2011

StarConnect Mobile Banking: Bank of India IT Applications in the Management A Study

StarConnect Mobile Banking- Bank of India
Submitted to Prof M. L. Singla

Submitted by: Abhinav Sareen F-152, Section-C, MBA FT-2011-13

Abhinav Sareen
9/26/2011

Contents
INTRODUCTION........................................................................ ERROR! BOOKMARK NOT DEFINED. MOBILE BANKING: AN INSIGHT ............................................ ERROR! BOOKMARK NOT DEFINED. STARCONNECT MOBILE BANKING: AN OVERVIEW ........... ERROR! BOOKMARK NOT DEFINED. MOBILE BANKING ON SMS ............................................................ERROR! BOOKMARK NOT DEFINED. THICK CLIENT (J2ME) ON SMS ....................................................................................................... 7 THICK CLIENT(J2ME) ON GPRS ..................................................................................................... 8 MOBILE BANKING ON GPRS (BROWSER BASED) ............................................................................. 9 THE PROCESS SYSTEM..................................................................................................................... 10 EVOLUTION OF VARIOUS CHANNELS .............................................................................................. 11 PROCESS REQUIREMENTS ............................................................................................................ 12 INPUTS ......................................................................................................................................... 12 OUTPUTS ...................................................................................ERROR! BOOKMARK NOT DEFINED.2 BASIC INFRASTRUCTURE .............................................................ERROR! BOOKMARK NOT DEFINED.3 DESIGN FOR A MOBILE INTERFACE SYSTEM................... ERROR! BOOKMARK NOT DEFINED.4 BASIC DESIGN ....................................................................... ERROR! BOOKMARK NOT DEFINED.5 THE PROCESS FLOW ............................................................ ERROR! BOOKMARK NOT DEFINED.6 THE INPUT LEG ...........................................................................ERROR! BOOKMARK NOT DEFINED.6 THE PROCESSING LEG .................................................................................................................. 16 THE OUTPUT LEG ......................................................................................................................... 17 NODES INVOLVED ......................................................................................................................... 18 CONCLUSION ...................................................................................................................................... 20 ANNEXURE .......................................................................................................................................... 21

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Introduction:
With the advent of the ever dynamic Computing technology, ever incessantly improving over their previous predecessors in the shortest of spans possible, they have become one of the greatest assets for an organization. Coupled with highly effective IT Systems, businesses have developed applications and systems for processes which help them in the following ways: Improve Process Efficiencies Help in significant Cost Reduction Reduction in various overheads Increase in Reliability due to Automation

Hence, over the past few decades, IT applications have found widespread acceptance in the corporate setting due to the above mentioned benefits. In the following report, we will also look at one such application i.e. The Star Connect Mobile Banking Solution implemented by the Bank of India.

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Mobile Banking
Mobile banking (also known as M-Banking, mbanking, SMS Banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest mobile banking services were offered over SMS. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customers. The Conceptual Model for Mobile Banking: In one academic 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 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 as well as financial situations.

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StarConnect Mobile Banking- Bank of India

Bank of Indias StarConnect Mobile Banking Service, is a state of the art facility, which allows you to do virtually all your banking activities from your mobile device. With StarConnect Mobile Banking you can access all your banking accounts with the Bank, 24 hours a day, 365 days a year, from anywhere. A host of features like your banking transaction details, viewing of Account Balance, Mini Statement, Statement, Self Transfers, Third Party Transfer of funds, Utility Bill payments, Ticket booking features among others will definitely make it the most convenient way for you to conduct your banking activities. The service can be availed via two methods: Mobile Banking on SMS Thick Client (J2ME) SMS Mobile Banking Thick Client (J2ME) GPRS Mobile Banking Mobile Banking on GPRS (Browser based)

How to avail the service?

After availing the facility, you can set your SMS Password as under: Logon to www.bankofindia.co.in Click on Mobile Banking link Click on StarConnect Mobile Banking link Logon to Mobile Banking application using your Mobile Banking Userid & Password. (Internet banking and Mobile Banking Userid & Password are same). Provide registered mobile number and Click Set/Change SMS Password to set or change SMS password (4 digits).

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Getting Started:
a.) Mobile Banking on SMS:
After setting your SMS password, you can use the facility, send SMS to +919810558585, in following format (Please provide a Space between keyword, password and other parameters):

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b.) Thick Client (J2ME) SMS Mobile Banking:

The Bank also provides one with the facility of accessing the services using a highly sophisticated Java application that can be downloaded on your mobile and run like any other application to access your account information. For Activation: After downloading and installing Mobile Banking Application on to Mobile phone Handset: Login to Mobile Banking using User ID, SMS Password and MPIN. When Send item to +919810558585 displayed, select YES.

The application is ready to use and can be used for the following applications: View Balance Mini Statement Self-Funds Transfer/ Third Party Funds Transfer Change SMS Password Mail Cheque Status Inquiry Change MPIN Suspend from Mobile Banking

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c.) Thick Client (J2ME) GPRS Mobile Banking:

Another way of accessing the client is by using the Data services being provided by the Telecom service provider and provide the banking services on the EDGE/GPRS Services to the user. For Activation: After downloading and installing Mobile Banking Application on to Mobile Handset: Login to Mobile Banking from Mobile Handset from Applications and enter User ID, SMS Password, MPIN. When Allow Network access? displayed, select YES.

The applications are similar as that of using the Thick Client through the SMS way.

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d.) Mobile Banking on GPRS (Browser based)

Another way of accessing the banking services through the mobile platform can by visiting the Mobile Banking Site at https://mobile.bankofindia.com/mBank/ and click on hyperlink Retail Banking. (Site address needs to be typed in the browser of your Mobile handset and you should have subscribed to GPRS facility from your Mobile Service Operator.)

Login using the Internet Banking User ID and Password and access the account like an internet banking service. Applications:

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The Process System:

The Basic functionality of any commercial bank can be summarised as in the below diagram:

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Evolution of various Customer Channels:

As can be seen from the Diagram, with time as the Banking Solutions evolved to IT Platforms, the automation and convenience levels for the Customer has been significantly been improving. With evolving system the following improves: Higher Efficiency and Reliability of Systems Better Distribution channels Anytime Anywhere access Reduction in the amount of Human Diligence required The option to customise services to meet customer demands

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Process Requirements:
For any Basic Commercial Banking Operation, as mentioned above, the Input and Outputs Required (at a very basic level) will be:

Inputs Required:
Account Management: o Name o Age o Nationality o PAN Number (For Tax Purposes) o Address o Account Number o Balance Amount Fund Deposition: o Amount being Deposited o Date of Deposition o Channel of Deposition Fund Withdrawal: o Amount being Withdrawn o Date of Withdrawal o Channel of Withdrawal

Outputs Expected:
Account Information to be displayed on request Account Information to be Modified and displayed on request A Deposit Receipt and Balance at the end of a Deposit Exercise Cash and a Bill of Transaction at the end of a Withdrawal Exercise A List of Transaction in a specified Time Frame as specified by the User

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Basic Infrastructure:
Storage System (Manual Records or Electronic Databases) Infrastructure for Branches and other Networking Elements A Backbone Network Infrastructure.

Hence, the following have to be taken in to account before designing the Mobile Banking Interface.

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Design for a Mobile Interface System

The basic design for a Mobile Banking System is as follows:

Agent: In this system, the agent will be Network Service Provider who provides the Network services for the Customer. The Service Provider in a sense provides the Bank with the Backbone Network using which the Bank Connects to its Customers using the Application Central System: The Central System here will be the Central Database of the Bank which contains all the Customer Information and Balance information.

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Basic Design:
The Basic Design of the System will consist of the Following Elements: Mobile Equipment Telecom Service Providers Network Inter-Connect between the Telecom Service Provider and the Bank The Banks Network and Database

The Basic flow will be as under:

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The Process Flow:

The process flow will be as follows:

1. The Input Leg:

In the Input Leg, the mobile equipment will generate a request for the Banking system to operate upon. Basically, it is equivalent to the customer asking a banking representative for a job to be done. The various events that will take place for generating and transmitting the request will be as follows: Based on the Application, the Customer will induce a request such as Balance Inquiry, Funds Transfer etc. The Mobile Equipment will transmit the information over the air interface to the concerned Network Service provider Node. The Network Services providers Node will receive the information and analyse the information packet. The Node will route the information packet based on the route corresponding the receivers number. Every node has a specific routing process stored for various addresses it receives. The Packet will be forwarded to the Point of Interconnect. The Point of Interconnect will route the information to the Banks Network

2. The Processing Leg:

In the processing module, the Bank receives the request of the customer. It will receive the customer request in the specified format. It will process the request and forward the request to the corresponding node. After the node is done with its processing, it updates the Customer Database and sends the Output information in a format that is specified by the Network Service operator for correctly routing the packet to the end customer.

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3. The Output Leg:

The Banks network forwards the information to the Point of Interconnect at the Network System Providers side. The node at the Network Service Providers end analyses the Information Packet received and based on the receivers address routes it to the corresponding element. The Mobile Equipment receives the information and the application decodes it and shows the user the relevant information.

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Nodes Involved for Various Modules:

Mobile Banking on SMS
o Node Involved: The Mobile Switching Centre and The Intelligent Network System

Thick Client (J2ME) SMS Mobile Banking

o Node Involved: The Mobile Switching Centre and The Intelligent Network System

Thick Client (J2ME) GPRS Mobile Banking

o Node Involved: The SGSN and the GGSN

Mobile Banking on GPRS (Browser based)

o Node Involved: The SGSN and the GGSN

The MSC and IN System Route:

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The SGSN/GGSN Route:

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Conclusion:
The Mobile Banking system installed by the Bank of India has been a very successful venture. It has not only reduced average turn-around times for servicing customer requests, but also helped increase the distribution network for Bank of India. With the solution, the bank has eliminated the need for manually downloading and uploading data for processing the usually 40,000 ECS transactions, verifying customer details and charging customers on return. The implementation allowed ECS transactions to be automatically processed, allowing for 100 bank staff to be freed up for other work. The application also won Bank of India The Asian Banker Technology Implementation Award for the Year 2011 in the Area of Best Middleware Implementation. Hence, The StarConnect Mobile Banking Solution proves yet again that how important is the implementation of IT Applications and Systems for any Organisation.

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Annexure:
Mobile Banking transactions in India - Operative Guidelines for Banks
1. Introduction 1.1 Mobile phones as a medium for extending banking services have off-late been attaining greater significance. The rapid growth in users and wider coverage of mobile phone networks have made this medium an important platform for extending banking services to customers. With the rapid growth in the number of mobile phone subscribers in India (about 261 million as at the end of March 2008 and growing at about 8 million a month), banks have been exploring the feasibility of using mobile phones as an alternative channel of delivery of banking services. Some banks have started offering information based services like balance enquiry, stop payment instruction of cheques, transactions enquiry, location of the nearest ATM/branch etc. Acceptance of transfer of funds instruction for credit to beneficiaries of same/or another bank in favor of pre-registered beneficiaries have also commenced in a few banks. In order to ensure a level playing field and considering that the technology is relatively new, Reserve Bank has brought out a set of operating guidelines for adoption by banks. 1.2 For the purpose of these Guidelines, mobile banking transactions is undertaking banking transactions using mobile phones by bank customers that involve credit/debit to their accounts. 2. Regulatory & Supervisory Issues 2.1 Only banks which are licensed and supervised in India and have a physical presence in India will be permitted to offer mobile banking services. 2.2 The services shall be restricted only to customers of banks and/or holders of debit/credit cards issued as per the extant Reserve Bank of India guidelines. 2.3 Only Indian Rupee based domestic services shall be provided. Use of mobile banking services for cross border inward and outward transfers is strictly prohibited. 2.4 Banks may also use the services of Business Correspondent appointed in compliance with RBI guidelines, for extending this facility to their customers. 2.5 The guidelines issued by the Reserve Bank on Risks and Controls in Computers and Telecommunications vide circular DBS.CO.ITC.BC. 10/ 31.09.001/ 97-98 dated 4th February 1998 will apply mutatis mutandis to mobile banking. 2.6 The guidelines issued by Reserve Bank on Know Your Customer (KYC), Anti Money Laundering (AML) and Combating the Financing of Terrorism (CFT) from time to time would be applicable to mobile based banking services also. 2.7 Only banks who have implemented core banking solutions would be permitted to provide mobile banking services. 2.8 Banks shall file Suspicious Transaction Report (STR) to Financial Intelligence Unit India (FIUIND) for mobile banking transactions as in the case of normal banking transactions. 3. Registration of customers for mobile service 3.1 Banks shall put in place a system of document based registration with mandatory physical presence of their customers, before commencing mobile banking service. Reserve Bank would consider relaxation in specific cases while approving the proposals of banks.

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3.2 On registration of the customer, the full details of the Terms and Conditions of the service offered shall be communicated to the customer. 2 4 Technology and Security Standards 4.1 Information Security is most critical to the business of mobile banking services and its underlying operations. Therefore, technology used for mobile banking must be secure and should ensure confidentiality, integrity, authenticity and non-repudiability. 5. Inter-operability 5.1 Banks offering mobile banking service must ensure that customers having mobile phones of any network operator is in a position to avail of the service. Restriction, if any, to the customers of particular mobile operator(s) is permissible only during the initial stages of offering the service, up to a maximum period of six months subject to review. 5.2 The long term goal of mobile banking framework in India would be to enable funds transfer from account in one bank to any other account in the same or any other bank on a real time basis irrespective of the mobile network a customer has subscribed to. This would require interoperability between mobile banking service providers and banks and development of a host of message formats. To ensure inter-operability between banks, and between their mobile banking service providers, banks shall adopt the message formats like ISO 8583, with suitable modification to address specific needs.

6. Clearing and Settlement for inter-bank funds transfer transactions 6.1 To meet the objective of a nation-wide mobile banking framework, facilitating inter-bank settlement, a robust clearing and settlement infrastructure operating on a 24x7 basis would be necessary. Pending creation of such a national infrastructure, banks may enter into bilateral or multilateral arrangement for inter-bank settlements, with express permission from Reserve Bank of India, unless such arrangements have been authorized by the Reserve Bank under the Payment and Settlement System Act, 2007. 7. Customer Complaints and Grievance Redressal Mechanism 7.1 The customer /consumer protection issues assume a special significance in view of the fact that the delivery of banking services through mobile phones is relatively new. Some of the key issues in this regard are given at Annex-II. 8. Transaction limit 8.1 For the present, banks are permitted to offer this facility to their customers subject to a daily cap of Rs. 5000/- per customer for funds transfer and Rs.10,000/- per customer for transactions involving purchase of goods/services. 8.2 Banks may also put in place monthly transaction limit depending on the banks own risk perception of the customer. 3 9. Board approval 9.1 Approval of the Board of Directors (Local Board in case of foreign banks) for the product, as also the perceived risks and mitigation measures proposed to be adopted must be obtained before launching the scheme. 10. Approval of Reserve Bank of India

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10.1 Banks wishing to provide mobile banking services shall seek prior one time approval of the Reserve Bank of India, by furnishing full details of the proposal.

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