Chapter 1

INTRODUCTION

INTRODUCTION TO MOBILE BANKING

Internet Banking helped give the customer's anytime access to their banks. Customer's
could check out their account details, get their bank statements, perform transactions like
transferring money to other accounts and pay their bills sitting in the comfort of their
homes and offices. However the biggest limitation of Internet banking is the requirement
of a PC with an Internet connection, not a big obstacle if we look at the US and the
European countries, but definitely a big barrier if we consider most of the developing
countries of Asia like China and India. Mobile banking addresses this fundamental
limitation of Internet Banking, as it reduces the customer requirement to just a mobile
phone. Mobile usage has seen an explosive growth in most of the Asian economies like
India, China and Korea. The main reason that Mobile Banking scores over Internet
Banking is that it enables Anywhere Anytime Banking'. Customers don't need access to
a computer terminal to access their bank accounts, now the can do so on-the-go while
waiting for the bus to work, traveling or when they are waiting for their orders to come
through in a restaurant. The scale at which Mobile banking has the potential to grow can
be gauged by looking at the pace users are getting mobile in these big Asian economies.
According to the Cellular Operators' Association of India (COAI) the mobile subscriber
base in India hit 40.6 million in the August 2004. In September 2004 it added about 1.85
million more. The explosion as most analysts say, is yet to come as India has about one of
the biggest untapped markets. China, which already witnessed the mobile boom, is
expected to have about 300 million mobile users by the end of 2004. All of these
countries have seen gradual roll-out of mobile banking services, the most aggressive
being Korea which is now witnessing the roll-out of some of the most advanced services
like using mobile phones to pay bills in shops and restaurants.
Mobile banking (m-banking) involves the use of a mobile phone or another mobile
device to undertake financial transactions linked to a clients account. Mbanking is one of
the newest approaches to the provision of financial services through ICT, made possible
by the widespread adoption of mobile phones even in low income countries. The roll out
of mobile telephony has been rapid, and has extended access well beyond already
connected customers in developing countries. There is mounting evidence of positive
2

social impact on poorer people and communities as a result. There are sound reasons for
the hope that m-banking could have similar impact. A mobile network offers a high
technology platform onto which other services can be often provided at very low cost to
deliver an eff ective result. Mobile data channels are often under-used and therefore may
be offered at low cost by the network operator. M-banking services which use channels
such as text messaging/ SMS can be carried at a cost of less than US1c per message. The
low cost of using existing infrastructure makes such channels more amenable to use by
low income customers. M-banking is new in most countries, and there has been limited
donor support in the sector to date. This report considers the case for donors to support
mbanking as a sector, by assessing:
1. The likely impact on the lives of poor people in theory and practicethe why of
donor intervention(Section 2);
2. The needs and gaps arising from the development of the sector to date, in the light of
what donorfunded programs are already doing (Section 3).
In the light of this assessment, the report goes on in Section 4 to consider strategies and
particular initiatives which donors may take to respond concretely to the needs and gaps
identified.
The Internet is revolutionizing the way the financial industry conducts business,
empowering organizations with new business models and new ways to interact with
customers. The ability to perform banking transactions online has created new players in
the financial industry, such as online banks and brokers who offer personalized services
through their Web portals. This increased competition is driving traditional financial
institutions to find new ways to add the value to their products and services, gain
competitive advantage and increase customer loyalty while also attracting new, highvalue clients.

HISTORY
Mobile banking customers now enjoy a more user-friendly service compared with the
service's beginnings in the early 2000s. The decade has been a time of trial and error, as
financial institutions struggle to meet consumer preferences for mobile banking features.
Early 2000s

Banks faced mobile banking challenges in the early part of the decade.
Consumers found it difficult to view their financial information on the small cell phone
screens that were common at the time. Some banks offered the service, only to soon
discontinue it; in 2002, Wells Fargo developed a mobile banking service and only 2,500
customers enrolled in it. Because of the poor response, they soon withdrew the offering.

Mid-2000s

As the size and capabilities of mobile devices increased, so did the effectiveness
of mobile banking. Banks introduced services that accommodated more types of cell
phones and mobile devices, including smart phones. Consumers preferred the easier
navigation and improved images and graphics offered by updated, technologically
advanced mobile services.

2008 and Beyond

In 2008, smaller banks began to offer mobile banking. More customers of large
banks were also using the service. As of February 2009, over 1.9 million customers were
using Bank of America's mobile service in the U.S. Other industry players also entered
the market; AT&T offers a mobile banking application that allows customers from
different banks, with different types of mobile devices, to more easily conduct
transactions.
4

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.
Mobile banking has until recently (2010) most often been performed via SMS or the
Mobile Web. Apple's initial success with iPhone and the rapid growth of phones based
on Google's Android (operating system) have led to increasing use of special client
programs, called apps, downloaded to the mobile device.
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.

OBJECTIVES:
Mobile and wireless technology, combined with the wide variety of portable devices
available today, enable new revenue opportunities for financial services organizations.
This provides a new channel that can beused to refresh and expand the customer
base, attract prime customersand enhance loyalty. With mobile and wireless
technology, banks canoffer a wide possibility of services to their customers, from the
freedomof paying bills while stuck in traffic, to receiving notification of a changein stock
price while having lunch, the challenge, then is how to turn these possibilities into a reality for the
customers.
1. Always on 24 7 access: Mobile networks will provide the ability for consumers to
be transaction- ready, much in the way cable access has facilitated online pc access and
reduced consumer dial up delays 3555.
2.

Advanced penetration of mobile networks: 2G (second generation) networks

already cover more than 90 percent of the population in the western world, and this
number is growing steadily.
3.Personalization: Through SIM (Subscriber Identity Module) cards, mobile customers
have a specific profile that enables customized functionality that directly reflects the way
they want to transact business over mobile devices. Through the convenient addition of a
multi-application relationship card, mobile customers will also have a built in platform
for a host of other application services, including security keys, virtual credits cards, and
other customized payment instruments.

4. Rapid evolution of global protocols such as WAP (wireless application protocol):

This enables the communication channel between computers and mobile devices. The
WAP component essentially provides the facility for reformatting data for display on
wireless hands.
5. Faster Data Processing Speeds: Increases in bandwidth and data transmission a speed
makes mobile data services efficient and cost - effective in a real time environment.
6. Security: Effectively, the mobile banking transaction can be protected by a private
key stored on SIM card and hence mobile phone can become a wireless wallet to protect
proprietary and financial information

IMPORTANCE:
Mobile customers: Those who use mobile telephony use mobile banking service. Mobile telephony is used through
mobile phones.
Mcommerce: m c o m m e r c e whereby business and trade takes place through mobile on-line. Those mobile
users who became on line internet users do m commerce.
Tec h n o l o g y b a s e d : Mobile banking are based on technology of development. Mobile banking makes
use of internet for transmission, transaction & delivery of banking services. The network
provider the required software support.
Services: Mobile banking offers the entire internet-based banking services such as on-line account
opening, account verification, funds transfer etc.
Eligibility:
individual customer having account with any branch of a particular bank that
offers internet banking facility. Further, it is also required that the customer is registered as on
internet banking customer.

Application: A n application duly filled is to be submitted to the bank. The application is invariably
made available in the official website of the bank.

FUNCTIONS:
Examined applications
In the following, the main types of existing mobile banking applications are introduced.
These build standard types as each of them is representative for a series of comparable
applications. While WAP-banking and mobile banking via PDA are generic, SMSbanking and mobile banking with SIM Toolkit use specialties of the GSM standard.
WAP-banking
The most widespread solution for mobile banking is based on micro-websites following
the WAP standard (Wireless Application Protocol). The function of WAP banking is in
many ways similar to the function of Electronic banking using http. The client sends a
request and gets a response with page content, which is stored on or dynamically
generated by a standard web server. The main difference is in the usage of a WAP
gateway for the conversion of the protocols. At banks must be considered that very
sensitive data is processed. While a normal content provider doesnt has to observe
special security precautions, and in some cases can even use the services of extern
providers, has to secure its web server and WAP Gateway especially against unauthorized
access. This is especially necessary because of the fact that inside the WAP Gateway the
encryption protocol is converted from SSL/TLS to WTLS with the effect that data is not
encrypted while it is processed. While authentication is assured via a PIN (personal
identification number) of the user, authorization for transactions is realized via
transaction numbers (TAN). This concept, known from the electronic banking, forces the
user to carry a TAN lists with him in order to make transactions.
9

SMS-banking
The Short Message Service (SMS) is a GSM service to exchange text messages up to 140
byte (or 160 characters of 7 bits). The transmission of mobile-originated short messages
is carried out by the short message service center (SMSC) of the particular network
operator. The SMSC is receiving the message from the mobile device and routing it to the
destination device. For generating mobile-terminated short messages, it is possible that a
company or a special service provider runs an own SMSC. Thus, a bank could generate
SMS from bank data like account balance or account movements and send it to the
mobile device of the customer. This technique is used at SMS-banking: The customer
sends an SMS with a request to the bank, and gets the desired data as an answer.
The customer has to include a PIN for authorization in every SMS he sends to his bank.
Alike the WAP banking, one should pay special attention on the security of the location
of the SMSC. Many service providers offer the operation of SMSC as a service. The
usage of such a service is out of question for banks, because of the high sensitive
character of the transmitted data. For this reason it is mandatory for banks to run their
own SMS-Gateway and secure it from unauthorized access. The main problem with this
kind of transmission is the missing encryption of the data during the on-the air
transmission between the service center and the mobile phone. An encryption of pure
text-SMS is not possible (unless an application on the mobile device would be able to
decrypt the information).

10

ROLES:
The overall mobile space is hot, and mobile banking has enjoyed basking in the heat. 20
of the top 50 financial institutions in the U.S. had already implemented mobile banking
by 2008.
In 2009, this number grew by 25 percent (to 25 banks), and as of January 2010, no
remaining large banks had launched mobile banking. From a top 50 bank implementation
perspective, it would appear that a plateau has been reached.
Top 50 financial institutions with mobile banking in place account for 80 percent of the
deposits in their peer group.
In the context of all the commercial banks, savings institutions, and credit unions in the
US, top 50 financial institutions with mobile banking constitute 45 percent of the U.S.
deposit base.
Banks and vendors share a belief in the growth potential of mobile banking, including
the acquisition of high-cost, offline customers.
Both parties are nearly unanimous in their views that certain front end functionalities,
such as real time alerts and person-to-person (P2P) payments, will be important in the
near future.
Both sides also recognize that mobile banking has to be a channel of its own, not an
appendage of online banking; as such, the two industries feel that greater integration with
back end core banking systems is required.
11

 Both banks and vendors feel that mobile channel monetization will eventually occur,
either in the form of direct monetization (e.g., fee revenue from expedited payments,
remote deposit capture) or indirect monetization (e.g., increased use of cards resulting
from mobile marketing). However, many of their hopes for monetization appear to be out
of line with early adopter, in-market solutions.
Banks and vendors face differences of approach. This is especially true within the
context of scope and detail. Banks tend to take a broader approach, having to worry about
multiple channels, systems, and organizational units. On the other hand, vendors are
mainly concerned with a narrower approach, because mobile technology is their field of
expertise.
This difference in approach translates into contrasting outlooks and expectations, as
well as some frustrations. Examples of this can be found in views of front end
functionality. Banks worry that P2P payments have to be cross-channel (i.e., including
online, ATM), while mobile tech vendors stress the importance of the mobile use case.
Banks are looking for corporate mobile banking solutions, but vendors are focused on
meeting the needs of the much larger retail user base.
Near field communication (NFC) payments and downloadable apps represent other
front end functionalities where the two industries do not always see eye to eye.

12

Chapter 2
RESEARCH OBJECTIVES AND
METHODOLOGY

13

RESEARCH OBJECTIVES AND METHODOLOGY:

Parameters of Research

Product range offered.

Service quality.

Network

Benefit offered to customers

14

RESEARCH METHODOLOGY

TYPE OF RESEARCH - Exploratory research conclusive

primary data : through observation as well as personal interview
secondary data : through journal, research paper, monthly reports and financial
reports.
SAMPLING METHOD- through judgment and convenience method
SAMPLING UNIT- New Delhi

SAMPLING ELEMENTS Existing and potential customers in delhi.

SAMPLE SIZE- 100

15

DATA COLLECTION AND METHODOLOGY

The task of data collection begins after a research problem has been defined and research design is
chalked out. While deciding about the method of data collection to be used for the study; the
researchers should keep in mind two types of data i.e. Primary and Secondary data.
The primary data are those which are collected afresh and for the first time, and thus happen to be
original in character. The secondary data on other hand are those which have already been collected
by someone else and which have already been passed through the statistical process. The data used
for the present research is primary data.

Data collection was done through sample, survey method involving the questionnaire to
be filled in by the investigator. This was chosen because most of the facts and data where
of the nature of primary data. For study like this time framework is not significant.
However, for cross sectional analysis, both the insurance and customers were interviewed
to find out real state of the affairs of the problem understudy. We had been close to the
data obtaining through questionnaire and percentage as well as trend analysis have used
to interpret the data.
Over all study is based on the findings through survey of 100 persons belonging to varied
age groups, as follows:
Age groups

no. of customers

18-26

21

26-35

33

35-45

34

45-55

06

Above 55

06

Total

100

The different methods that are used for collecting primary data are as follows:
A) Contact Method:

16

The 'contact method ' considering the short coming was selected to personal interview. This
method being versatile was arranged interviewing as it made concerned approach to the respondent.

B) Observation Method:
The present investigation was done on the basis of making note of behavior and gestures of the
target customers

C) Questionnaire Method:
The method of data collection is quite popular and is being adopted by researchers, private
individuals and organization.

D) Schedule Method:
The method of data collection is very much like the collection of data through questionnaire, with
little difference which lies in the fact that schedules are being filled in by the enumerates who are
specially appointed for the purpose, these enumerators go to the respondents along with the
schedule and put up the question. Inferences are drawn on the answers given by them.

17

Chapter 3
Data processing, Analysis &
Interpretation

Customer requirements for mobile banking applications

Set of customer requirements
Technical requirements
Usage is possible with both kinds of devices
Adaptation to device
18

 Usage regardless of network operator

Small amount of transmitted data

Usability requirements
Possibility to work offline
Simple data input method
Resumption of usage at the same point
One-Click-Request

Design requirements
Possibility to personalize the application
Possibility to scale the application
Announcement of events
Wide range of functionality

Security requirements
Encrypted data transmission
Authorization of access
Simple Authorization

Could Mobile Banking Go Global

People who have never had a bank account could enjoy basic banking facilities for the
first time due to mobile financial services. Basic mobile financial services are already
19

available in developed countries. However, the article explains that it makes more sense
for mobile financial service providers to target emerging markets where mobile devices
will make more impact since this markets have limited wire networks. The services are
cheaper to build and offer customer have fewer alternatives. To cash full potential of
emerging markets, requires a right kind of alliance with leading financial firms and
telecom companies including merchants and retail chains.

Emerging markets: The greater opportunities

Mobile financial services are just that: financial service delivered through the medium
of mobile handset. Users can make basic inquiries about their balances or, in a more
complicated maneuver, their Payments. Basic services are already widely available in
developed countries and in the more sophisticated emerging markets, such as Hong Kong
and South Korea. So far, though, user in this market remains unimpressed by the services,
and providers havent been able to charge anywhere near what they cost to deliver.
Consumers and business in emerging markets are likely to find mobile financial services
more attractive than do their counterparts in developed markets, because they have fewer
alternatives. For many remote or low income consumers, mobile handsets and mobile
internet could first times, provide access to financial service such as basic banking and
electronic payment; otherwise financial providers find such segment impossible to serve
cost- effectively. Mobile networks are cheaper to build than fixed lines networks, and
mobile services are generally to roll out than their precursors; a mobile payment network,
for example, can cost less to create and operate than an electronic point- of- sale (pos)
merchant networks. This means that some countries will be able to leapfrog over
intermediate technologies and move directly from a paper based payments systems to a
mobile one, without ever having to build an extensive wired POS or Automated tellermachine network.

20

Mobile Banking: No wires, No worries, New Customers

Mobile communication devices are revolutionizing banking transactions over wireless
network and the Internet. To attract and retain customers, bank need to exchange their full
range of services across a wide range of Mobile, wireless devices without having an
impact on their current infrastructure and the delivery channels it currently supports.
Wireless Networks, Mobile Gateways, Wireless Application Protocol (WAP) & Wireless
Markup Language (WML) all play an important role in bringing mobile banking strategy
to the market.

In addition to established traditional channels, including branch banking and ATM

banking, most major banks in today market now offers e-banking as an extension to their
existing array of services & conveniences of wired consumers & businesses, the next
phase in the revolution is wireless-mobile-banking that is available anytime anywhere
from always-on mobile devices like mobile phones and personal digital assistant (PDA).
With the proliferation & cost effectiveness of mobile delivery channel, banks have a
built-in delivery mechanism that can offer services & 247 access regardless of where
the customer happens to be. Unlike PC-Based

E-banking, M-banking provides banks

with the unprecedented opportunity to reach their customers in an unrestricted

environment. The big benefits for banks? Higher customer satisfaction & loyalty, no
transaction-based fee revenue, lower cost of ownership and integrated customer
relationship management channels.

General considerations
A mobile banking application is, first of all, a mobile application. To conceptualize a
mobile application, additional informational added values have to be targeted, using
mobile added values [14]. In other words, it is far from sufficiency to just porting an
existing Internet application on a mobile device. Mobile applications have to be
21

specifically made-to-measure on the one hand side to the needs and expectations of the
mobile user and on the other hand side to the specific restrictions of mobile
communication techniques and mobile devices. In order to derive a set of requirements to
mobile banking applications we pursue two steps: Firstly we identify general
characteristics of the mobile use, which are relevant. Secondly we closely watch the user
and his context when wanting to use mobile banking.

Mobile banking use cases

A mobile user has to be seen from his context when using the application. Needs and
expectations are not generic, but bound to this context.
As a typical mobile banking user, we consider someone who already is an electronic
banking user shows significant affinity to technology and often finds himself in situations
where he can not (or does not want to) rely an infrastructure necessary for electronic
banking.
In the following, we introduce four use cases. These have been developed in the course of
two group discussions; each group consisted of mobile banking users and mobile
commerce experts. The groups focused on identifying real-life situations in which the use
of mobile banking provides an informational added value. The resulting situations have
been aggregated to the use cases The use cases are not exhaustive, but representative:
Each case stands for a series of cases, which are similar in the depth of the desired
information and/or the conditions of the usage. For each use case we identify the most
important, concrete need that the user has in this particular situation.

Use case 1: Request of account balance.

The user is in a mobile situation (e.g. in a department store) and intends to know his
account balance, e.g. to verify his account before realizing a spontaneous purchase.
Resulting need: Quick obtainment of account balance.
22

Use case 2: Control of account movements

The user is waiting for an important cash receipt on his account. He intends to have
the exact details of the cash receipt. Resulting need: Continuous control over movements
on the account.

Use case 3: Instant payment.

The user is in a mobile situation and intends to make a payment by bank transfer
from his account. Resulting need: Instant execution of a bank transfer.

Use case 4: Administration of the account.

The user intends to use spare time (e.g. using a train or waiting on the airport) to
administrate his account. Resulting need: Quick and easy-to-use execution of transactions
and administration is possible.)

Mobilizing Banking Solutions : Best Practices

Security in the Wireless world is complex and different from tethered network
security models. Greater demand to share information is putting stress on
companies to prevent information from falling into wrong hands. With the growth

23

of Wireless phones, the demand for Mobile banking services is escalating. To stay
competitive, banks are deploying compelling Wireless applications.

Mobile Banking Solutions:

Wireless applications offer the opportunity to provide secure, actionable, real-time
data through a highly personalized service. Some of the services are:
Offer account services: These applications allow banks customer to apply for new
banking services, choose features of existing banking services, and personalize
banking services.
Provide account information: Customer-driven on-demand request for a variety of
account information

including account balances, stock

portfolios

and billing

information.
Execute transactions: Transactional applications enable customer to wirelessly
transfer balances, pay bills and conduct foreign exchange orders.
Provide transaction history and aggregate banking information: Customers can
review banking events for a number of accounts and wirelessly retrieve banking
and non-banking information.
Transmit banking alerts and reminder messages : Customer-controlled alert profile
enable rapid response to news and banking events, Banking advice may also be
distributed through these applications.

Enable Wireless messaging: Wireless messaging, including SMS, e-mail and instant
messaging, allows customers to interact with portfolios managers, bank officials
and other customers.
Extend banking portals: Banking portals provide useful content for customer and
provide the banks the opportunity to cross-sell other products or services.
24

Offer location-based banking services: These applications enable subscribers to

access services that are tailored to their geographic location, such as the location
of nearby offices, branches, agents and ATMs.

Mobile Platform Selection Criteria :

To successfully support banking applications, mobile platform must support a
number of standards to allow banks to leverage existing technologies for the
subscribers that access them. A number of standards are provided below:
Transactional interface with back-end data: Mobile banking applications are not
simple extension of internet. The procedure of scraping Web-based information
and transmitting it to wireless devices produces very fragile and unreliable
banking applications. Mobile platforms should connect directly to back-end data
sources and use open standard to support transactional applications.
Security : Mobile platform should support extremely high level of end-to-end
security including support for privacy,

encryption, two-factor authentication, data

integrity, and non-repudiation. Different levels of security will vary based on

requirement that change for the size of transaction, the parties involved, and the
type of information exchanged.

Security for Mobile banking

It is clear that for the mobile phone to become a transactional device, the security of all
personal data transmitted through the wireless handset will be critical. Just as ecommerce over fixed- line Internet device can hardly be expected to flourish if frauds or
25

theft is easy. Business and consumer subscribers, commercial entitles and industries are
unlikely to make full use of the potential of the new mobile communications media if
they are insecure.
Although security is mainly a matter of technology, there are two other important
aspects, legal protection and consumer perception.

Technology:
Within the next few months some real improvements will appear in the security of mobile
payment technology platform. When analyzing the security of a mobile payment
transaction, we have to consider three distinct areas: the buyer, the medium between the
buyer and seller.

Security on the buyers side implies security of the access device. Because mobile device
belongs to an individual, it is inherently more secure then a shared device. Solutions such
as PKI (public key infrastructure) and SIM2 (second ID Module) will be introduced to
the market early in 2001,which will significantly improve security for buyers.

Real improvement in the security of the medium between buyer and seller will
occur when 3G networks becomes operational. These 3G networks are based
on technology (already used in current networks in the US, Japan and Korea)
that using complex encoding and decoding algorithms, originally developed
by the military.
On the sellers side, acceptable level of security will also be available in early
2001,when wireless Transport Layer Security (WTLS) will be introduced.
WTLS Is an Encryption technology, which makes sure that everything sent by
the buyer, is received by the seller.

26

Legal issues:
There are two legal issues for mobile payment- customer protection and non-repudiation.
To build consumer confidence, customer protection against fraudulent usage has to be
well established and clear. To introduce new laws, or adjust existing legislation, for a new
payment method takes times, as unanticipated issues can crop up. This is the main nontechnological reason why the security of a payment method improves over time. The
second issue is on-repudiation of a transaction. While accepting credit cards, the seller
uses the buyers signature to prevent repudiation. Legalising digital signatures, as proof
of purchase in the virtual world, will prevent buyers from disputing their online
transactions.

Perception:
The public perception of the security of a new payment medium is less manageable than
the technology and legal aspects, yet can make or break it. Both sender and recipients
must have confidence that the information they transfer will arrive securely and in
confidence. There can be huge differences in the perception of security between different
cultures, which make the issue even more complex and less predictable. For example, in
the US the credit card is perceived as much more secure than in Europe a major reason
that the credit card took much longer to be accepted in Europe, and still is not as
successful there as in the US.

Convenience
Convenience for buyers:

To make mobile payment an attractive substitute for existing payment methods in the
bricks and mortar world requires completely new shopping concepts. For example, to
make mobile payments more convenient than, say, the smart card, the customer should be
27

able to pay wherever he or she is in the shop. In the e-commerce world a shortage of
content is currently the main inconvenience for buyers: both the choice of vendors and
choice of products and services is limited.

Convenience for sellers:

The new shopping concepts required in bricks and mortar if buyers are to make mobile
payments at the sellers end, which may not be sufficiently attractive as yet. An additional
factor, which discourages and seller from investing, is the current lack of standards,
which makes investment very risky. However, industry standards for mobile payment are
now under development, and more are expected in the near future. These standards will
give direction to the (further) development of mobile payment systems. An example of a
recently introduced standard is Electronic Commerce Modeling Language (ECML),
which addresses the issue of general payment protocol combined with the ability for
enders and brands to individualise the mobile e-wallet options they provide for their own
customers.

Security in the WAP Environments:

Just as security continues to be a barrier for Internet purchase and online financial
management, so too is it a foremost concern in a wireless environment. To ensure success
as a transactional device- which is exactly how the latest generation of mobile handsets
are positioned in the industry-security standards will continue to play the leading role in
swaying consumer confidence and downplaying the omnipresent fear of fraud. The
senders and recipient must both have confidence that the information they transfer arise
securely and in confidence.
PKI (public key infrastructure) technology provides a security solution that is superior to
standard SSL in that is protects both the integrity of the data stream in addition to
verifying the participates engaging in a private, confidential transaction. In simplest
terms, PKI involves private and public keys shared between two parties engaging in a
28

secure transaction. A third-party certificate authority signs a third element, the digital
certificate.
In this scenario, if the users handset is equipped with a smart card reader (which is an
increasing trend), the private key could be downloaded from the smart card on to the
mobile phone. This obviates any potential security risk that could be introduced when a
public key is distributed online.
Multi-application relationship cards/smart card are also efficient storage centers for
virtual credit cards, debit cards, and other payment instructions, providing a more tightly
integrated personal device.

The potential for success:

Mobile payment has the potential to become successful as convenient and secure
payment method after the barriers described above have been removed probably over
the next two years. It seems certain that the main security will be overcome by the end of
2001,when new technologies are available and and when the legal issues have been
resolved in most countries.
In the Internet world, selling should take off quite soon after the security issues have been
resolved. At the moment there is a lack of content, but if open standards are established
soon, a lot of start-ups will probably appear to deliver this content. In bricks and mortar
the take-off of mobile payment is expected to be slower, because of the huge investments
required. So most sellers will probably wait until standards are clearly defined and mobile
payment has proved successful in e-commerce.
Introducing the mobile delivery channel into an integrated multi-channel strategy is a
challenge that will have lasting benefits in the future, providing financial institution with
a channel readiness that enables quick repose to emerging consumer trends. As In most
successful initiatives in the worlds of e-commerce and m-commerce, partnership with the
right technology players is critical. These relationships will help to bring the mobile
29

banking channel to maturity, as the solution that best combines convenience, security,
portability, application richness, and the flexibility required to bring new products and
services to market quickly.
As global financial institutions are discovering today, the infrastructure requirements can
be challenging, but not nearly so challenging as tiring to retain banking customers that
are moving into the wireless age, with or without their trusted service providers.

Characteristics of the mobile use

The use of mobile applications underlies several specific restrictions. We consider five
characteristics of the mobile use to be particularly relevant as they greatly influence the
design of mobile banking applications and the suitability of certain technical solutions. A
mobile application is used via a mobile device. For these devices (currently either a
mobile phone or a PDA), special limitations are valid .For the mobile banking context;
30

above all, these are the limited input and display capabilities. The connection is provided
by a mobile network operator (MNO). This is especially important if applications need to
access certain parts of the infrastructure, which are under control of the MNO (e.g. the
SIM card). In the case of negotiations, these have to be pursued with all MNO on the
designated market. The use of mobile data transmission is expensive. In the case of
circuit-switched data transmission.

(E.g. GSMCSD or HSCSD) this extends to the connection time, in the

case of

packet-switched data transmission (e.g.GPRS) this extends to the transferred data

volume.
Sensitive data is transmitted. This implicates the use of adequate security measures. A
disruption of the usage is possible at any time. This is principally already true for
electronic banking as well (the connection may e.g. be disrupted by a breakdown of the
transmission or of the operating system of the client Computer) and provides a special
necessity to avoid incomplete transactions.

General conditions of mobile banking

Electronic banking is one of the most successful business- to-consumer applications in

electronic commerce (EC).
Banks greatly support this not only because they could meet their customers need for
convenience but also because of the enormous economic impacts in replacing a high-cost
channel (bank clerks) through a low-cost channel (a central web server) for simple
31

transactions, with the additional benefit of eliminating the necessity for a media
conversion.
Since users considered their mobile phone as a personal trusted device making it to an
integral part of their lives and more and more of these devices became Internet- enabled,
the regular conclusion was the transformation of banking applications to mobile devices
as the next step of electronic banking development.
For mobile banking, the advantages even go much further than for electronic banking:
The high penetration of mobile phones reaches all social levels; mobile applications
disband the limitations of electronic banking as they allow for a use anytime-anywhere
and the subjective and objective security of the device is higher than that of a personal
computer. Despite all of this, more than four years after the start of the first mobile
banking applications customers simply do not use them and utilization figures stay very
far behind all expectations. Mobile banking as an established channel still seems to be a
distant prospect.

32

DATA ANALYSIS &

INTERPRETATION

DATA ANALYSIS & INTERPRETATION

Data is the very important aspect of a research report because the data is the only thing
from which the analysis and findings could be made; this is the reason why the data is
being collected for the purpose of the research study. The study can be made easier
33

through the collection of data and while collecting it the data can be reformed and
furnished like this so that meaningful information can be withdrawn from it.
The question are framed as according to the respondents, the information gathered
from the questionnaire is being used in the forms of pictorial representation and in tabular
form thus the data representation is done in the form of pie chart, and graphs.

A) Banking point of view :

1) Whether Mobile Banking is more convenient then Traditional
Banking?

34

10%

Yes

30%

No

Not experience

60%

Explanation :
Mobile Banking is more better then Traditional Banking because it offers more
facility like Alert facility,SMS facility and customer can access to their bank blance at
any time.
No,Mobile Banking is not convenient then Traditional Banking as it involve more
formalities and middle class, lower class customers can not affored to Mobile
Banking.
Not yet experience, As some customers are totally unaware of Mobile Banking.
I conclde that, most of the customers of bank are feel thet Mobile Banking is more
convenient.

35

2) According to you, which category of community are relay on

M-Banking?

10%
20%
Bussinessmen

10%

Common

60%
Professional

Other

Explanation :
As per chart, 60% of Businessmen relay on Mobile Banking because, they mostly
involved in stock exchange so they required each and every update of stock market which
the get easily on their mobile by availing Mobile Banking.
Only 10% of common customers of bank are availing Mobile Banking service because
they are interested in depositing and lending of their money in their account.
Professionals like Lawyer, Doctor, Engineers, are availing Mobile Banking only up to
20%.
We conclude that, most of Business customers of bank are using and relay on Mobile
Banking.

36

B) Customers point of view :

1) With which facilities of banking you are most satisfied?

10%

Traditional

40%

10%

Mobile

Internet

40%

Other

Explanation :

As per chart, there is equal percentage for Mobile Banking and Internet Banking because
both offer wide services. Through Mobile Banking customer can chack their account
details on Mobile, whereas in Internet Banking customers have to visit to cyber to check.
On other hand Traditional Banking is a used 10%of customer.
Conclusion is that, Mobile Banking and Internet Banking both are satisfying customers.

37

2) Are you satisfied with the facilities provided in Mobile Banking?

70
60
50
40
30
20
10
0
Yes

No

Can't say

Explanation:
Yes, 70% of customers of bank are satisfied with Mobile Banking because of its latest
facility.
20% of customers are not satisfied because they are not comfortable with formalities of
Mobile Banking.
10% customers have no idea about Mobile Banking so there is no question of
satisfaction.

38

3) Which feature of Mobile Banking you like more?

15%
30%
15%
Flexibility

Time saving

Durability

Accessability

40%

Explanation :
In todays modern world every customer has value of Time, so they acquire latest facility
which is time saving. There is 40% of customers are availing Mobile Banking system for
the sake of time saving.
30% of customers used this facility as flexibility offered by this system, its easy for them
to access any information on mobile like latest updatation of stock market, bank balance
checking, Reminder facility etc. Mobile Banking can be easily accessible and is Durable
in nature.

39

4) Do you feel Mobile Banking is Costlier then other modes of

Banking?

9%

Yes41%

50%
No

Can't say

Explanation :
Yes, Mobile Banking is costlier because this facility is availed by only those customers of
bank, which has,
1) Saving A/C of same bank
2) Demate A/C of same bank
3) Credit card of same bank
So middle class and lower class customers need not to have demate A/C and Credit card
& it also charge for Alert and SMS facility.
Some customers of bank required Mobile Banking and they deal in lakes so they not feel
that Mobile Banking is costlier.
9% of customers are not familiar with Mobile Banking and they are happy with the
Traditional Banking.

40

After taking into account all factors I conclude that Mobile Banking is Costlier.
5) Whether you are facing any problems, while using M-Banking
Systems?

50
45
40
35
30
25
20
15
10
5
0
Yes

No

Can't say

Explanation :

Yes, there is problem in Mobile Banking regarding lack of security, lack of personal
touch, lack of efficiency& some times problem in accessibility.
No, there is no problem in Mobile Banking. Everything is up to the satisfaction level.
I conclude that, in spite of various problems in Mobile Banking is best.

41

6) Would you like to give any suggestions to prevent problems of

M-Banking?

5%

Yes

35%

No

Can't say

60%

Explanation:
Yes, there should be personal touch i.e. instead of sending message, if there is facility that
we can solve our problems with bankers personally. SMS facility is good but need to
grow.
No, there are no suggestions regarding Mobile Banking, as everything is perfect.
Some personnel didnt have knowledge about Mobile Banking so there are no
suggestions from their point of view.
At last I would like to conclude that with some innovations, Mobile Banking can become
popular in middle class and lower class customers.

The reasons for this great disappointment are to be analyzed. Doing so in the following
sections, we do not intend to start with current applications (which could mean biased)
but from scratch, with an analysis of the customer requirements to such applications.
42

Bank A/C holder

80%

Non Bank A/C holder

20%

Percentage number of account holders in city

Sales

Non A/c holders; 20%

A/C Holders; 80%

43

Popular banks of city according to respondents are

Popular banks

SBI & Subsidiary

UBI & Subsidiary
OBC
Others

45%
25%
05%
25%

Popular banks

Other; 25%
SBI & Sub; 45%
OBC; 5%

UBI & sub; 25%

44

Awareness level for Mobile banking in City is

Awareness Level
Aware
Unaware

40%
60%

Awarness Level

Aware; 40%
Unaware; 60%

45

Awareness level for SBI Mobile Banking in city is

SBI Mobile Banking

Aware
Unaware

60%
40%

SBI Mobile Banking

Unaware; 40%
Aware; 60%

46

Percentage number of users of Mobile Banking in city is

Mobile Banking users

User
Non- user

45%
55%

Mobile Banking users

Users; 45%

Non-user; 55%

47

Current preference level for Banking system in city is

Preference

Counter Banking
Internet Banking
Mobile Banking
Cant say

50%
25%
20%
05%

Prefrence
Can't Say; 5%
Mobile Banking; 20%
Counter Banking; 50%

Internet Banking; 25%

48

Helpfulness of Mobile Banking in Profession of the users in city is

Professional helpfulness

Helpful
Unhelpful
Cant say

60%
30%
10%

Professional helpfulness

Cant say; 10%

Unhelpful; 30%
Helpful; 60%

49

Satisfaction level of Mobile Banking in city.

Satisfaction

Satisfied
Dissatisfied
Cant say

80%
15%
05%

Satisfaction
Cant say; 5%
Dissatisfied; 15%

Satisfied; 80%

50

FINDINGS

51

Findings
The following information can be withdrawn from the data collected which has been
shown above in the form of table and pie charts.
1. 80% citizens of city are having a bank account while the rest didnt.
2. 45% citizens of city are associated with State Bank of India and its subsidiaries
for their banking requirements.
3. Only 40% people of the total population of city is aware of Mobile Banking.
4. 60% of the Mobile Banking aware people are known to SBIs Mobile Banking
facility.
5. From people who are aware of Mobile banking only 45% are using it for their
banking needs.
6. The 50% of banking users are still relying on counter banking, 25% of them are
relying on internet banking and only 20% of people are relying on Mobile
banking.
7. 60% of people are agreed that mobile banking is helpful for their profession in
city.
8. 80% people are satisfied with the service which they are getting in SBI Mobile
Banking.

52

LIMITATION

53

Limitation
1. The certain no of people had been contacted for data collection so it cannot be
2.
3.
4.
5.

treated for the whole population.

The respondents can be biased.
Time was the major constraint.
To gather the data from the various sources is difficult task.
Respondent may not take interest in the study.

54

CONCLUSION

Conclusion
55

While analyzing the various aspects of the Mobile Banking of SBI it could be concluded
that the Mobile Banking is getting a greater amount of success which is unique in its
kind. Still some of the fields are yet to be improved and rethink due to which the
organization could improve the performance of its services in delhi city, its utmost
impossible for a pure service based organization like banks to launch a service on a very
greater aspect and The State Bank of India has proved this wrong by its own
performance.
Particularly talking about the Mobile banking in delhi city is one of the major preference
of youngsters they are having almost craze about a facility through which bank could be
managed and accessed through mobile phones only, it has also been the preference of
those professionals who have to travel a lot for their job and cant manage the banking
from counter and through internet. This is worth for the importance given to it in the
delhi city.

56

BIBLIOGRAPHY

BIBLIOGRAPHY
1. Kotler. Philip
57

Marketing Management,
2003 revised edition
2. Compilation of
Service Marketing
provided by DBA.
3. Kothari, C.R.
Research Methodology,2007
1. E-banking: the global perspective Gupta Vivek
2. E-Commerce in Indian banking Bhasin
3. Banking and Finance C.M.Chaudhary
4. IT in Banks - Katury Nageshwara Rao.
5. Visiting HDFC branch at Andheri (west)
4. www.sbi.org
5. www.google.co.in
6. www.wikkipidea.com

58

ANNEXURES

QUESTIONNAIRE
Name

59

E mail .
Age ..
Profession.
A) Banking point of view :

1) Whether Mobile Banking is more convenient then Traditional Banking?

a) Yes

b) No

c) Not yet experience

2) According to you, which category of community are relay on M-Banking?

a) Businessmen b) Common people c) Professional d) Other

B) Customers point of view :

1) With which facilities of banking you are most satisfied?
a) Traditional Banking
b) Internet Banking
c) Mobile Banking
d) Other
2) Are you satisfied with the facilities provided in Mobile Banking?
a) Yes

b) No

c) Not yet experience

3) Which feature of Mobile Banking you like more?

a) Flexibility
b) Time saving
60

c) Durability
d) Easy accessibility
4) Do you feel Mobile Banking is Costlier then other modes of Banking?
a) Yes

b) No

c) Not yet experience

5) Whether you are facing any problems, while using M-Banking Systems?
a) Yes

b) No

c) Not yet experience

6) Would you like to give any suggestions to prevent problems of M-Banking?

a) Yes

b) No

c) No Suggestion

7) What do you think about the Balance Enquiry Facility Provided by Mobile
Banking System?
a. Good
b. Average
c. Poor
8) What do you think about the bill payment services offered by Bank through Mobile
Banking System?
a. Good
b. Average
c. Poor

9) What do you think about the Money transfer facility offered by Mobile Banking
system of Bank?
a. Good
61

b. Average
c. Poor
10) Do you think mobile banking system is safe?
a. Yes
b. No

This questionnaire is for the purpose of data collection for the project report on Mobile
Banking facility in delhi city, for the partial fulfillment of the degree of Bachelor of
Business Administration, of IP University, every of the above mentioned detail would
be confined to me only any information as individual will not be published or made
public.

Arun Dhingra

***************

62