Mobile banking in India does not need a one-size-fits-all solution

Mobile banking is a new generation platform available to customers for conducting balance inquiries, account transactions, utility payments, and other banking activities using a mobile handset. Mobile banking services in India started with SMS banking way back in 2002. With an increasing mobile subscriber base in India, mobile banking has picked up steam in recent years.

Today more than half the population in India has a mobile phone. However, less than 1% of that uses mobile phone as a medium for banking. Though mobile banking is synonymous with the word convenience banking, its usage is not anywhere close to its potential.

With the advent of smartphones and ever growing usage of internet on mobile handsets, application based banking has emerged as a new concept within this space. Other than SMS banking, banks are now offering banking services on mobile handsets through WAP-based internet websites and application based mobile banking services.

However, despite efforts made by Indian banks to expand the scope and usage of mobile channels, there are very few consumers who are actively using the same. Some of the reasons contributing to this include the lack of adoption of mobile as a channel for banking despite the push, limitations of services on mobile banking, non-replication of mobile banking services in varied languages in India, etc.

Now, banks have started offering mobile banking services through another innovative method called USSD.  This platform works on menu-based banking model on mobile handsets where users can perform mobile banking services by recalling the menu and simply dialing a number. Greater acceptability and usage of users are yet to reach a critical mass.

With the RBI relaxing the limit on the value of mobile-based transactions from `50, 000 per day to any limit and allowing non- banks to offer banking services as business correspondents appointed by banks, the focus is to drive banking services in rural areas where a large population is still devoid of banking facilities. This will also allow banks and non-banks to offer payment solutions using a mobile phone with the development of near field communication, barcode and sound wave technologies. This will help us reach the goal of financial inclusion in India.

With these technologies in place, banking on mobile handsets should lead to more transactions on the move as increased reach and last mile connectivity is better achieved via mobiles compared to traditional banking channels like branches and ATMs.

Innovations like IMPS are evolving by the day and once the medium gains higher acceptability, the number of transactions will grow exponentially. In an environment which has surfeit of advanced technology  and mobile handset capabilities , one size fits all kind of a solution does not work. Therefore, banks need to make investments to offer mobile banking services to cater to various mobile / tablet platforms like IOS, Android, Windows, BlackBerry which are available on high-end phones / tablet platforms with good processing capabilities while at the same time offer services to the low-end segment having java based phones with limited data processing capabilities.

Mobile-based payments and the commerce eco-system is still at a nascent stage and hence, acceptance among merchants and customers is currently low but is bound to increase over a period of time.

The writer is executive vice-president,Kotak Mahindra Bank.
 
Disclaimer: The views expressed in the article are personal and do not reflect the views of Kotak Mahindra Bank Ltd