The Hindu Business Line : `On cusp of change'

Talk to technology companies and they paint a futuristic scenario. What is the situation at the ground level - at the banks? What is possible for their customers to do now? And what is next on their agenda?

eWorld posed these questions to ICICI Bank and HDFC Bank who are leading players in this space.

This is what Rahul Bhagat, Executive Vice-President - Retail Banking, HDFC Bank, had to say on the current scenario.

The Mobile phone represents the convergence instrument of the future, he says. Only a few banks in the country currently offer mobile banking. It is still being used only for basic enquiry transactions — balance enquiry, chequebook requests and the like.

A number of development applications are being worked on which will facilitate greater mobile-commerce in the immediate future. What you can do on the Net — in terms of e-commerce — of buying goods and services on the Net - can soon be done on the mobile also.

Usage of mobile banking is still small — relative to other channels. But if we rewind to the situation about 6-7 years ago, Net banking was considered futuristic then, he says. And the revenues that came in through that channel may not have justified the investment at that point of time.

But today, Net banking is the fastest growing channel — not merely in the metros but in Tier-II and Tier-III cities.

Mobile penetration is very high — has exceeded landline connections. It has the potential to rival the Net as the most popular channel given the density/penetration of mobiles. It is also the convenience factor: when you use the mobile, there is no need to remember numbers. Technology facilitates usage that is beyond mere voice. You start using it from a data perspective.

HDFC Bank has moved from a syntax-based offering (where you had to type out a request and send it to an identified number), to a Menu-based offering on your mobile. This has increased the usage — both the number of people using it as well as the number of transactions, he says.

It is technically possible to have payment and money transfer options, but that is not being done right now. It is still undergoing development and testing and refining in terms of security aspects. Theoretically, it is possible for your card details to be stored or embedded in a chip on your phone — this can help you swipe your phone like your card and pay for transactions.

Greater usage depends on 1. Awareness 2. Comfort 3. Convenience. Consumer behaviour takes some time to adapt to any change. Once it is demonstrated that the offering is simple, safe and convenient, consumers shift.

Greater deployment of this technology and ramping up of usage could happen in less than two years from now. "We are on the cusp of that change," he says. GPRS costs, phone costs, service costs are all coming down and this should help volumes kick in.

`Convenient channel'

Mobile Banking acts as a convenient channel for accessing banking facilities, says Maninder Singh Juneja, General Manager and Head of Retail Liabilities of ICICI Bank.

What is happening at the bank's end?

Juneja says the ICICI Bank Mobile Banking Requests facility enables a customer to query for his/her account Savings Account: Balance Enquiry, Cheque Status Enquiry, Cheque Book Request, Last three Transactions, Cheque Book Request, View Presented Bills, Bill Payment, Request for various ICICI Bank Products.

ICICI Bank customers can also use the following Value Added Services:

Prepaid Mobile Recharge, Railway Ticket booking through IRCTC and Funds Transfer within ICICI Bank Account(s).

What is the next level of development in this field for banks?

Says Juneja, "The ubiquity and utility of the mobile device promises to change the way consumers use cash and interact with service providers. Applications on the mobile device can provide secure storage for data".

Remote payment systems will allow consumers to use their mobile device like a wallet to shop with service providers or send and receive money on a person-to-person basis - with cash, debit/credit card and bank account functions built-in. These services will require to be made highly secure, integrated with banks and completely independent of mobile operators, he says.

The next major development would be proximity payment using mobile devices, where consumers can simply wave their devices over a sensor and the transaction is completed on the spot.

For service providers, proximity payment will enable consumers to pay quickly and easily at the Point of Sale (PoS). On a mobile device, there are several wireless technologies or platforms that can deliver proximity functionality, including infrared, Bluetooth and RFID.

What are the problems that are a hurdle to greater m-commerce?

According to Juneja, there are a few challenges to be tackled before m-Commerce in India becomes successful.

The majority of the market is on a very simple SMS-based system (the lowest common level of technology); for the customer to have an enriching experience, he/she will require a GPRS connection. GPRS connection costs are a major challenge for m-Commerce.

The next is the availability of services with high practicality such as utility bill payments and ticketing services such as movie, travel tickets, etc.

The awareness and comfort level of mobile payments can be raised with encouraging government action such as robust policies and laws, he says.

And last, by replacing cash-based payments with contact-less payment, service providers must provide consumers with as wide a range of payment options as possible - one of these could be mobile payment.

vageesh@thehindu.co.in

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