What is Mobile Banking ?

Mobile Banking refers to provision and availment of banking- and financial services with the help of mobile telecommunication devices (mobile phone or Personal Digital Assistant (PDA)). The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information.

SMS was the earliest mobile banking service that was offered. With the revolution in the mobile world by the introduction of the Smart Phones and their rapid penetration all over the world through its affordability have led to increasing development of the special client programs, called apps, which can be downloaded to the mobile devices.

Mobile Banking Business Models:

With the entry of the Mobile devices into the banking arena a wide variety of mobile banking models are evolving. These Models Primarily differ on the question that who will establish the relationship with the end customer, the Bank or the Non-Bank/Telecommunication Company (Telco).

Models of branchless banking can be classified into three broad categories –

Bank Focused

In this a traditional bank uses non-traditional low-cost delivery channels to provide banking services to its existing customers. Examples like ATM’s and limited Mobile Services like SMS.

Bank-Led

This model offers a distinct alternative to conventional branch-based banking in that customer conducts financial transactions at a whole range of retail agents (or through mobile phone) instead of at bank branches or through bank employees. By this Bank substantially increase the financial services outreach by using a different delivery channel at significantly cheaper cost than the bank-based alternatives

Nonbank-Led. In this Bank had a Limited role in the day-to-day activities. All the Account Management activities will be taken care by a non-bank (e.g. telco) who has direct contact with individual customers.

Mobile Banking Services:

Mobile banking can offer services such as the following:

Account information

1.     Mini-statements and checking of account history

2.     Alerts on account activity or passing of set thresholds

3.     Monitoring of term deposits

4.     Access to loan statements

5.     Access to card statements.

Payments, deposits, withdrawals, and transfers

1.     Domestic and international fund transfers

2.     Micro-payment handling

3.     Mobile recharging

4.     Commercial payment processing.