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Banking Services In India Marketing Essay

The introduction of mobile phone has revolutionised the financial services industry, empowering organizations with home based business models and alternatives to provide 24X7 accessibility to their customers. Mobile Bank is a term used for doing balance checks, consideration transactions, payments, etc. , via a mobile device such as a mobile phone. Mobile banking removes space and time limitations from banking activities such as checking account balances, or transferring money in one account to some other. Mobile banking is an integral element in finance institutions' distribution channel strategies as they be competitive to appeal to and keep customers. Mobile bank also saves the time and work of heading to the bank, waiting in queues, etc.

This paper analyses technologies permitting mobile banking, mobile bank services to the consumers, mobile bank on the planet, knowing of mobile bank services, mobile banking in India, issues for a mobile banking solution, recommendations for increasing mobile bank services and future of mobile bank services on the planet.

Mobile is today's Marketing Tool - A REPORT with regards to Banking Services in India


Information technology is changing speedily daily. It has resulted in the development of more flexible services to the client. The rapid expansion in users and wider coverage of mobile phone sites have made this channel an important platform for extending bank services to customers. Along with the rapid expansion in the number of mobile phone subscribers, banking institutions have been checking out the feasibility of using mobile phones alternatively channel of delivery of banking services.

Mobile banking can transform our life. Today we pays our postpaid mobile phone invoice, recharge a pre-paid cellphone and copy money-the trend has begun in a little way with a couple of providers already offering mobile banking services. Mobile phones as a delivery route for extending bank services have off-late been attaining greater significance. It's estimated that over another three years, there will be over 816 million mobile phone users globally being able to access banking services using their mobile phones.

The biggest gainer in mobile banking is undoubtedly the shoppers. It offers him with a tool to control his money at any point of your time. But also for the banks it can be an opportunity to access a whole new set of customers who have other wise not joined a bank by themselves. By simply running a mobile phone, today anyone can be considered a lender customer. Second, the expense of performing a financial transaction over the mobile network will be greatly less than what it costs the lenders today. As a result, these lenders can cater to more folks without actually opening branches in remote locations, thanks to the existence of the mobile network. It's the next thing for the banks after the introduction of the ATM.


Mobile Bank (also called M-Banking, m-banking, Text message Bank, etc. ) is a term used for performing balance checks, bill transactions, payments, etc. , with a mobile device such as a mobile phone. It had been Internet Banking, which ushered in a new era in banking convenience by delivering the entire functions to the computer, and today mobile banking assurances for taking it to the next level. Mobile banking today is most often performed via SMS or the Mobile Internet but can also use special programs downloaded to the mobile device.


There are four fundamental methods to mobile bank. The first two count on basic solutions that are standard features on almost all mobiles and second two are advanced solutions.

Technologies Enabling Mobile Banking

IVR (Interactive Speech Response)

SMS (Brief Messaging Service)

WAP (Wireless Access Protocol)

Standalone Mobile Application

1. Interactive Tone Response (IVR)

IVR or Interactive Tone Response service operates through pre-specified volumes that banks advertise with their customers. Customer's make a call at the IVR number and are usually greeted by a stored electronic message followed by a menu of different options. Using the activation of computer established IVR functions, the gamut of services that can be lengthened by mobile banking has increased significantly. The bank's pcs are linked with a telephone and calling is associated with a modem. The callers or the clients are identified by the codeword/keyword and consequently sent a suitable answer their query.

Customers can also be provided with a Voice Email service with simple and limited services. With no need to visit the bank branches, customers can gain access to the bank services and can get an answer to all or any their enquiries and services demands through the mobile bank center. IVR is minimal sophisticated and the least "mobile" of all solutions. Actually, it doesn't require a mobile phone in any way. In addition, it only allows for inquiry-based trades, so customers can't utilize it for more advanced services.

2. Short Meaning Service (SMS)

In some circles, mobile bank and SMS banking are synonymous. That's because Text banking uses text messaging and the iconic activity of mobile phone use. SMS works in either a push setting or a draw setting. In pull setting, the bank sends a one-way text message to notify a mobile customer of a certain bank account situation or to promote a new loan provider service. In force mode, the mobile subscriber sends a text with a predefined demand code to specific number. The bank then responds with an answer SMS containing the specific information.

3. Wireless Program Protocol (WAP)

WAP is the technology architecture that makes being able to access Websites possible from a mobile phone. Since it includes the concepts of browsers, servers, URLs and gateways, WAP provides a customer experience that echoes Internet banking conducted on a home computer. That is a wonderful feature to many banks, who also appreciate the fact that customers don't have to download any proprietary software to take pleasure from robust usage of a full type of services and trades.

4. Standalone Mobile Application

Some banks are actually providing a downloadable client that mobile members can use to gain access to lender services. These mobile applications give you a reliable route and allow users to perform even complex transactions. In addition they allow banking institutions to modify the software and brand it accordingly. As a bank institution prepares for the mobile banking trend, it must weigh advantages and disadvantages of these various solutions to decide which one best fulfills the needs of its customers and its particular technology infrastructure.


Simplest way to classify these services with regards to the originator of a service treatment is the 'Thrust/Pull' aspect. Second way to categorize the mobile banking services, by the type of the service, provides us two types of services one is Transaction based and another one is Enquiry Based. So a obtain bank statement is an enquiry structured service and a request for fund's transfer to some other accounts is a transaction-based service. Transaction centered services are also differentiated from enquiry based mostly services in the sense that they might need additional security over the route from the cellular phone to the banks data servers.

Based upon the aforementioned classifications, we arrive at the next taxonomy of the services detailed before.

Mobile Bank Services

Push Based

Pull Based

Transaction Based


Fund Transfer

Bill Payment

Other financial services like talk about trading

Enquiry Based

Credit/Debit Alerts

Minimum Balance Alerts

Bill Payment Alerts

Account Balance Enquiry

Account Assertion Enquiry

Cheque Status Enquiry

Cheque Reserve Requests

Recent Deal History

One way to classify these services depending on the originator of a service treatment is the 'Thrust / Yank' mother nature. 'Force' is when the bank sends out information founded upon an agreed set of rules; for example, bank sends out an alert whenever a customer's account balance will go below a threshold level. 'Yank' is when the customer explicitly requests something or information from the bank, so a obtain last five ventures statement is a Pull-based offering.

Mobile Banking Services to the Consumers

Banks offering mobile access are mostly encouraging some or all of the following services:

Account Information



Content Services

Mini-statements and checking of accounts history

Alerts on profile activity or passage of set thresholds

Monitoring of term deposits

Access to loan statements

Access to credit card statements

Mutual cash / collateral statements

Insurance coverage management

Pension plan management

Domestic and international fund transfers

Micro-payment handling

Mobile re-charging

Commercial payment processing

Bill repayment processing

Portfolio management services

Real-time stock quotes

Personalized notifications and notifications on security prices

Status of demands for credit, including mortgage acceptance, and insurance coverage

Check (cheque) booklet and cards requests

Exchange of data text messages and e-mail, including complaint submission and tracking

General information such as weather improvements, news

Loyalty-related offers

Location-based services


Safety: Every debit and credit above a certain value is intimated for you. Stay up to date on your bank account transactions all over the world.

Convenience: Customer do not need to stand in the lender counters for various enquiries about his accounts. Forget about queues at the ATM to check on your accounts.

Time Saving: No traveling to branches or ATMs to keep an eye on your bill. It reduces cost and time for rendering service to the customers.

Updates: Get computerized updates on expenses payments and scheduled payments on your cell.

Accessibility: Avail of this service from all over the world, even on the road.


As shown in Table 1, most survey respondents remain unsure whether their loan provider offers mobile bank services, except those in India. The difference could be credited to marketing that is more effective and promotional promotions in India, where 71% of survey respondents know that their loan company offers such services - only 13% of respondents not know. China gets the second largest proportion of respondents who know that their standard bank offers mobile banking services. It is no coincidence therefore that India and China also have the highest usage rates for mobile banking services within Asia Pacific. Awareness of mobile banking is also saturated in India.

Conversely, a higher percentage of respondents in Taiwan (68%) do not know if their loan provider offers mobile banking services - this region corresponds to the lowest usage rates. The situation in Singapore, in the mean time, is just a little different, with 41% of respondents thinking that their standard bank does not offer mobile banking services - however, it is not clear whether this can be an erroneous conception or if, indeed, few Singaporean banks actually offer mobile banking services. The former is most probably, given that Singapore is one of the most advanced locations in Asia Pacific in conditions of infrastructure and mobile bank 'readiness'.

Table 1

Awareness about Mobile Bank Services




Don't Know





















Source: SYBASE


India is one of the biggest markets for mobile banking with the global remittances. During 2007, over $318 billion was remitted and India topped the list with inward remittances of $27 billion. Over the next couple of years, quite a lttle bit of that money would stream wirelessly on mobile sites. Thus, the mobile phone can change the face of banking in India.

With nearly 278 million cellular phone subscribers and a growth rate of about 8 million new users each month, the opportunities for mobile bank seem infinite. Along with the rapid development in the quantity of cellular phone members in India (about 278 million as at the end of March 2008 and growing at about 8 million per month), banks have been discovering the feasibility of using cell phones alternatively channel of delivery of bank services. India's second-ranked status among the list of world's top mobile phone service market segments may present a pointed contrast to the penetration of services such as insurance and banking here. But, put both together and the opportunity of providing such services through mobile phones make the country among the largest potential market segments for banking and other financial services.

Mobile Banking is about the most Mobile services that are used by Indians. Have a look:

1 from every 3 people in India is ready to switch to some other bank if it includes them free mobile bank.

81% of Indian respondents are aware they can check standard bank balance over a mobile phone.

49% have used the assistance in the last 90 days.

42% of Indian individuals are able to state their standard bank balance at any moment.

71% consumers in India are much more aware when compared to their counter-top parts in the other countries on the offering using their company banks on mobile phones.

50% of Indian respondents checked their bank balance on their cellular phone and 54% via the Internet.

Majority of customers portrayed concern over security of data on Mobile Bank.

India's leading telecom companies began their services for Mobile Banking, they use these services as a marketing tool to advertise there services on this basis. Here are some giants of telecom business in India who are offering Mobile Banking in a variety of states.

Operators and Circles empowered for the Mobile Banking Service in India

List of Providers and Circles enabled for the Mobile Banking Service are as below: -






Tata indicom

Airtel Cellular


Andra Pradesh






Madhya Pradesh





Uttarpradesh (Western world)


Andra Pradesh












Uttarpradesh (Western)

West Bengal

Andra Pradesh










Uttarpradesh (West)

Andra Pradesh








Himachal Pradesh




Madhya Pradesh








Uttarpradesh (East) &West

Andra Pradesh






Himachal Pradesh




Madhya Pradesh







Uttarpradesh (East)

Uttarpradesh (West)


Rest of Tamilnadu



Madhya Pradesh



Guidelines for mobile banking services are as follows:

Operative Guidelines

Transaction limit as daily cover of Rs 5, 000 per customer for money transfer and Rs 10, 000 per customer for ventures concerning purchase of goods/services

Banks may set up a monthly transaction limit depending on banks risk conception of the customer

Authentication Guidelines

One time authorization of the RBI; approval of the lenders Table of Directors

Document-based enrollment with required physical occurrence of the customers

Allowing only Indian Rupee structured domestic services with strict prohibition on cross-border inward and outward transfers

Only bankers, that are certified and supervised in India, and also have a physical occurrence in the united states will be permitted to offer mobile banking services

Banks which have implemented core bank solutions would be allowed to provide mobile bank services

Services shall also be constrained and then customers of bankers and/or holders of debit/credit credit cards issued according to the RBI guidelines

Interoperability Guidelines

Banks must ensure services to customers regardless of the network operator they have got subscribed to. The leeway is bound to a maximum period of six months

To enable real time fund transfer recommendations stipulate that finance institutions adopt message types like ISO 8583, with suited modification to address specific needs

Security Guidelines

All mobile bank shall be allowed only by validation via a two factor authentication

One of the factors of authentication will be mPIN or any higher standard

End-to-end encryption of the mPIN is appealing where mPIN can be used,

For mobile bank facilities that do not contain the contact number as identity need a separate login Identification and security password to ensure proper authentication

It is necessary that the mobile bank servers at the banking companies end or at the mobile bank service providers end to be accredited by an accredited external agency

There must be appropriate level of encryption and security by any means levels of the business deal processing with an endeavor to ensure end-to-end encryption of the mobile banking transaction

Banking regulations require implementation of software level encryption over network and transfer coating encryption wherever possible

Establish proper firewalls, IDS, data file and system integrity checking, surveillance and incident response steps and containment procedures; utilizing physical security steps, conducting regular risk management examination, regular audits on the mobile banking systems, etc.


The obstacles in creating a sophisticated mobile bank application are:

Challenges for Mobile Banking



Scalability & Reliability

Application distribution


Key problems in developing a sophisticated mobile banking application are:


The desire for interoperability is largely dependent on the banks themselves, where installed applications provide better security, are much easier to use and invite development of more technical capabilities a lot like those of internet bank while SMS provides the basics but becomes quite difficult to operate with more complex ventures.

There is a misconception that there is difficult of interoperability between mobile bank applications credited to perceived lack of common technology standards for mobile bank. Used it is prematurily. in the service lifecycle for interoperability to be addressed in a individual country, as very few countries have more than one mobile banking company. As mobile bank matures, money actions between service providers will naturally adopt the same requirements such as the bank world.


Security of financial transactions, being carried out from some remote control location and transmission of financial information on the air, will be the most complicated issues that require to be dealt with jointly by mobile program developers, cellular network service providers and the banking institutions' IT departments.

Another task of finance institutions is to scale-up the mobile bank infrastructure to take care of exponential development of the client foundation. With mobile banking, the customer may be sitting down in any part of the world (true anytime, anywhere banking) and hence banks must ensure that the systems are up and running in a true 24 x 7 fashion. As customers will find mobile banking more and more useful, their expectations from the answer will increase. Banking companies unable to meet up with the performance and trustworthiness prospects may lose customer confidence. You can find systems such as Mobile Deal Platform which allow quick and secure mobile enabling of varied banking services. Lately in India there has been a phenomenal growth in the use of Mobile Banking applications, with leading finance institutions adopting Mobile Transfer System and the Central Bank publishing suggestions for mobile banking operations.

Application Distribution

Due to the type of the connection between bank and its own customers, it would be impractical to expect customers to regularly visit finance institutions or connect to a internet site for regular update of these mobile banking software. It will be expected that the mobile request itself check the improvements and posts and download necessary patches. However, there may be many issues to put into practice this process such as upgrade / synchronization of other centered components.


It would be likely from the mobile program to support personalization such as :

Preferred Language

Date / Time format

Amount format

Default transactions

Standard Beneficiary list



The impetus now could be for mobile and bank industries to encourage mobile banking services and also to highlight the benefits of mobile banking to a audience who are likely to be open to using another tool to aid their passion for personal financial services in a far more immediate manner than the web can provide.

For example, there is a considerable affinity for mobile banking services across these huge populations and, in some areas, encouraging levels of service awareness to adoption ratios. Recognition is key if banking is to understand the opportunities offered by mobile services. Most of the Asia Pacific mobile end user platform is a essentially untapped market in conditions of mobile banking and there is apparently obvious potential to increase existing efforts in helping consumers connect to their finance institutions via mobile data.

In response to the findings, it is rolling out five key things to consider for developing mobile services and adoption in the banking sector.

Increase awareness of mobile banking services amongst customer base

Develop more superior mobile data services beyond balance and repayment updates

Establish the enthusiasm for mobile bank services with different facets of the customer demographic

Evaluate operational personal savings of word 'push' services to replace aspects of customer support proposition

Use versatility of mobile data jobs to validate wider strategy mobile services expansion

Mobile bank is definitely not a panacea for any customer needs. Like any technology format, a tool can boost existing services. Customers are keen to be stored abreast of any changes to the nano-economy and it would appear that existing mobile provisioning could capitalise upon this opportunity and better get the thoughts of mobile users. Development and cost management are critical tenets for commercial success in the financial sector and mobile bank services are capable of delivering against both these objectives if properly executed.


India offer huge potential for mobile bank, as the mobile infrastructure is way better than fixed series infrastructure, and much more advanced. Further, India is also witnessing exponential growth in the mobile industry. For example, the Indian telecom market is galloping with 162. 3 million mobile users as on March 2006 and an average of 5-6 million mobile users being added on a monthly basis. However, currently, in India mobile banking is mushrooming and gaining momentum.

Mobile banking is the evolutionary step after Internet banking. It is yet another service bolted together with a preexisting solution, making usage of services more immediate and lowering customer reliance on branch infrastructure or usage of the Internet. A mobile standard bank is by definition a new offering and so unconstrained by existing infrastructure, costs constructions and product rules, and can be optimized for a completely mobile experience.

Major steps are being taken by each bank or investment company as well as the mobile providers to proactively promote the new repayment schemes. The recommended advantages financial institutions have over mobile operators are their brand names. In fact, consumers trust and are loyal to classic payment schemes. If banks decided to extend the use of the payment systems to mobile repayments, they might have instant recognition from the consumers since they know the brand and they have been using other kind of purchase facilities on many occasions without any problems.


Mobile banking gets wider acceptance, but the convenience it includes has its own share of risk. It is therefore even more important to understand the safeguards for the secure use of this medium for financial ventures. Cell phones as a medium for extending banking services have off-late been attaining better significance. The quick development in users and wider coverage of mobile phone sites have made this medium an important program for extending banking services to customers. With all the rapid growth in the number of mobile phone clients, banking companies have been discovering the feasibility of using cell phones as an alternative route of delivery of bank services.

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