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OVERVIEW OF BANKING
Bank deals in money and credit. A bank is a factory manufacturer of credit. Bank get
money from the people on low rate of interest and gives loans to industrialists and
businessmen on high rate of interest. The difference between accepting deposits and
issuing loans is profit of the bank. The commercial banks work on commercial basis. The
aim of the bank is to earn profit. On the other hand the aim of central bank is not to earn
profit, but to regard the supreme interest of the country.
Finance is the blood of business. In modern time, it is not possible to start business
activities without the availability of adequate finance. Business enterprise requires funds
for the creation of fixed capital i.e. land, building, machinery and for the purchase of man
power, raw material, energy etc.
Business finance means anticipation acquisition and allocation of funds. Business finance
is defined as that business activity which is concerned with the acquisition and
conservation of capital funds in meeting the financial needs and overall objectives and
business enterprise.
The success and failure of business in private sector is linked with finance. Business
without finance is a just like a fish out of water. For proper working of assets, repair
renewal and maintenance is necessary. This work cannot be done without finance
Banking provides a safe place to save excess cash, known as deposits. It also supplies
liquidity to the economy by loaning this money out to help businesses grow and to allow
consumers to purchase homes, cars and consumer products.
Definition of Banking
A bank is a financial institution licensed by a government. Its primary activity is to
lend money. Many other financial activities were allowed over time. For example
banks are important players in financial market and offer financial services such as
investment funds.
Banking can also be defined as engaging in business of keeping money for saving
and checking accounts or for exchange or for issuing loans and credit.
Transaction business with banks; depositing or withdrawing funds or requesting
loans.
Banks a supply or stock held in reserve for future use (especially in
emergencies)
Meaning of Banking
An organization, usually a corporation, chartered by a state or federal government which
does most or all of the following:
Receive demand deposits and time deposits
Honor instruments drown on them and pay interest on them, discounts notes
Makes loans and invest in securities, collect checks, drafts and notes Certifies depositors
checks and issue drafts and cashier checks
Mobile Banking
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 customized information.
According to this model Mobile Banking can be said to consist of three inter-related
concepts:
Mobile Accounting
Mobile Brokerage
Mobile Financial Information Services
Most services in the categories designated Accounting and Brokerage are transactionbased. 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. Mobile phone
banking may also be used to help in business situations
MOBILE BANKING TRANSACTIONS
For 30 years, financial institutions have been on a quest to satisfy their customers need
for more convenience. First came the automated teller machine (ATM), which New
Yorks Chemical Bank introduced to the American public in 1969. It did little more than
dispense c at first, but the ATM evolved over time to become a true bank-away-frombank, providing a full suite of financial transactions.
Then came Internet banking in the mid-1990s, which enabled consumers to access their
financial accounts using a home computer with an Internet connection. Despite its
promise of ultimate convenience, online banking saw slow and tentative growth as banks
worked out technology issues and built consumer trust. Today, Internet banking has
reached a critical mass, with about 35 percent of U.S. households conducting bank
transactions online.
Yet banking at the living room computer still has some serious limitations. First, only 62
percent of American households have a computer, according to a 2003 .study conducted
by the U.S. Census Bureau. And only 28 percent of Americans have broadband Internet
access, which is essential to efficient, convenient service. The biggest issue, however, is
mobility. Even with a laptop its almost impossible to stay connected in virtually any
location on the planet.
Not so with mobile phones. They can be carried anywhere and are -- by an enormous
number of people. Worldwide there are more than 3.25 billion mobile phone subscribers,
with penetration topping 100 percent in Europe.
If mobile phones only delivered voice data, then their use as a vehicle to deliver banking
services would be limited. Most phones, however, also provide text-messaging
capabilities, and a growing number are Web-enabled. That makes the mobile phone an
ideal medium through which banks can deliver a wide variety of services.
Banks classify these services based on how information flows. A pull transaction is one in
which a mobile phone user actively requests a service or information from the bank. For
example, inquiring about an account balance is a pull transaction. So is transferring
funds, paying a bill or requesting a transaction history. Because banks must respond or
take some action based on the user request, pull transactions are considered two-way
exchanges.
A push transaction, on the other hand, is one in which the bank sends information based
on a set of rules. A minimum balance alert is a good example of a push transaction. The
customer defines the rule -- Tell me when my balance gets below Rs 100 -- and the
bank generates an automatic message any time that rule applies. As these examples
illustrate, push transactions are generally one way, from the bank to the customer.
You can also classify mobile banking based on the nature of the service.. The chart below
summarizes these various types of mobile banking services.
Push
Transaction
Inquiry
Pull
Funds transfer
Bill payment
Share trade
Check order
Account balance inquiry
Account statement inquiry
Check status inquiry
Transaction history
Clearly, push transactions are not as complex as their pull counterparts. Mobile banking
solutions also vary in their degree of complexity, and some only offer a fraction of the
services you would find in a bricks-and-mortar branch. In this respect, mobile banking
isnt always full service banking.
MOBILE BANKING SCENARIO
The growth of mobile banking technology is increasingly hard to ignore. Nearly 50
percent of all mobile users in the United States will be using mobile banking within four
years and that nearly 50 percent of iPhone and other Smartphone users already use
mobile financial services today.
With 2010 being the year in which mobile banking broke into the mainstream, 2011 will
be the year in which financial institutions will look to capitalize on the full potential of
the mobile channel -- moving from basic user functionality to full mobile finance; or,
Your bank in your pocket.
All be using mobile banking till 2010. 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 till 2010. Another study from 2010 by Berg Insight
forecasts that the number of mobile. banking users in the US will grow from 12 million in
2009 to 86 million in 2015. The same study also predicts that the European market will
grow from 7 million mobile banking users in 2009 to 115 million users in 2015.
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.
Mobile banking business models
A wide spectrum of Mobile/branchless banking models is evolving. However, no matter
what business model, if mobile banking is being used to attract low-income populations
in often rural locations, the business model will depend on banking agents, i.e., retail or
postal outlets that process financial transactions on behalf Telcos or banks. The banking
agent is an important part of the mobile banking business model since customer care,
service quality, and cash management will depend on them. Many Telcos will work
through their local airtime resellers. However, banks in Colombia, Brazil, Peru, and other
markets use pharmacies, bakeries, etc.
in mobile space, 42% of all mobile banking users bank with ICICI, followed by HDFC
(25.3%).
Mobile banking: Most popular services and income profile
Many believe that mobile users have just started to fully utilize data capabilities in their
mobile phones. Service providers are every day coming up with new services, providing
methods to make the solution more easy to use, implementing techniques to improve
security, launch of 3G is providing higher data transfer rate and invention of new phones
more frequently is driving mobile users towards subscribing to mobile banking services.
In India, where mobile subscribers far exceed fixed line subscribers because of better
mobile infrastructure in comparison to fixed line infrastructure has made mobile banking
much more appealing in India today. Various players involved in providing mobile
banking services (banks, financial institutions, service providers, operators etc) are
therefore expecting a potential growth in mobile banking industry in India.
Telenor Pakistan has also launched Mobile banking solution, in coordination with
Taameer Bank, under the label Easy Paisa. Telenor rolled out its Mobile banking
solution in Q4, 2009. It was a huge success and customers embraced the wide set of
services offered. Eko India Financial Services the is business correspondent of State Bank
of India (SBI) and ICICI Bank, Indias top two largest banks, and provides no-frills bank
accounts and deposit, withdrawal and remittance services to customers (nearly 80% of
whom are migrants or the unbanked section of the population) through mobile banking.,
and also offer micro-insurance and micro-finance facilities to its customers.
One way IVR is by deploying a PBX system that can host IVR dial plans.
Banks looking to go the low costs way should be considering evaluating asterisk, which
is an open source Linux PBX system
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 request for information by sending an
SMS containing a service command to pre-specified number. The bank responds with a
reply SMS containing the specific information.
For e.g. 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
However there have been few instances even transaction based services have been made
available to customer using SMS. For instances, customer of the centurion bank of
Punjab can make fund transfer by sending SMS TRN (A/C NO) (PIN NO)
(AMOUNT). One of other reason the transaction based services have not taken of on
SMS is that almost all mobile phones are SMS enabled.
An SMS based services is hosted on SMS gate way that further connects to the mobile
services providers SMS centre. There are a couple of the hosted IP based SMS gateways
available in the market and also some open source ones like kennel
Dhanlakshmi bank
Hdfc bank
Federal bank
ICICI bank
IDBI Bank
Indian bank
Karnataka bank
Lakshmivilas bank
Syndicate bank
Uco bank
Vijaya bank
Yes bank
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
clients 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 merchants account.
Strategy
Dual Strategy for Rural and Urban Segments
Indian mobile banking has two major segments: the urban segment and the rural segment.
Celent estimates that urban mobile banking subscribers will reach 65 million by 2012.
The rural mobile segment represents a huge opportunity to bank the unbanked
population, thereby adding a revenue stream.
In a new report, Mobile Banking in India; Dual Strategy for Rural and Urban
Segments, Celent explains the mobile banking ecosystem in India and looks at the trends
driving the growth in its urban and rural sub segments. The report looks at the prospects
of mobile banking from both a regulatory perspective and an industry perspective.
In Indias urban segment, mobile banking is an enabling fifth channel, and in the rural
segment, mobile banking is a primary mode of financial inclusion. In both segments, the
two fundamental factors affecting the growth of mobile banking are regulations and
technology. No transactional users will remain the majority in India because they will
continue to use online banking and other payment mechanisms. Government-to-person
(G2P) payments will be the major growth driver for rural mobile banking. Regulatory
changes are also a big driver. Celent believes that, by 2012, over 60 million rural users
will be beneficiaries of mobile banking through business correspondence.
While the urban banking market is dominated by information services, the payment
transactions segment has not picked up mainly due to regulatory limitations, says Rajesh
M R, an analyst with Ceient and coauthor of the report. However, recent relaxation of
payment norms by RBI has presented a huge opportunity for this segment.
Advantages
Huge subscriber base across India of approximately 400 Million: A Banks mobile
banking Sales & Marketing plan will certainly cover almost all of a banks customers
and it is certainly a large prospect base. Even a city or region-based Sales &
Marketing plan will cover a huge number of prospects. Today banks and other retail
industries are heavily using SMS for promos. Even your local insurance agent may be
using some form of bulk SMS service for new schemes or promos
Utility: Users are familiar with a cell phone and will probably adapt quickly to mobile
apps and mobile banking apps. Note that there are so many people in India using a
mobile and not the Internet (Mobile: 400 Million, Internet: 50 Million).
Rural Reach: Coming to last mile connectivity which is more difficult in rural areas
(maybe due to technological limitations like wire length of not more than 2.5 kms
from the Telephone exchange to a consumer) the Mobile channel may offer better
reach
Bringing costs down for other channels: If one can access bank services on the
mobile banking application, he or she would not call the Call Center or log on to
Internet Banking
Business Channel: This is a completely untapped business channel for banks that
have already launched Mobile Banking, probably due to a combination of reasons
including lack of real estate (or screen space) on the Mobile Banking screen, the
primary outlook of the bank of this being a Service Delivery Channel or user nonfamiliarity with mobile applications. There is also huge cross-sell leverage that may
be obtained by integrating Mobile Banking with Mobile Commerce
Customer Adoption Plan: There are vast challenges involved. Most banks dont
even have the Mobile numbers of all their customers. Do they get the customers to
adopt when they walk into a branch otherwise is there an alternate route? There is also
an RBI requirement here
Reputation Risk:
Reputation risk is the risk of getting significant negative public opinion, which
may result in a critical loss of funding or customer. Such risks arise from action
which causes a major loss of public confidence in the banks ability to perform
critical function or impair bank-customer relationship. It may due to banks own
action or due to third party action.
The main reason for this risks may be the system or product may not be working
to the expectation of the customers, significant security breach (both internal or
external attack), inadequate information to the customer about the product use and
problem resolution procedures, significant problems with communication
networks that impair customer access to their funds or account information
especially if there are no alternative means of account access]
Legal Risks:
Legal risks arise from violation of, or non confidence with laws, rules, regulations,
or prescribed practices, or when the legal rights and obligation of parties to
transaction are not well established.
A customer inadequately informed about his rights and obligations, may not take
proper precaution in using mobile banking products or services, leading to
disputed transaction, unwanted suits against the bank or other regulatory sanctions.
Strategic Risk:
For reducing such risks, banks need to conduct proper survey, consult experts from
various fields, establish achievable goals and monitor performance.
Also they need to analyze the availability and cost of additional resources,
provision of adequate supporting staff, proper training of staff and adequate
coverage.
Risk of unfair competition:
Mobile banking is going to it the competition among various banks. The open
nature of mobile may induce few banks to use unfair practices to take advantages
over rivals.
Thus, one can find that along with the benefits mobile banking carries various
risks for bank itself as well as banking system as whole.
Security Risk:
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.
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.
Authentication of the device with service provider before initiating a transaction.
This would ensure that unauthorized devices are not connected to perform
financial transactions.
User ID / Password authentication of banks customer.
Encryption of the data being transmitted over the air.
Encryption of the data that will be stored in device for later / off-line analysis by
the customer.
Other risk:
Focus: Insufficient attention is being given by a banks business and IT on the
potential of this channel
High GPRS based Internet cost for the User: The application should use
minimal bandwidth to provision for maximum savings to the end-user
Targeting the right customer for the right product: Should the bank target their
own customers or should it target other banks customers. This needs extensive
customer profiling of back end bank applications for targeted campaigns
Lack of mass adoption: There are large as well as niche product companies in
this space offering Mobile Banking Applications. However, the apps can be
completely developed and tested only under mass usage conditions and over time
Lack of support for all handsets: There are many handset models across 5-10
mobile manufacturers, there are also Mobile Operating System variants
Regulatory restrictions on limits on transactions: This is of course necessary
till security evolves
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.
One-time password (OTPs) is the latest tool used by financial and banking service
providers in the fight against cyber fraud. Instead of relying on traditional memorized
passwords, OTPs are requested by consumers each time they want to perform
transactions using the online or mobile banking interface. When the request is received
the password is sent to the consumers phone via SMS. The password is expired once it
has been used or once its scheduled life-cycle has expired.
Because of the concerns made explicit above, it is extremely important that SMS gateway
providers can provide a decent quality of service for banks and financial institutions in
regards to SMS services. Therefore, the provision of service level agreements (SLAs) is a
requirement for this industry; it is necessary to give the bank customer delivery
guarantees of all messages, as well as measurements on the speed of delivery, throughput,
etc. SLAs give the service parameters in which a messaging solution is guaranteed to
perform.
new and improved Zeus variety in 2011. There is a good chance that he will soon
emerge with even more powerful ways to steal, he says.
Concerted attacks launched against online banking sites will likely make stronger
authentication a necessity, says Eisen, founder of 41st Parameter. The amount and
velocity of fraud could force new and stronger authentication methods and more stringent
procedures, such as dual- signatures and dual authentications, he says.
4. Phishing
Sophistication in phishing, smishing and vishing attacks also is increasing, Fraudsters
now create very polished messaging that targets everything from bank accounts to
Amazon accounts, In fact, respondents to the recent Faces of Fraud survey say
phishing/vishing attacks rank No. 3 among fraud threats.
To fight these incidents, inroads in consumer educatipn have been made, but the social
engineering techniques that have made phishing a success are now trickling down to
land-line and mobile phones. Phishing will be used as a general purpose tool that
leverages a recognized brand, but doesnt try to attack them directly, Rivner says.
Nonetheless, the damage to the brands reputation (in the eyes of the victimized
consumers) could be costly.
5. ACH Fraud: Corporate Account Takeover
In 2010, ACH fraud resulting in corporate account takeovers saw a dramatic increase and
made for some of the years most compelling reading. We witnessed banks suing
customers and customers suing banks over the responsibility for fraud incidents and
losses.
In 2011, commercial banking attacks are expected to rise, experts say, especially as manin- middle or man-in-the-browser, also known as MitB, schemes increase.
MitB attacks targeting two-factor authentication intensified in 2010, requiring
commercial banks to deploy additional lines of defense, such as out-of-band
authentication, desktop hardening and anti-Trojan services. .With some gangs stealing
millions from just a few victims, expect more and more criminals to pile on the easy
money bandwagon, Rasmussen says. As the MitB attacks get easier, less sophisticated
criminals are expected to target consumer accounts, too, despite smaller returns.
6. Cloud Computing
Cloud computin2 is touted for its ability to curb fraud, but fraudsters are working
overtime to create new threats in what Rivner calls the Dark Cloud. He predicts
fraudsters will hone their ability to exploit new and yet-unknown cloud vulnerabilities.
Rivner says institutions can expect in 2011 to see cloud-targeted Trojans, like Oakbot that
focus on a geographic region and/or specific banking sectors.
But movement to the cloud is definitely on the horizon, as more financial institutions
gradually warm to non-localized content management. Jeff Reich director of the Institute
of Cyber Security at the University of Texas in San Antonio, says the biggest barrier to
cloud computing has been the fear of data security. Now that fear is diminishing, the use
of cloud computing by banks and credit unions is expected to take off. But, like any new
or emerging technology, the cloud will face challenges, Reich says.
Cloud computing, in particular, is thought to be failsafe, he says. People sometimes
think there is no hardware involved ... and, as a result, it will never fail. So its one thing
to keep in mind: Cloud computing is not limitless. Every cloud has its own boundaries.
7. Inside Attacks
Malicious attacks or hacks are often launched inside an organization by a disgruntled
employee. But the inside threat also may be posed by an outside person who uses false
credentials to pose as an insider to illegally gain access to internal servers and systems.
Kirk Nahra a privacy expert and attorney, says most compromises of internal data can be
traced back to an employee. Thats especially true when the information thats been
compromised involves the theft of an identity. But Nahra is quick to point out that not all
compromises are intentional and malicious. The problem: companies and financial
institutions have not properly limited access to databases and files that contain sensitive
information.
Go into your company and does a real thorough audit or a review, he says. Doing that
kind of a survey or audit, I think, can really do a very significant job of reducing -- not
eliminating, but reducing -- these problems, because it cuts down so many of the places
where information just simply doesnt need to be.
WikiLeaks serves as a prime example of how insider threats can pose significant security
risks. The controversy brewed when an Army private allegedly accessed and downloaded
classified information that he later sent to WikiLeaks. Though the private had some
security clearance, he did not necessarily have authorization to access and download the
classified files he leaked.
Aites McNelley says its often all too easy for employees to illegally grab sensitive
information. Its the little things that lead to most internal compromises, like walking
away from your desk and not locking your. screen, she says. A lot of that kind of thing
slips through the cracks. Internal fraud is still one of the biggest issues in financial
services, she says, especially since the embezzlement of funds and the compromise of
consumer financial information is so tempting.
As RSAs Rivner points out, the challenges posed by outsiders are just as alarming, since
many take aim at government and bank employees. Noting Operation Aurora as an
example, Rivner says insiders can unknowingly pose threats, especially when they are
targeted by sophisticated hackers. Some of those affected were from the financial sector,
which shows bank employees are a valid target for cybercriminals, he says. At times, I
see these hijacked resources communicating with the Trojan mother ship, while within
the corporate firewall.
8. First-Party Fraud
First-party fraud continues to pose security challenges. Also known as advances fraud,
out fraud, application fraud, friendly fraud and sleeper fraud, first-party crime
typically involves a customer applying for and accepting credit with no intention of
repayment. First-party fraud applicants can use synthetic identification or misrepresent
their real identities.
Jasbir, Anand, a senior solutions consultant and security expert at AC Worldwide, says
the British Bankers Association estimates between 10 percent and 15 percent of bad debt
losses may result from first-party fraud. Specialized criminal gangs now target financial
institutions with counterfeit identification and advanced knowledge of lending practices,
he says. Once an identity is established, the fraudster builds credit and applies for
multiple financial products.
9. Skimming
in 2010, card skimming of all types took off, including traditional ATM skimming and
new incidents at merchant point-of-sale systems and self-service gasoline pumps. Even
though skimming incidents are localized, they represent a growing problem. The advent
of ATM or flash attacks reveals growing sophistication and coordination among
counterfeit-card operations. Blitz or flash attacks involve the simultaneous withdrawal of
funds from multiple ATMs in different locations, sometimes scattered throughout the
world.
Avivah Litan, vice president and distinguished analyst at Gartner, says flash attacks will
pose increasing challenges, since they fly under the radar of most fraud-detection
systems. Banks can stop it if they can figure out the point of compromise, but many
have a hard time doing that with current fraud-detection solutions, she says.
The technology behind skimming is reaching new levels of sophistication, says Jeremy
King European regional director for the Payment Card Industry Security Standards
Always secure your phone with a password to prevent unauthorized access. It may
be a bit of a hassle, but if your phone is ever lost or stolen, youll be glad you took
this extra precaution.
Be sure to log out completely every time you finish a Mobile Web Banking
session. This will prevent someone from having easy access to your information if
they get hold of your phone. Also, dont save any financial or personal information
on your phone, including Pins and Online Banking login information. If you lose
your phone, not only have you lost that information, but it could fall into the hands
of someone with bad intentions.
Some web browsers have an auto-fill function that remember your username
and password, and pre-fill these fields for you the next time you log in. If you are
prompted, tell your phone NOT to remember or auto-fill this information.
Beware of third-party applications (apps) for your phone. There are some
programs that you can download that claim to organize your various online
banking accounts or other passwords. Many of these are basically phishing scams
designed to steal your information and send it to fraudsters. Only access your
accounts through our official website www.smcu.com or the mobile site
m.smcu.com. Seattle Metropolitan Credit Union does not currently have or
endorse any downloadable application.
If you do lose your phone and you are worried about your Online Banking
information being compromised, log into your account from another computer and
reset your password right away. If you cant get to a computer, call our Contact
Center at 206-3 98- 5500 or 800-334-2489.
If you use SMCU Mobile Text Banking, know that we will never send you an
unsolicited message or ask you for a password or personal information via text. If
you get a message requesting such information, do not respond.
While SMCU will never send personal or account identifying information via text, being
in the habit of periodically deleting your archived texts will help ensure there is never
information on your phone that might jeopardize your accounts security.
7. Tata Teleservices
Tata Teleservices spearheads the Tata Groups presence in the telecom sector. It has
posted revenue of Rs 6,900 crore (Rs 69 billion). Established in 1996, Tata Teleservices,
one of the 96 companies of Tata Group, has its network in 20 circles. It is the first
company to launch CDMA mobile services in India.
8. Aircel
Aircel recorded the highest growth of 37.2 per cent among operators in 2009-10. The
company posted revenue of Rs 4,700 crore (Rs47 billion) to move to the number eight
slot.
9. MTNL
Mahanagar Telephone Nigam Limited (MTNL)s revenue dropped nearly by a fifth
highest among the top 10 players -- to Rs 3,650 crore (Rs 36.5 billion). The company has
achieved a customer base of 8.06 million in the two metro cities of Delhi and Mumbai.
The government currently holds 56.25 per cent stake in the company.
10. TTML
The third Tata group company this arena, Tata Teleservices Maharashtra Limited (TTML)
is ranked number 10, among the top ten telecom players in India, with revenues of Rs
2,300 crore (23 billion. This helped the groups earning go past the Rs 20,000 crore (Rs
200 billion) mark.
I think the heartening factor here is that there is over 30% rise in users who log on to
internet to view multimedia content (From 32% in 2008 to 45% in 2009), which
indirectly also means that Internet speeds are getting better in India:)
MOBILE PENETRATION
India adds 19.90 million mobile users
Total Telephone subscriber base reaches 581.81 Million
Wireless subscription reaches 545.05 Million
Wire line subscription declines to 36.76
Wire line subscription declines by 0.31 Million
Overall Tele-density reaches 49.50
Broadband subscription is 8.03 million
The number of telephone subscribers in India increased to 581.81 Million at the end of
January- 2010 from 562.21 Million in December-09, thereby registering a growth rate of
3.49%. With this, the overall Tele-density in India reaches 49.50.
Wireless Segment (GSM, CDMA & FWP)
Wireless subscriber base increased from 525.15 Million in December-09 to 545.05
Million at the end of January-2010 at a monthly growth rate of 3.79%. Wireless Teledensity stands at 46.31.
Wireless Service: Service Provider wise net additions during the month
Bharti; 14%
CHAPTER-2
OBJECTIVE OF THE STUDY
To understand the concept of mobile banking
To know the various trends in mobile banking in India
To know the customer satisfaction level from Mobile Banking Services.
CHAPTER-3
RESEARCH METHODOLOGY
Research methodology is the way to systematically solve the research problem. When we
talk about research methodology we not only talk about research methods but also talk
about the logic behind the method we use in the context of our research that why our
research results are capable of being evaluated either by the researcher himself or by
others.
The purpose of this section is to describe the methodology carried out complete the work.
The methodology plays a dominant role in any research work. The effectiveness of any
research work depends upon the correctness and effectiveness of the research
methodology.
Research Design:
A research design is an arrangement of conditions for collections and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in
procedure, it constitutes the blueprint for collection, measurement and analysis of data.
The research design for the research is exploratory and descriptive.
Data collection:
For our research study the data has been collected by both the primary and secondary
means.
(a)
Primary data I have adopted the structured questionnaires, which were filled
by the 100 respondents.
(b)
Secondary data the data has been collected through various magazines,
journals and websites.
Sampling Design:
A sample design is a definite plan for obtaining a sample from a given population. It
refers to the technique or procedure the researcher would adopt in selecting items for the
sample. The sample design used in this project is:
(a) Non-Probability sampling
Convenient sampling
Judgmental sampling
Sampling Size:
Sample size for the research report is 100 respondents of Ludhiana city.
CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
Q.1
Particulars
Axis Bank
ICICI Bank
HSBC Bank
HDFC Bank
State Bank of India
Any other bank
No. of Respondents
10
32
5
16
37
0
%age
10%
32%
5%
16%
37%
0%
10%
ICICI Bank
HSBC Bank
37%
HDFC Bank
32%
16%
5%
INTERPRETATION:
It was witness that today public sector bank state bank in India ha largest customer base but the
private bank are also catching up and after state bank in India, ICICI has highest customer base.
And on the other side multinational banks are also making their presence noticeable in the Indian
scenario.
Q.2
No. of Respondents
%age
Never
1 to 4 times
5 to 8 times
9 to 12 times
Over 12 times
9
45
16
20
10
9%
45%
16%
20%
10%
No. of Times
10%
9%
Never
1 to 4 times
20%
5 to 8 times
45%
16%
9 to 12 times
Over 12 times
Interpretation:
As per survey most of the customer that is 45 customers visits their branch 1-4 times in a month
and we can see there is a segment of customers that is 9 customers who are busy enough that
they do not get time to visit their bank even once in a month.
Q.3
Daily
Weekly
Monthly
No. of Respondents
10
10
20
%age
10%
10%
20%
Depends
60
60%
Daily
Weekly
60%
20%
Monthly
Depends
Interpretation:
Maximum people that 60% people use the services depends on the factors and there are 10% of
the people who use mobile banking on daily and more of the category consists of businessman
who use mobile banking for their daily business transaction.
Q.4
Yes
No
No. of Respondents
80
20
%age
80%
20%
17%
Yes
No
83%
Interpretation:
It is very interesting to see that most of the respondents are happy with the services their
respective bank is providing, the rest of the respondents felt there is scope of improvement.
Q.5
Ranking
No. of Respondents
%age
Convenience
40
40%
Safety
10
10%
Transparency
35
35%
Quick transaction
15
15%
Ranking
20%
Convenience
40%
Safety
Transparency
Quick transaction
30%
10%
Interpretation:
Most of the people prefer mobile banking because of convenience 2 nd preference is given to
transparency provided by mobile banking 3rd preference to time saving and safety was given least
preference because anywhere still customer feels that mobile banking is unsafe as compare to
traditional banking.
Q.6
Do you feel safe in disclosing your credit card and purchase information over
the mobile when this information is encrypted?
No. of Respondents
35
15
15
25
10
Strongly agree
Agree
Neutral
Disagree
Strongly disagree
%age
35%
15%
15%
25%
10%
Strongly agree
Agree
Neutral
Disagree
15%
15%
Strongly disagree
Interpretation:
Out of the respondents who were using mobile banking services 35% of the respondents were
strongly agreed that they feel safe in disclosing their credit card and purchase information over
the mobile when this information is encrypted where as 15% respondents were neutral and 10%
strongly disagree on it.
Q.7
What are the main transactions you would prefer to do through mobile
banking?
No. of Respondents
15
25
15
25
20
Money transfer
Checking your current balance
Mobile Cheque
Pay bill
Stop payment
%age
15%
25%
15%
25%
20%
Preferences of transactions
Money transfer
20%
15%
25%
Mobile Cheque
Pay bill
15%
Stop payment
Interpretation:
It is interesting to see that a respondent would like to do all the transaction which one does on
personal visit to a bank. Thus, mobile banking has promising future ahead.
Q.8 Are you aware about possibility of fraud?
Particulars
Yes
No
No. of Respondents
30
70
%age
30%
70%
Yes
70%
No
Interpretation:
Its party tragic but most of the respondents are unaware of the techniques which can be taken up
for any type of fraud and they are not aware of the measures that can be taken to avoid those
frauds.
Q.9
Does Bank educates you about the measure which you can take to secure your
mobile banking transaction?
Particulars
No. of Respondents
45
55
Yes
No
%age
45%
55%
45%
55%
Yes
No
Interpretation:
Some of the respondents that are 45 respondents were not given any sort of education regarding
what are the various measures available to secure their mobile banking transaction but 55 of the
respondent were taught about measures by their respective banks.
Q 10 With Which factor you are uncomfortable with the mobile banking transaction you
do?
Particulars
No. of Respondents
% age
Security issue
42
42%
Availability
19
19%
11
11%
Its techniques
28
28%
28%
42%
11%
19%
Security issue
Availability
About the ability bank to
maintain confidentiality
Its techniques
Interpretation:
Above table revealed the fact that 42 % of the respondents are uncomfortable with the mobile
banking services because of Security issues after which they are uncomfortable with its
techniques used for it besides some other factor also with which respondent are unhappy.
Q.11
Particulars
Time-saving
Confidentiality
Clarity of transaction
No. of Respondents
20
25
55
%age
20%
25%
55%
20%
Time-saving
Confidentiality
55%
25%
Interpretation:
Clarity of transaction
As 55% of the respondents are in favor of Clarity of transaction it can be concluded Clarity of
transaction is very important aspect of mobile banking besides this confidentiality is also the
reason why respondent want to use mobile banking.
CHAPTER-5
FINDINGS
AN old Chinese saying goes: If you dont know where you are going - you will never get
there.
Public sector bank state bank of India has the largest customer base but the private
banks are also catching up and after state bank of India ICICI bank has highest
customer base.
Most of the customers visits their banks 1-4 times in a month.
ATM transaction costs at 45 paise, mobile banking at 35 paise, debit card at 20
paise and internet banking at paise per transaction so in this internet banking has
edge over mobile banking
Banks are very much working on to remove the hacking problems and other flaws
in the way of mobile banking
Compared to foreign countries Indian banks offering mobile banking services still
have long way to go of customer who dont prefer mobile but prefer traditional
banking only.
10% customer use mobile banking services weekly, 20% uses it monthly and there
is a segment of 10% people who uses mobile banking services daily basis and this
segment consists of more of businessmen who uses it for their business transaction
80% of the customers are satisfied with the mobile banking services but 20% still
think that there is a scope for improvement.
Most of the people prefer mobile banking because of clarity of transaction 2nd
preference given to confidentiality provided by banks in mobile banking and
3rd preference to time saving.
35% respondent were strongly agreed that they feel safe in disclosing their credit
card and purchase information over the mobile when this information is encrypted
whereas 15% respondent were neutrals and 25% disagree on it.
Respondent would like to do all the transaction which one does personally on a
visit to the banks but most of the people use it to enquiry there balance in their
account.
70% of the respondents are unaware of the techniques which can be taken up for
any type of fraud and they are not aware of the measures that can be taken to avoid
those frauds whereas 30% respondents were aware.
55% respondents were not given any sort of education regarding what are the
various measures available to secure their banking transactions but 45% of the
respondents were taught about these measures by their respective banks.
SUGGESTIONS
The banks should take up the responsibility of educating the customers and all the
benefits of mobile banking.
There is need felt for the banks to promote mobile banking services and proper
promotional activities are not taking place.
Banks need to appeal the customers who may not be technologically sophisticated,
and should not require an engineering degree to get started or use this service.
Banks need do tie ups with mobile service provider do to make this service more
popular.
Banks should try put their security standard up to mark so that they cannot be
easily hacked.
Mobile service provider companies also should take mobile banking as more
serious aspect than now in future.
CHAPTER-7
LIMITATINS OF THE STUDY
Sincere efforts have been made to collect authentic and reliable information from
respondents however the report is subject to following limitations:
1.
The study was limited to Ludhiana city only. Wider coverage has made the study
more reliable and representative.
2.
3.
4.
Due to time and costs constraints, study could not be carried out on large scale.
CHAPTER-8
CONCLUSION
The cutthroat competition and the fear of losing customer are compelling the banks to
formulate mobile banking strategies. Expansion of the market is the need of the hour. To
expand market awareness has to be created amongst the user that mobile banking is safe
and secure to use. The scope is large first today more than 200 million Indians use
mobile phones as compared to 20 millions who have access to computer and the
population of mobile phone user is expected to grow at 25-30 percent. Second, Indian
demographic profile-mare than half the population is under 35 years old which are more
receptive to new age technologies and application. Mobile banking also helps banks
reach out to unbanked areas. It is fairly certain that given the market and potential mobile
banking will go a long way in the Indian banking sector.
Increasing satisfaction with, and usage of, mobile banking presents both an opportunity
and a challenge for banks. The opportunity lies in driving more customers to the mobile
banking channel to take advantage of the convenience and efficiency of the mobile
channel while continuing to meet their need and exceed their expectation. If banks
continue to satisfy customer with the mobile banking while increasing usage, the end
result should be larger number of satisfied and loyal customers. This will help banks
attract a higher share of wallet from existing customers and increase penetration thanks to
stronger recommendation from existing mobile banking customers to prospects.
In addition, increasing adoption of the mobile banking channel will reduce the cost
required to service customers. Banks will be able to provide a more satisfying experience
by delivering services through a lower cost channel. This improves operational efficiency
and reduces costs to banks. The challenge lies in changing customer behavior to embrace
the mobile channel. There will always be holdouts for whom mobile banking is not viable
channel due to perceived security risks, lack of comfort with latest technology and a host
of other reason. Once prospective mobile banking customers try mobile banking, they
may experience a lessening of security concerns and increase satisfaction resulting from
convenience and accessibility of banking services. Banks that figure out how to
maximize the mobile channel will be rewarded with greater loyalty and financial success.
BIBLIOGRHAPHY
BOOKS
R.K. Uppal (2009), future scenario of Indian Banking, MAHA MAYA
Publication, pp.1-11.
R.K. Uppal & Rimpi Jatana( 2007) E-banking in India - Challenges and
Opportunities
Jayshree Bose (Author)
E- Banking in India: The Paradigm Shift
JOURNALS/MAGAZINES/NEWSPAPER
HINDUSTAN TIMES
THE TIMES OF INDIA
WEBSITES
WWW.GOOGLE.COM
WWW.WEKIPEDIA.COM
WWW.INFOGILE.COM
WWW.MMAGLOBAL.COM
QUESTIONNAIRE
Name
:______________________________
Age
:______________________________
Occupation :______________________________
Income
Q.1
Q.2
Q.3
:______________________________
Axis Bank
(b)
ICICI Bank
(c)
HSBC Bank
(d)
HDFC Bank
(e)
(f)
Never
(b)
1 to 4 times
(c)
5 to 8 times
(d)
9 to 12 times
(e)
Over 12 times
Daily
(b)
Weekly
(c)
Monthly
(d)
Depends
Q.4
Q.5
Q.6
Yes
(b)
No
Convenience
(b)
Safety
(c)
Transparency
(d)
Quick transaction
Do you feel safe in disclosing your credit card and purchase information over the
mobile when this information is encrypted?
Q.7
Q.8
(a)
Strongly agree
(b)
Agree
(c)
Neutral
(d)
Disagree
(e)
Strongly disagree
What are the main transactions you would prefer to do through mobile banking?
(a)
Money transfer
(b)
(c)
Mobile Cheque
(d)
Pay Bill
(e)
Stop payment
Are you aware of method which can be undertaken to make any kind of fraud?
(a)
Yes
(b)
No
Q.9
Does your bank educate you about the measure which you can take to secure your
mobile banking transaction?
(a)
Yes
(b)
No
Q.10 With which factor you are uncomfortable with the mobile banking transaction you
do?
(a)
Security issue
(b)
Availability
(c)
(d)
Its techniques
Time-saving
(b)
Confidentiality
(c)
Clarity of transaction