Mobile banking has finally arrived in urban and semi-urban areas. About 90 per cent of the users of mobile banking are from these regions, according to findings of a study conducted by the Institute for Development and Research in Banking Technology (IDRBT), an arm of the Reserve Bank of India.

Mobile banking is now seen as tool for convenience by many. While only 50 per cent have used mobile banking to transfer money, 95 per cent of users have used it just to check balance in their accounts, says the sample study.

The findings are based on responses from the participants who have bank accounts and are residing in district headquarters, sub-districts (mandals) and villages.

Challenges faced

For better penetration of mobile banking, there are challenges such as connectivity issues, mindset issues – especially the preference to visit branch for completion of a transaction – and also lack of awareness about mobile banking in rural areas.

Heavy fragmentation of mobile handset hardware and operating systems, small ecosystem of buyers and sellers in any single payment/wallet solution have also been identified.

Customised solutions

There is a need for banks to consider offering devices customised to facilitate mobile banking. They may negotiate with service providers so that there on connectivity charges for mobile internet or talk time related when undertaking banking operations, the study suggested.

For the purpose of comparison, 43 mobile solutions across developed, developing and underdeveloped countries have been evaluated and it has been found that China is the world leader in terms of both amount transferred over mobile phones as well as transaction volume.

The success of mobile banking is generally attributed to wide spread use of smartphones, high penetration of 3G and 4G technologies and low fragmentation of mobile platforms.

“India needs to innovate to consolidate the complex matrix of m-commerce, m-wallet players, banks, customer and telcos,” the study said.

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