounts of money, but has been

increasingly used to pay utility bills. Zain in 2009 launched their own mobile money transfer

business known as ZAP in Kenya and other African countries

CASE ANALYSIS

LG Telecom, South Korea

In 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 financial services to make the whole

process much faster and convenient. The icing on the cake came with the ability of these chip

enabled cell phones to be used simultaneously as cash cards. By October 2004 there were already

about 100,000 infrared readers adapted to take payment directly from mobile phone handsets in

Korea. Users can now use their cell phones to pay for everything, from restaurant bills, travel

tickets, merchandise and even haircuts.

Reliance Infocomm, India

When 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-air to their cell phones. These applications are then executed locally on

the mobiles. From mid-2004 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.

Malhotra, Pooja & Singh, B. (2010) investigates present status of Internet banking in India and

the extent of Internet banking services offered by Internet banks.  In addition, it seeks to examine

the factors affecting the extent of Internet banking services. The data for this study are based on a

survey of bank websites explored during July 2009. The sample consists of 82 banks operating

in India. Multiple regression technique is employed to explore the determinants of the extent of

Internet banking services. The results show that the private and foreign Internet banks have

performed well in offering a wider range and more advanced services of Internet banking in

comparison with public sector banks. Among the determinants affecting the extent of Internet

banking services, size of the bank, experience of the bank in offering Internet banking financing

pattern and ownership of the bank are found to be significant. The primary limitation of the study

is the scope and size of its sample as well as other variables (e.g. market, environmental,

regulatory etc) which may have an effect on the decision of the banks to offer a wide range of

Internet banking services. The purpose of the study is to help fill significant gaps in knowledge

about the Internet banking landscape in India. The findings are expected to be of great use to the

government, regulators, commercial banks, and other financial institutions, e.g. co-operative

banks planning to offer Internet banking bank customers and researchers. An understanding of

the factors affecting the extent of Internet banking services is essential both for economists

studying the determinants of growth and for the creators and producers of such technologies.

Moreover, this paper contributes to the empirical literature on diffusion of financial innovations,

particularly Internet banking in a developing country, i.e.  India.

Dr. Saroj K. Datta (2010) concluded that the factors which are affecting the acceptance of e-

banking services among adult customers and also indicates level of concern regarding security

and privacy issues in Indian context. Primary data was collected from 200 respondents, above the

age of 35, through a structured questionnaire. Statistical analysis, descriptive statistics was used

to explain demographic profile of respondents and also Factor and Regression analyses were

used to know trend of internet use and factors affecting e-banking services among adult customer

in India. The finding depicts many factors like security & privacy, trust, innovativeness,

familiarity, awareness level increase the acceptance of E Banking services among Indian

customers. The finding shows that in spite of their security and privacy concern, adult customers

are willing to adopt online banking if banks provide him necessary guidance. Based on the

results of current study, Bank’s managers would segment the market on the basis of age group

and take their opinion and will provide them necessary guidance regarding use of online

banking.

Polaris Software Lab (2010) had this study Polaris Software Lab Limited (POLS.BO),a leading

Financial Technology Company, launched Intellect(TM) PRIVACY based on state-of-the-art

technology and four patents filed by the Indian Institute of Technology Madras. IndusInd Bank

has become the first bank in India to implement Intellect(TM) PRIVACY, an online and internet

banking security card, for its internet banking customers. The technology will protect customers

and banks from practically all kinds of phishing attacks, viz. deceptive e-mail, key/screen logger,

brute force/dictionary attacks and Trojans, etc .Intellect PRIVACY uses multi factor ,dynamic

authentication technology providing for authorizing online banking transactions, in a completely

secure platform. Commenting on the innovation, Professor L S Ganesh, Coordinator of the

programmer, said, "At IIT Madras, the Department of Computer Science and Engineering and

the Department of Management Studies got particularly interested in designing an internet

security technology that is cost efficient and easy to use in a rapidly growing e-commerce

scenario, and transferring it commercially.

 Azouzi, D. (2009) this paper aims to check if the current and prompt technological revolution

altering the whole world has crucial impacts on the Tunisian banking sector. Particularly, this

study seeks some clues on which we can rely in order to understand the customers' behavior

regarding the adoption of electronic banking. To achieve this purpose, an empirical research is

carried out in Tunisia and it reveals that panoply of factors is affecting the customers-attitude

toward e-banking. For instance; age, gender and educational qualifications seem to be important

and they split up the group into electronic banking adopters and traditional banking defenders

and so, they have significant influence on the customers' adoption of e-banking. Furthermore,

this study shows that despite the presidential incentives and in spite of being fully aware of the e-

baking’s benefits, numerous respondents are still using the conventional banking. It is worthy to

mention that the fear of loss because of transactions errors or hackers plays a significant role in

alienating Tunisian customers from online banking.

Elizabeth Daniel (2009) concluded that the newest delivery channel to be offered by the retail

banks in many developed countries and there is wide agreement that this channel will have a

significant impact on the market. Aims to quantify the current provision of electronic services by

major retail banking organizations in the UK and the Republic of Ireland. Additional in- sight

into the banks' adoption of this new channel is gained by exploring two areas important in the

analysis of new offerings, that is: an organization’s approach to innovation; and their view of the

current and future markets. By use of a mailed questionnaire, it was found that 25 per cent of the

banks in the UK and the Republic of Ireland which responded to this survey are already offering

online transactional services to consumers in their homes. The largest group of respondents (50

per cent) is those that are currently testing or developing such ser- vices, while just 25 per cent of

the respondents were in organizations not providing or developing such services. It is also found

that the organization’s vision of the future, their prediction of customer acceptance, which tends

to be very low, and their organizational culture of innovation are the most important of the

suggested factors in their adoption of electronic delivery.

Hill (2009) conducted a study concerned with identifying the characteristics of online banking

users. She mentioned that it is commonly assumed that demographics do influence the

acceptance of electronic self-service tools, such as online banking. The result of the study was

that people who use such services are young, trendy and high earning. They actively seek out

online banking tools, and they want to conduct all transactions through the same channel.

B. Dizon, J.A. (2009) have founded that "E- Baking’s appeal is primarily its convenience.

Clients now a day’s want instant results; they don't want to wait anymore," said Francisco M.

Caparros, Jr., senior vice-president of Asia United Bank and president of Banc Net. It's also

turned out to be a more efficient way to process transactions, as e-banking does away with most

of the paperwork that clients have to accomplish. "A lot of people don't like filling forms," Mr.

Caparros added. "Online banking, in particular, relies on usernames and passwords which need

to be protected," said Ferdinand G. La Chica, first vice- president and marketing group head for

Sterling Bank of Asia. These anti- theft barriers are at times supplemented by transaction

passwords and "tokens", often a key chain-like device that is issued to the client and generates

random, one-time passwords to enable him to log into his account online. Last year, the Rural

Bank Association of the Philippines announced that its members are looking to appoint local

merchants like sari-sari stores as third party agents where consumers can open new accounts and

make large payments. Such informal outlets will enable banks to reach out to small-income

businesses and individuals, particularly those in the agrarian sector, most of who are based

outside the city center.

Uppal, R.K. & Chawla, R. (2009) highlights the customer perception regarding e-banking

services. A survey of 1,200 respondents was conducted in Ludhiana district, Punjab. The

respondents were equally divided among three bank groups namely, public sector, private sector

and foreign banks. The present study investigates the perceptions of the bank customers

regarding necessity of e-banking services, quality of e-banking services, bank frauds, future of e

banking, preference of bank customers regarding banks, comparative study of banking services

in various bank groups, preferences regarding use of e-channels and problems faced by e-bank

customers. The major finding of this study is that customers of all bank groups are interested in

e-banking services, but at the same time are facing problems like, inadequate knowledge, poor

network, lack of infrastructure, unsuitable location, misuse of ATM cards and difficulty to open

an account. Keeping in mind these problems faced by bank customers, this paper frames some

strategies like customer education, seminars/meetings, proper network and infrastructure

facilities, online shopping facilities, proper working and installation of ATM machines, etc., to

enhance e-banking services. Majority of professionals and business class customers as well as

highly educated and less educated customers also feel that e-banking has improved the quality of

customer services in banks.

Tero pikkarainin (2008) concluded that advances in electronic banking technology have created

novel ways of handling daily banking affairs especially via the online banking channel. The

acceptance of online banking services has been rapid in many parts of the world and in the

leading e banking countries the number of e banking contracts has exceeded 50 percent.

Investigates online banking acceptance in the light of traditional technology acceptance model

(TAM), which is leveraged into the online environment. On the basis of the focus group

interviewed with banking professionals, TAM literature and banking studies we develop a model

indicating online banking acceptance among private banking customers in Finland. The model

was tested with the survey sample of 268 respondents. The finding of the study indicates that

perceived usefulness and information on online banking on the web site were the main factors

influencing online banking acceptance.

Reeti, Sanjay, and Malhotra, A. (2008) examined about the Customers’ perspectives regarding

e-banking in an emerging economy. So that, the author determining various factors affecting

customer perception and attitude towards and satisfaction with e-banking is an essential part of a

bank's strategy formulation process in an emerging economy like India. To gain this

understanding in respect of Indian customers, the study was conducted on respondents taken

from the northern part of India. The major findings depict that customers are influenced in their

usage of e-banking services by the kind of account they hold, their age and profession, attach

highest degree of usefulness to balance enquiry service among e-banking services, consider

security &trust most important in affecting their satisfaction level and find slow transaction

speed the most frequently faced problem while using e-banking.

Hsun, K.S. (2008), this study considers the coherence of the financial service sector and adopts

different observational variables to identify innovation capital (training and R&D density) and

process capital (IT system sufficiency). The results show that human capital has a direct impact

on both innovation capital and process capital, which in turn affect customer capital; while

finally, customer capital affects business performance. In addition, there is a negative

relationship between process capital and customer capital in the financial service sector. It

suggests that in the financial service sector, customer satisfaction relies on a sufficient degree of

training and R&D density. Intemperate investment on the support of e-banking operation

systems may not be a good answer.

Malhotra, P. & Singh, B. (2007) stated that the larger banks, banks with younger age, private

ownership, and higher expenses for fixed assets, higher deposits and lower branch intensity

evidence a higher probability of adoption of this new technology. Banks with lower market share

also see the Internet banking technology as a means to increase the market share by attracting

more and more customers through this new channel of delivery. Further, the adoption of Internet

banking by other banks increases the probability that a decision to adopt will be made .An

understanding of the factors affecting this choice is essential both for economists studying the

determinants of growth and for the creators and producers of such technologies. From this

perspective, understanding the factors determining the adoption of technology becomes highly

relevant from the policy point of view. Moreover, the studies on the adoption of financial

innovations are related to developed markets, e.g. US or European banking markets. Hence, this

paper contributes to the empirical literature on diffusion of financial innovations, particularly

Internet banking, in a developing country.

The objectives of study are:-

1) To analyze the current market potential for Mobile banking

2) To study the consumer satisfaction level for the mobile banking facility

3) To compare between mobile banking and counter banking.

4) To compare the viewpoint of different respondents depending on their occupation

about the mobile banking Facility.

 Research Methodology

A Marketing research design specific a procedure for  conducting and controlling the

research project. Every marketing research must explicitly state its plan about

collection and analysis of data. It is the conceptual framework within which the study is

conducted and deals with the procedures used in the study for the purpose of investigation.

Research Methodology in the context of the topic includes the partial study of the Bank

Account holders of Delhi city; it will also include various professionals

and businessmen who are having their mobile banking accounts.

 

Methods of Data collection:

The analysis tools would be of both types which include

1. Primary data.

a) Questionnaire. 

b) Personal Interview.

2. Secondary Data.

a) Newspaper & Magazines 

b) Internet & Journals.

Sample Area & Size:

The sample area of the study will be restricted to the Delhi city only and the sample size would be of  100

respondents.

66%

34%

Gender

MalesFemales

16%

34%29%

17%

4%

Age

18-2526-3536-4546-6060+

7%22%

42%

29%

Qualification

12thGraduatePost GraduateProfessional

INFERENCE:

About 66% of the respondents are males. This study found a predominance of males among

Internet users in DELHI. This indicates that the percentage of male Internet users is higher than

the female internet users the respondents are relatively young, i.e. 34% between 26 and 35 years

old. This is a consistent study, which found that most Internet users are youths (less than 18

years old: 16 %) and young adults. Respondents with post graduation were 42% followed by

22% of graduate respondents and 29% with professional degrees. In terms of profession, service

forms the largest group with 44% respondents while students (28%) form the next largest group.

59%

41%

Bank

PublicPrivate

65%

35%

M-Banking Users

YesNo

ANNEXURE 1

Questionnaire

I am a student of MBA, Delhi Institute of Advanced Studies, Indraprastha University I request

you to fill up a small questionnaire regarding the m-banking services provided by your bank. The

privacy will be maintained and the data will strictly be used for educational purposes only.

1. Name:

2. Gender:

Male Female

3. Age Group:

o 18-25

o 26-35

o 36-45

o 46-60

o 60+

4. Educational Qualification:

o 12th

o Graduate

o Post Graduate

o Professional

5. Occupation:

o Student

o Service

o Business man

o Retired Individual

o Others please specify:

6. Are you aware of M- Banking services?

o Yes

o No

7. Do you use M- Banking services?

o Yes

o No

8. If the above option is No specify the reason.

o Never heard of internet banking

o Concerned about security

o Not available to my bank

o Not have enough knowledge

o Other:

9. What is the name of the bank you have an internet banking account with?

o Public Sector Bank

o Private Sector Bank

10. What is the most important reason that you choose this particular bank?

o The brand name of the bank

o The excellent service offered by this bank

o Easy to access

o Other:

11. How long have you been using the M-Banking services?

o Less than a month

o 1 to 6 months

o 6 to 12 months

o More than a year

12. What is the frequency of usage of M-Banking?

o 5 to 6 times/week

o 2 to 3 times /week

o Once in a week

o Once in a month

o Occasionally