Mobile Banking Adoption and Benefits Towards Customers Service

Sunil Kumar Mishra & 2 Durga Prasad Sahoo

DRIEMS School of Professional Studies, DRIEMS, Tangi, Cuttack-754022

2
Modern engineering and Management Studies(MEMS), Balasore.
Email id-sunil_mishrap@yahoo.co.in , dpsahoo2@gmail.com

growth in most of the Asian economies like India. The

main purpose of Mobile Banking scores over Internet
Banking is that it enables Anywhere Anytime Banking
is Available'. Customers don't need access to a computer
terminal to access their bank accounts.

Abstract In order to achieve the goals of business, various

channel of communications to customers have to be
developed through technology. In the present day banking,
total automation of banking operation and is an
imperative for all banks to attract more customers,
provide efficient service and survive the competition
,apart from achieving the profit ,which is the main goals of
the business . Mobile banking is one of the alternatives
channels available to customer for quick and efficient
service at anytime and anywhere. Banks can also use
unable banking for increasing the efficiency of their staff
create a platform for better customer service and improve
relationship with their customers.

Financial Services are generally complex and need

a lot of trust for the consumer to use technology. Banks
have changed from paper-based banking solutions
provider to the latest of the technologies like onlinebanking, mobile-banking, etc. Customers across the
world, even technologically optimists, have refrained
from using technology aided solutions. There are many
reasons why technology has not been able to ride the
acceptance wave and cross the hurdle and become an
acceptable feature in banking. As todays banking has
redefined itself as customer centric, it becomes more
important that the customer is happy with the services
being provided. Unfortunately, the acceptance and
adoption rates are very low even in the case of educated
customers. The paper looks at various factors which
explain why consumers are not using mobile banking
and other technologies in banking. It would also try to
suggest why people are not currently using mobile
banking and try to suggest how to overcome this
problem and increase the acceptance levels.

Keywords: Mobile Banking, SMS Services, Application of

Mobile Phone.

I.

INTRODUCTION

Mobile banking is an application of mobile

computing which provides customers with the support
needed to be able to bank anywhere, anytime using a
mobile handheld device and a mobile service such as
Short Message Service (SMS). Mobile banking facility
removes the space and time limitations from banking
activities such as checking account balances or
transferring money from one account to another and
time saving when we go to bank and doing some
banking activities. Internet Banking helps 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. But the biggest
limitation of Internet banking is the requirement of a
Personal Computer with an Internet connection, but
definitely a big barrier if we consider most of the
developing countries of Asia like 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

Mobile Banking where banks provide these

following services:
Account Details: - define the information related to
accounts and following are the main services of
accounts.
a) Mini-statements and checking of account history
b) Alerts on account activity
c) Monitoring of term deposits

ISSN (Print) : 2319 2526, Volume-2, Issue-1, 2013

78

Special Issue of International Journal on Advanced Computer Theory and Engineering (IJACTE)

d) Access to loan statements/card statements.

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 Java2Micro Edition
(J2ME) and others support Wireless Application
Protocol (WAP) browser or only SMS. Barnes and
Corbitt (2003); Scornavacca and Barnes (2004) suggest
that recent innovations in telecommunications have
enabled the launch of new access methods for banking
services, one of these is mobile banking; whereby a
customer interacts with a bank via a mobile device such
as a mobile phone or personal digital assistant. Further
Vyas (2009) stated that Indian banks will target nononline banking users who may lack regular access to
desktop internet but are very likely to own a mobile
device, thus reporting great potential of Mobile banking
in India. This report of Vital Analytics suggested huge
potential of Mobile banking in India, as it found that
urban Indian customers checking account balance is the
most frequently cited reason for using Mobile banking.
40 million Urban Indians used their mobile phones to
check their bank account balances followed by viewing
last three transactions. Karjaluoto et al. (2002);
Rugimbana (1995) found that there is vast market
potential for mobile banking due to its always-on
functionality and the option to do banking virtually any
time and anywhere. Unnithan and Swatman (2001)
studied the drivers for change in the evolution of the
banking sector, and the move towards electronic
banking including mobile banking by focusing on two
economies, Australia & India and suggested strong
growth potential of new banking channel in India. Vyas
(2009); Rao et al. (2003) suggest banks will need to
expand their thinking about mobile banking beyond
online banking and should start to view mobility as its
own powerful and compelling delivery channel that can
help them deliver to end users new value such as
immediate access and additional control of personal
finances. Gupta (1999); Pegu (2000); Dasgupta (2002)
also affirms future of mobile banking in India in their
studies. Suoranta (2003) found that the average mobile
banking user is married, 25 to 34 years old, has
intermediate education and average income in clerical
work. She found that age and education have a major
influence on the use of the mobile phone in banking
services. The adoption theories assume that use of
Internet banking precedes the adoption of the mobile
phone in banking. However, Suoranta (2003) found that
some mobile banking customers omit Internet banking
adoption when adopting the mobile phone for banking
actions. Polatoglu et al. (2001); Al-Ashban and Burney
(2001); Karjaluoto et al. (2002); Black et al. (2002)
supports findings of Suoranat in their respective studies.
Mas (2008); Lyman et al. (2008) found that there are a
large number of different mobile phone devices and it is
a big challenge for banks to offer mobile banking

e) Mutual funds / equity statements

f) Insurance policy management
g) Pension plan management
Payments and Transfers: define the information about
the payments and transfers activities like bill payment
process.
a) Domestic and international fund transfers
b) Micro-payment handling
c) Mobile recharging
d) Commercial payment processing
e) Bill payment processing
Investments Details: define the information related to
investments services.
a)

Portfolio management services

b) Real-time stock quotes

c)

Personalized alerts and notifications on security

prices Support

d) Status of requests for credit, including mortgage

approval, and insurance coverage
e)

Check (cheque) book and card requests

f)

Exchange of data messages and email, including

complaint submission and tracking
II. CONTENT SERVICES

Content Services define the information related to

Location based and weather like updates.
a) Loyalty-related offers
b) Location-based services
c) General information such as weather updates, news

III. REVIEW OF THE LITERATURE

Clark (2008) suggested that as a Channel the mobile
phone can augment the number of channels available to
consumers, thereby giving consumers more low-cost
self-service options by which to access funds, banking
information and make payments. Mobile as a channel
delivers convenience, immediacy and choice to
consumers. But there are a large number of different

ISSN (Print) : 2319 2526, Volume-2, Issue-1, 2013

79

Special Issue of International Journal on Advanced Computer Theory and Engineering (IJACTE)

solution on any type of device. Some of these devices

support J2ME and others support WAP browser or only
SMS; presetting a serious challenge. Hayat (2009)
suggests that for a banking regulator it is important to
provide adequate protection for consumers, ensure
economic stability, provide interoperability of electronic
systems and guarantee security of transactions and AntiMoney
Laundering
and
Know-Your-Customer
principles must also be applied to mobile payments.
Comninos et al. (2008) suggest that unbanked will only
transact electronically (online/mobile banking) if there
is convenience and security. Sharma and Singh (2009)
found that Indian mobile banking users are specially
concern with security issues like financial frauds,
account misuse and user friendliness issue - difficulty in
remembering the different codes for different types of
transaction, application of software installation &
updation due to lack of standardization. Banzal (2010)
found that another major issue is the revenue sharing
agreements between mobile service providers, banks,
content providers, aggregators and other service
providers like utilities, travel agencies, hotel industry,
retailers etc.

Figure 1 Source : Survey by ACI Worldwide

Importance of Mobile Payments & Money

Movement -According to the survey, the countries with
highest levels of mobile payment adoption also display
highest importance on mobile payments and money
movement. Roughly two-thirds of Indian consumers
consider making payments and moving money using
their mobile phone in the next three years to be very
important to them in contrast only one in 10 French
and Canadian consumers think mobile payment is Very
Important.

IV. OBJECTIVES OF THE STUDY

1.

To find out the facilities are provided by Mobile

Banking Services.

2.

To study the advantages and disadvantages of

Mobile banking Services.

3.

To study the Mobile banking Services used by

Worldwide.

V. RESEARCH METHODOLOGY
This is a descriptive research paper based on
secondary data. Data have been find out by googling in
different websites, research papers and magazines.
VI. MOBILE BANKING IN THE WORLD WIDE:
Mobile Banking has really caught up in India
according to recently conducted survey by ACI
Worldwide, 76% of Indian mobile respondents used
their mobiles for banking in last 6 months. This
percentage is highest across the world.

Figure2 Source: Survey by ACI Worldwide

Replacing Traditional Payment Cards with Mobile

Payments-Over 8 out of 10 Indians responded that they
would prefer using a mobile phone to make a payments
instead of traditional payment cards. The lack of
importance of mobile payments and money movement
in a number of countries belies the interest that many
consumers across the globe have in using their mobile
phone to replace carrying payment cards. In Brazil, for
example, although 39% of consumers consider mobile

Comparatively, only 38% respondents from US,

and 31% from UK used mobile banking in last 6
months. China, came in after India with 70% users using
mobile banking followed by South Africa (61%). The
global average for Mobile Banking adoption rate stands
at 35%

ISSN (Print) : 2319 2526, Volume-2, Issue-1, 2013

80

Special Issue of International Journal on Advanced Computer Theory and Engineering (IJACTE)

payment and money movement to be very important,

75% would use their mobile phone to replace cards.

present day life that a person cant survive with out this
communication channel. Once upon a time, a mobile
phone was a luxury, but now it is necessity.

Even in France, where just 9% of French consumers

place a high importance on mobile payments and money
movement, 44% express interest in replacing their
payment cards. One surprising fact in all the above
findings is that western countries like US, UK, France,
Germany etc. are low on mobile banking and payments.
One of the reason I see is that they transact more from
Desktop PCs. Whereas in countries like India & China,
majority of consumers only have mobiles on which they
can carry out mobile banking / payments ( as they dont
own personal computers).

In every state the number of consumers using cell

phones is increased to unexpected levels. At least 90%
of these customers have bank accounts in various banks
which uses technology and avail themselves of mobile
banking services. Therefore, banks have chosen mobile
banking as one of the best methods for channel
migration of customers. Customer also pleased to have
these services.
VIII. FACILITIES AVAILABLE ON MOBILE

BANKING

Figure3 Source: Survey by ACI Worldwide

Balance Enquiry: The service provides all

customers, the available balance in his/ her
default/ operative account that are linked to the
customer identification number. The maximum
number of accounts one can access is five.

Cost Transactions: This type of transaction

provides the customer with the information
about last five debits/ credits made to the
account.

Cheque Book Request: Instead of going

personally to the bank, the customer can
request for a cheque book to be mailed to his or
her address as per the records of the bank. This
saves his/ her valuable time.

Bill Payment: for those companies which

register with the bank for this service, the
payment is made on request on mobile phone
banking.

Change of Primary Account: the customer

has the option to change the primary account to
another new account number for carrying out
transactions.

Help: Customers can know the transaction

codes for various types of transactions through
this option.

VII. MOBILE BANKING CONCEPT

Mobile Banking is a system of providing services to
a customer to carry out banking transactions on the
mobile phone through a cellular service-provider. Banks
have to provide facilities to their customers whenever
they are in need and wherever they are. We can rather
call this facility as Any where and any moment
banking, but it is restricted to only information about a
persons account and not the cash services.
Mobile banking operates through short messages.
Customers have to, therefore, configure Short Message
Service (SMS). They have to activate Mobile Messaging
Service (MMS) in the mobile phone.

Mobile phone bank-users will be alerted about

outward clearing cheque realizations, inward cheque
returns, alert on term deposits matured, on loan
installment due, submission of stock statements by the
borrowable client, standing instructions failed on
account of insufficient balance in the account, etc. Bank
initiates alert messages on minimum balance in the
account and also about the utility bills which are due for
payments. The services in mobile banking by each of
the cellular service providers are tailor-made and
customized for each bank that provides mobile banking
service to its customers.

Mobile banking is one of the important channels

through which the customers can be migrated from front
office operations to indirect channels, in order to save
their valuable time as also that of the executives
working in the bank. The time saved can be effectively
utilized for business development and cost reduction.
Cellular phones have gained so much prominence in the

ISSN (Print) : 2319 2526, Volume-2, Issue-1, 2013

81

Special Issue of International Journal on Advanced Computer Theory and Engineering (IJACTE)

There is only one valid definition of Business

Principals to create a customer. As far as the banks are
concerned, creation and retention of customers has
become crucial in present day banking. Retention of
customers can be achieved only by giving the customer
what he wants, whenever he needs it, wherever he may
be at the most competitive price, if possible free.
Viewed, thus provision of good customer service
through mobile banking service should be the principal
objective of the banks. It is an effective tool for channel
migration.

BY BANKS:
Top-up mobile talk time by refilling through
the ATM network.

Refill the prepaid mobile phone through the

ATM/SMS.

Have separate memorandum of undertaking

with other telecom companies also and sell this
product to earn commission.

It is a mobile service to have information, all

the 365 days, anytime, anywhere, about their
account.

Bankers can utilize the time saved by the

channel migration of customers to mobile
banking for expansion of business through
better marketing and sales activities.

Banks can take advantage of the profits by way

of commission for cellular companies by
selling prepaid talk time through the ATMs.

Banks providing mobile banking services can

have competitive advantage over those banks,
which are not providing this service.

Mobile banking enables banks to reduce cost of

courier, communication, paper works, etc.

In line with the global industries move in acquiring

the latest advanced technology to stay ahead of
competitors, banks throughout the world and India have
notably been moving in the same direction. Evidently,
Mobile banking is considered a new era in banking, in
which banks are spending considerable amount of
money to have it available to their customers and to cut
their operations costs. Unfortunately, evidences have
shown that a large number of customers do not use
Mobile banking for various reasons, despite its benefits.

10.1 To Customers

Customers can save their valuable time and

travelling cost in reaching the bank for their
financial transactions.

XII. CONCLUSION

X. ADVANTAGES OF MOBILE BANKING

Cheque book request can be made sitting at

their work place.

As the customer doesnt have direct access to the

bankers, the relationship may get affected. Effective
communication may not be possible in diverting the
customers to indirect channels through channel
migration. The customers feelings, complaints and the
feedback can not be accessed to directly. In this
direction, certain customers like senior citizens, High
Net Worth Individual (HNWI) customers may be
dissatisfied. Banker, therefore, should utilize the benefit
of technology and alternative channels of services
available to convince dissatisfied customers.

If all other banks also integrate this facility, it will

be boon to all the mobile phone banking customers to
avail themselves of the services without any
interruption. Banks should innovate such services to
make the product of mobile phone banking more and
more popular as a vehicle for channel migration and
focus attention on additional business.

Customers need not stand at the bank counter/

front offices for various enquiries about their
account.

XI. DISADVANTAGES OF MOBILE BANKING

It is highly potential income-generating products for

banks, since the banks get commission on the
transaction amount. The main advantage to the customer
is that he can refill his mobile for any amount he desires.
The process of refilling is automated and completed
online.

Plan funding their accounts the cheques issued

to various customers, by taking advantage of
balance enquiry/ account status.

10.2 To Bankers

IX. ANCILLARY SERVICE TO MOBILE BANKING

XIII. REFERENCES
[1]

Customers can pay their utility bills on time

and save their selves from paying penalties,
since alerts are received from the bank.

Ashban, A.A. & Burney, M.A. (2001), Customer

adoption of tele-banking technology: the case of Saudi
Arabia, International Journal of Bank Marketing, 19
(5), 191-200.

ISSN (Print) : 2319 2526, Volume-2, Issue-1, 2013

82

Special Issue of International Journal on Advanced Computer Theory and Engineering (IJACTE)
[2]

Banzal S. (2010), Mobile Banking & MCommerce

and
Related
Issues,
www.public.webfoundation.org/.../25.Mobile_banking_
M-commerce_15.03.pdf [accessed 10 Jul 2010]

[3]

Barnes, S.J., Corbitt, B. (2003), Mobile banking:

concept and potential, International Journal of Mobile
Communications, 1 (3), 273-288.

[4]

Black, N. J., Lockett, A., Ennew, C., Winklhofer, H. &

McKechnie, S. (2002), Modelling consumer choice of
distribution channels: an illustration from financial
services, International Journal of Bank Marketing, 20
(4), 161-173

[5]

[6]

[7]

Clark, Adam (2008). Mobile banking & Switching.

Retrieved
from
www.mcom.co.nz/assets/sm/163/.../CriticalSwitchingE
vents-WhitePaper.pdf Cheong, J.H., & Park, M.C.
(2005), Mobile internet acceptance in Korea, Internet
Research, 15(2), 125-140
Cheney, J. S. (2008), An Examination of Mobile
Banking and Mobile Payments: Building Adoption as
Experience
Goods,
www.philadelphiafed.org/pcc/papers/2008 [accessed
10 May 2010]
Mas, I. (2008), Realizing the Potential of Branchless
Banking: Challenges Ahead, In: Focus Note 50.
Consultancy Group to Assist the Poor (CGAP),
Washington, D.C Mattila, M. (2003), Factors
affecting the adoption of mobile banking services,
Journal of Internet Banking and Commerce, 8 (1) 101119

[8]

Mattila, M., Karjaluoto, H. & Pento, T. (2003),

Internet banking adoption among mature customers:
early majority of laggards? Journal of Services
Marketing, 17(5), 514-528.

[9]

Morawczynski, O. & Miscione, G. (2008). Exploring

Trust in Mobile Banking Transactions: The Case Of
MPesa in Kenya, Social Dimensions of Information
and Communication Technology Policy, pp 287-298

[10]

Owens, John & Anna, B. (2006), Catching the

Technology Wave: Mobile Phone Banking and TextA-Payment
in
the
Philippines,
http://www.chemonics.com/projects/content/GCash.pd
f [accessed 13 Jun 2010]

[11]

Polatoglu, V.N. & Ekin, S. (2001), An empirical

investigation of the Turkish consumers acceptance of
Internet banking services, International Journal of
Bank Marketing, 19 (4), 156-165

[12]

Pousttchi, Key & Schurig, Martin (2007), Assessment

of Todays Mobile Banking Applications from the
View of Customer Requirements, http://mpra.ub.unimuenchen.de/2913/ [accessed 10 Oct 2010] Sharma,
Prerna & Singh, Preeti (2009), Users perception
about mobile banking- with special reference to indore
& around, Review of Business & Technology
Research, Vol. 2, 1, pp. 1-5 Suoranta, M. (2003),
Adoption of mobile banking in Finland, Jyvskyl
Studies in Business and Economics,28.

[13]

Tiwari, Rajnish & Stephan, Buse (2007), The Mobile

Commerce Prospects: A Strategic Analysis of
Opportunities
in
the
Banking
Sector,http://www.globalinnovation.net/publications/PDF/HamburgUP_Tiwari_
Commerce.pdf [accessed 15 Aug 2010].

[14]

Unnithan, C.R. & Swatman, P. (2001), Online

banking Adaptation and Dot.Com Viability: A
Comparison of Australian and Indian Experiences in
the Banking Sector, School of Management
Information Systems, Deakin University, No. 14.

[15]

Cheney, J. S. (2008), An Examination of Mobile

Banking and Mobile Payments: Building Adoption as
Experience
Goods,
www.philadelphiafed.org/pcc/papers/2008 [accessed
10 May 2010]

[16]

Comninos, A., Esselaar, S., Ndiwalana, A. & Stork, C.

(2008), Towards evidence-based ICT policy and
regulation
mobile
banking
the
unbanked,
http://externo.casafrica.es/aeo/pdf/english/overview_pa
rt_2_09_aeo_09.pdf [accessed 30 March 2010].

[17]

Guriting, P. & Ndubisi, N.O. (2006), Borneo online

banking: Evaluating customer perceptions and
behavioural intention, Management Research News,
29(1/2), 6-15.

[18]

Hayat Muhammad Aslam (2009), Mobile payments:

Will Colombo keep its leadership in South Asia?,
http://sundaytimes.lk/090712/FinancialTimes/ft323.ht
ml [accessed 30 April 2010]

[19]

Howcroft, B., Hamilton, R. & Hewer, P. (2002),

Consumer attitude and the usage and adoption of
home-based banking in the United Kingdom,
International Journal of Bank Marketing, 20 (3), 111121

ISSN (Print) : 2319 2526, Volume-2, Issue-1, 2013

83