Indian Institute of Technology, Roorkee 

Awareness of Mobile Banking Applications

Guided by: Dr. Jogendra Kumar Nayak

Conducted by: 

Shivam Jindal - 15118079

Atin Modi - 15312009
Pranjal Tale - 15312021
Abhay Kumar - 15312001
Mahaveer Soni - 15312016
Shahil Barnwal - 15312024

 
 
 

Contents

1. Abstract
2. Background
2.1. Mobile banking
2.2. Mobile banking applications
3. Introduction
4. Research Design
4.1. Development of measurement
4.2. Sample Characteristics
5. Data Analysis
5.1. Preprocessing
5.2. Reliability and Validity
5.3. Cluster analysis on basis of Awareness
5.4. One way Anova
5.4.1. Awareness vs. Gender
5.4.2. Awareness vs. Qualification
5.4.3. Awareness vs. Age
5.4.4. Awareness vs. ​Region
5.4.5. Awareness (cluster) vs. Total usage
5.4.6. Awareness (cluster) vs. Permission reaction
5.4.7. Awareness vs. ​Banks
5.5. Future of ​Mobile Banking
6. Conclusion
7. References

 
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1. Abstract

Mobile banking is the most efficient and commonly used platform to deal with
transactions online . It is far better than the traditional methods using ATM or banks.Still
the power of this technology is far from being full used due to several reasons. This
paper deals with the study of awareness of Mobile banking applications and how the
awareness varies with different parameters . It also proposes views of people on the
current scenario in mobile banking and what can be done to improve the effective use of
this technology.

2. Background

2.1. Mobile banking

Mobile banking is a service provided by a bank that allows its customers to conduct
transactions using mobile devices such as smartphone . The earliest mobile banking
services used ​SMS​, a service known as ​SMS banking​. With the introduction of ​smart
phones​ the first European banks started to offer mobile banking on this platform to their
customers.Mobile banking before 2010 was most often performed via SMS. The rapid
growth of phones have led to increasing use of special mobile apps, downloaded to the
mobile device.Mobile banking is used in many parts of the world because it requires
little or no infrastructure. Despite of being so advantageous to human life, according to
the 2017 Oracle J.D. Power India 'Retail Banking Study over 90% Indian customers still
prefer branch over online banking.Among the 48 per cent of customers who have yet to
download a banking app, one-fourth state lack of security is a key reason for non-usage.

2.1. Mobile banking Applications 

 
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Unlike internet banking , mobile banking uses the platform of softwares called
applications or apps . There are plenty of mobile apps by various organisations . Even
some banks have their own apps . These apps provide you the features like balance
enquiry , fund transfer , bill payment etc very conveniently .There are many mobile
banking applications , most popular include.

1. SBI - state bank anywhere

2. BHIM
3. Tez
4. PhonePe
5. Mobikwik

Despite being availability of so many applications, mobile banking is still not used up to
the full extent.

3. Introduction

Mobile banking have many advantages. But how many of us are actually aware of
mobile banking ? The report contain analysis of this question.

Being able to access financial records anytime , anywhere makes mobile banking
appealing. You can check deposits , notice fund transfers and monitor transaction
history .All these options are monitored with a security feature.

“The more you monitor your account , the safer you are ”, says Van Dyke.

Feature and advantages of mobile banking :

1. Transfer of money is very easy , not like the traditional method which take time
for the transaction and ask many details .

 
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2. Mobile banking is available almost 24 hour a day . You need not to wait for the
banks to open and wait for hours .
3. Mobile banking is secure . All reputable banks use encryption that safeguard and
protects your privacy , identity and your financial information.

The problem is still major amount of population are not using this method to do their
work. Rather they are choosing the conventional approach.

The study aims at analyzing the user awareness regarding mobile banking applications
and how it varies with factors like age, qualification, gender, region and usage.

What next?
We also intend to find out what people expect from the mobile banking applications and
what are the reason that people are not using these apps in the current scenario.

4. Research design - ​Exploratory

4.1. Development of measurement

The source of data is primary and it was collected with the help of an questionnaire
which consisted of total 16 questions. They can be broadly classified as:

Category Labe Question Type Remark

l

Demograph Q1. Name String

ic
Q2. Gender Boolean Nominal

Q3. Age Continuous Scale

Q4. Qualification Multiple Choice Ordinal

Q5. Region String Nominal

Usage of Q7. Application usage Boolean Nominal

 
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application Q8. Apps used Checkbox Multiple Nominal

s vars

Q9. Usage​ frequency Multiple Choice Ordinal

Q10. Transaction amount Multiple Choice Ordinal

Q11. Bank account Multiple Choice Nominal

Usage Q1​2​. Reasons for using Checkbox Multiple Nominal

Reaction applications vars

Q1​3​. Benefits Multiple Choice Likert scale

Q14. Views Multiple Choice Likert Scale

What’s Q1​5. Services available ​in Checkbox Nominal

future future

Q16. Improvement Checkbox Nominal

4.1.1 Table: Classification of questions in Questionnaire

The questionnaire used clear and precise language understandable to respondents with
no prior technical knowledge ​of mobile banking applications​. It was checked for
ambiguities and general feedback from the public was taken regarding the initial
blueprint of the questionnaire.

4.2 Sample Characteristics

Sampling Technique Convenience sampling

Sampling Technique Type Non - Probabilistic

Mode of Survey Online (​103​) + Interview based (​10​)

 
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4.2.1 Table: Sampling technique

The online responses were collected from college students as well as recently
graduated students across India. Also offline responses were taken from PG/PHD
people in the campus and from random people outside the campus. Initially, the data
had been collected from 1​13​ respondents. During the filtering process ​10​ entries
(1​1​.​3​%) were found to be ineligible for the study.

S.N. Category Information

1 Age μ : ​20.620690 σ : ​3.776431

years years

2 Gender Male :​ 82.8​% Female : ​17.2​%

3 Qualification 12th Pass : 65% Graduate : PG / PHD :

29.1% 5.9%

4.2.2 Table: Characteristics of sample

5. Data Analysis

5.1 Preprocessing

● Raw data from Google forms was preprocessed.

● Values of variables with discrete levels were encoded.
● Applications used​ was converted to count.
● Answer of Q1​3​ and Q1​4​ were coded to the extent up to ​the sum of registered
value of all options ​on multiple corr​ect ​choices.
● Then the responses of Q1​3​-Q1​4​ were normalized.
● Responses of Q​8​ and Q​12​ were converted to multiple Boolean factors
corresponding to each choice (checkbox).

5.2 Reliability and Validity

 
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Basic reliability and validity of measures were tested in two major stages: general
reliability analysis and factor analysis. To test the validity of variables, factor analysis
was performed using principal component extraction method with Varimax rotation
option. As a result, 2 factors were extracted that described the user awareness and
usage. Also internal consistency was assessed by computing Cronbach’s alpha score.

5.3 Cluster Analysis on basis of Awareness

The users were classified in two clusters (K-Means Clustering) on the basis of the
awareness of Mobile banking applications.

5.3.1 Figure: Cluster Centers

This gave us the insight that about distribution of respondents among these clusters.

 
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5.3.2 Table: Anova and cluster cases

Conclusion of cluster analysis was that each of the input variables has a very significant
role in deduction of awareness, and the data is spread as ​59.7​% aware and ​40.22​%
was not aware of ​mobile banking applications​.

5.4 One Way Anova

5.4.1 Awareness vs. Gender

Null Hypothesis H​​0​:​ Awareness and gender are independent of each other.

Alternate Hypothesis H​​a ​: Awareness is dependent on gender.

 
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Since significance p-value = .​581​ > .05, thus H​0 is

​ accepted and H​a​ is rejected. Thus the
awareness is not statistically significantly different between genders.

5.4.2 ​Awareness vs. Qualification

Null Hypothesis H​​0​​: Awareness and qualification are independent of each other.

Alternate Hypothesis H​​a :​ Awareness is dependent on qualification.

Since significance p-value = .​438>​ .0​5​, thus H​0 is

​ ​accepted​ and H​a is
​ ​rejected​. Thus,
statistically significant difference in awareness does not exists between different
qualification groups​.

5.4.3 ​Awareness vs. Age

Null Hypothesis H​​0​​: Awareness and age are independent of each other.
 
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Alternate Hypothesis H​​a​​ ​: Awareness is dependent on ag e.

Since significance p-value = .​199>0.05​, thus H​0 is

​ ​accepted​ and H​a​ is ​rejected​. ​Thus,
statistically significant difference in awareness does not exists between different age
groups.

5.4.4​ Awareness vs. Region

Null Hypothesis H​​0​:​ Awareness and ​region ​are independent of each other.

Alternate Hypothesis H​​a :​ Awareness is dependent on ​region​.

Since significance p-value = .​813>0.05​, thus H​0 is

​ ​accepted​ and H​a​ is ​rejected. Thus,
statistically significant difference in awareness does not exists between different
regions.

 
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5.4.5 ​Awareness (cluster group) vs. Total Usage

Null Hypothesis H​​0​:​​ ​ Awareness and total usage are independent of each other.

Alternate Hypothesis H​​a​​ :​ Awareness is dependent on total usage.

Since significance p-value = .​001<​.05, thus H​0 ​is ​rejected​ and H​a​ is ​accepted​ at 0.05
level of significance.​Thus there is a statistically significant difference in awareness

about mobile banking applications between groups having different frequency of usage
of the mobile banking apps.

5.4.6 ​Awareness (cluster group) vs. Usage Reaction

Null Hypothesis H​​0​:​​ ​ Awareness and ​usage​ reaction are independent of each other.

Alternate Hypothesis H​​a​​ ​: Awareness is dependent on ​usage​ reaction.

 
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Since significance p-value = .0​27​<.0​5​, thus H​0 ​is rejected and H​a​ is accepted at 0.0​5
level of significance. Hence, awareness depends on ​usage​ to reaction.

5.4.7 ​Awareness vs. Banks

Null Hypothesis H​​0​:​​ ​ Awareness and bank are independent of each other.

Alternate Hypothesis H​​a​​ :​ Awareness is dependent on bank.

All measurements are done at 0.05 level of significance.

Cross tables showed that ​68​% of respondents ​who have accounts in SBI​ and ​19​% of
respondents ​who have accounts in PNB are more aware of mobile banking applications​.
Whereas these numbers were significantly lower in ​other banks​. Also since 0​.024<0.05
banks​ have a direct relationship with awareness.

 
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5.5 Future of mobile banking

Q16 was put up to get feedback on what all things user feels that can be changed
about, with the following options
1. Cash withdrawal at mobile money agents.
2. Salary deposit.
3. Loans.

The study revealed that 70.8% of total respondents preferred giving cash withdrawal at
mobile money agents over the traditional method. So this can be the new addition to the
mobile banking applications, making it more usable.

6. Discussion

The study reveals that the awareness of ​Mobile Banking Applications​ is not significantly
dependent on gender which is what is to be expected in today’s modern world. The
study also reveals that ​there is no significant relationship between age and awareness.
H​owever the new generation ​is​ ​usually​ more aware of new technologies as compared to
the age group of 35 or above ​but the study shows a complete different output. As most

 
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of the data samples belong to the same age group, the reason for this relation can be
understood. ​ Next, the study reveals ​that there is no close​ relationship between
awareness and qualification. The same​ reason can be thought for this as well.​ The
technical exposure significantly determines the awareness as awareness directly
increases with ove​rall usage and frequency of usage​. Large proportion of unaware
respondents tends to ​use cash for all types of transaction or use applications without
knowing the risks involved and the benefits offered ​while most of the aware respondents
choose to​ use various applications for different purposes​. The awareness depends on
the usage reaction​ ​of t​he​ application​s as well​. The awareness also depends on the
B​ank​s. It is observed from the data that clients of some banks are more aware about
Mobile Banking Applications than others which may be because of the promotion
activities of different banks.

Most of the respondents, even the ones who don’t use mobile banking applications on
regular basis, don’t consider it to be a costly alternative. Many respondent don’t feel the
need of using the applications in most of the cases. ​Thus, a large proportion of people
keep using these applications without being fully aware or concerned​ about the risks
involved and the features offered by different applications and there are many people
who prefer cash transactions​.

7. Conclusion
The study concluded that the awareness of ​Mobile banking ​is quite low in some
fragments of population (categorized on basis of age, qualification, knowledge, etc.).
The large sections of people who are ignorant and don​’t ​have much trust in ​mobile
banking ​applications to ​pay and transfer funds​. Proper measures need to be taken to
tackle this ​and make people more aware about mobile banking and make them use
more frequently​. Also changes need to be made to meet the demand of the people who
are in fact aware ​about mobile banking apps but don’t feel that comfortable in using that​.

 
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8. References
[1] ​“Mobile banking “ ​https://en.wikipedia.org/wiki/Mobile_banking

[2] ​http://www.itavisen.no/237581/verdens-forste-wap-bank-fra-norge

[3]​” Top 10 mobile banking apps 2016 “

http://www.kuchjano.com/blog/mobile-banking-apps-download-for-smartphone/

[4] ​“5 reasons to use mobile banking “

http://www.bankrate.com/banking/checking/5-reasons-to-use-mobile-banking/

[5] “Current use of Mobile Banking””

https://www.federalreserve.gov/econresdata/mobile-devices/2012-current-use-mobile-b
anking-payments.htm

[6] Key Pousttchi, Martin Schurig, "Assessment of Today's Mobile Banking Applications
from the View of Customer Requirements", hicss, vol. 7, pp.70184a, Proceedings of the
37th Annual Hawaii International Conference on System Sciences (HICSS'04) - Track 7,
2004, p. 5-6.

[7] Barnes, S.J. and Corbitt, B. (2003) Mobile banking: Concept and Potential.
International Journal of Mobile Communications. Vol. 1 (3).

 
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