Mobile banking
Part of a series on financial services |
Banking |
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Mobile banking is a service provided by a
Transactions through mobile banking depend on the features of the mobile banking app provided and typically includes obtaining account balances and lists of latest transactions,
From the bank's point of view, mobile banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit transactions. Mobile banking does not handle transactions involving cash, and a customer needs to visit an ATM or bank branch for cash withdrawals or deposits. Many apps now have a remote deposit option; using the device's camera to digitally transmit cheques to their financial institution.
Mobile banking differs from mobile payments, which involves the use of a mobile device to pay for goods or services either at the point of sale or remotely,[2] analogously to the use of a debit or credit card to effect an EFTPOS payment.
History
The earliest mobile banking services used
Mobile banking before 2010 was most often performed via SMS or the
A recent study (May 2012) by Mapa Research suggests that over a third of banks[5] have mobile device detection upon visiting the banks' main website. A number of things can happen on mobile detection such as redirecting to an app store, redirection to a mobile banking specific website or providing a menu of mobile banking options for the user to choose from.
Concept
In one academic model,[6] mobile banking is defined as:
Mobile Banking refers to provision and availment of banking- and financial services with the help of mobile telecommunication devices.The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customised information."
According to this model mobile banking can be said to consist of three inter-related concepts:
- Mobile accounting
- Mobile financial information services
Most services in the categories designated
Mobile banking may also be used to help in business situations as well as for financial situation
Mobile banking services
Typical mobile banking services may include:
Account information
- Mini-statements and checking of account history
- Alerts on account activity or passing of set thresholds
- Monitoring of term deposits
- Access to loan statements
- Access to card statements
- Mutual funds / equity statements
- Insurance policy management
Transaction
- Funds transfers between the customer's linked accounts
- Paying third parties, including fund transfers(see, e.g., FAST)
- Check Remote Deposit
Investments
- Portfolio management services
- Real-time stock
Support
- Status of requests for credit, including mortgage approval, and insurance coverage
- Check (cheque) book and card requests
- Exchange of data messages and email, including complaint submission and tracking
- ATM Location
- Loan Application
Content services
- General information such as finance related news
- Loyalty-related offers
A report by the US Federal Reserve (March 2012) found that 21 percent of mobile phone owners had used mobile banking in the past 12 months.[7] Based on a survey conducted by Forrester, mobile banking will be attractive mainly to the younger, more "tech-savvy" customer segment. A third of mobile phone users say that they may consider performing some kind of financial transaction through their mobile phone. But most of the users are interested in performing basic transactions such as querying for account balance and making bill.
Challenges
Key challenges in developing a sophisticated mobile banking application are :
Handset accessibility
There are a large number of different mobile phone devices and it is a big challenge for banks to offer a mobile banking solution[
Initial interoperability issues however have been localized, with countries like India using portals like "R-World" to enable the limitations of low end java based phones, while focus on areas such as South Africa have defaulted to the
The desire for interoperability is largely dependent on the banks themselves, where installed applications(Java based or native) provide better security, are easier to use and allow development of more complex capabilities similar to those of internet banking while SMS can provide the basics but becomes difficult to operate with more complex transactions.
There is a myth that there is a challenge of interoperability between mobile banking applications due to perceived lack of common technology standards for mobile banking. In practice it is too early in the service lifecycle for interoperability to be addressed within an individual country, as very few countries have more than one mobile banking service provider. In practice, banking interfaces are well defined and money movements between banks follow the IS0-8583 standard. As mobile banking matures, money movements between service providers will naturally adopt the same standards as in the banking world.
In January 2009, Mobile Marketing Association (MMA) Banking Sub-Committee, chaired by CellTrust and VeriSign Inc., published the Mobile Banking Overview for financial institutions in which it discussed the advantages and disadvantages of Mobile Channel Platforms such as Short Message Services (SMS), Mobile Web, Mobile Client Applications, SMS with Mobile Web and Secure SMS.[8]
Security
As with most internet-connected devices, as well as mobile-telephony devices, cybercrime rates are escalating year-on-year. The types of cybercrimes which may affect mobile-banking might range from unauthorized use while the owner is using the mobile banking, to remote-hacking, or even jamming or interference via the internet or telephone network data streams. This is demonstrated by the malware called SMSZombie.A, which infected Chinese Android devices. It was embedded in wallpaper apps and installed itself so it can exploit the weaknesses of China Mobile SMS Payment system, stealing banks credit card numbers and information linked to financial transactions.[9] A malware discovered recently was the Trojan called Bankbot. It went past Google's protections in its Android app marketplace and targeted mobile banking customers on Android devices worldwide before its removal by Google in September 2017.[10]
In the banking world, currency rates may change by the millisecond. Security of financial transactions, being executed from some remote location and transmission of financial information over the air, are the most complicated challenges that need to be addressed jointly by mobile application developers, wireless network service providers and the banks' IT departments.[citation needed]
Scalability and reliability
Another challenge for the
Application distribution
Due to the nature of the connectivity between bank and its customers, it would be impractical to expect customers to regularly visit banks or connect to a web site for regular upgrade of their mobile banking application. It will be expected that the mobile application itself check the upgrades and updates and download necessary patches (so called "Over The Air" updates). However, there could be many issues to implement this approach such as upgrade / synchronization of other dependent components.
Studies have shown that a huge concerning factor of having mobile banking more widely used, is a banking customer's unwillingness to adapt. Many consumers, whether they are misinformed or not, do not want to begin using mobile banking for several reasons. These can include the learning curve associated with new technology, having fears about possible security compromises, just simply not wanting to start using technology, etc.
Personalization
It would be expected from the mobile application to support personalization such as:
- Preferred Language
- Date / Time format
- Amount format
- Default transactions
- Standard Beneficiary list
- Alerts
Mobile banking in the world
This is a list of countries by mobile banking usage as measured by the percentage of people who had non-SMS mobile banking transactions in the previous three months. The data is sourced from Bain, Research Now and Bain along with GMI NPS surveys in 2012.[12][13]
Rank | Country/Territory | Usage in 2012 |
---|---|---|
1 | South Korea | 47% |
2 | China | 42% |
3 | Hong Kong | 41% |
4 | Singapore | 38% |
5 | India | 37% |
6 | Spain | 34% |
7 | United States | 32% |
8 | Mexico | 30% |
9 | Australia | 27% |
10 | France | 26% |
11 | United Kingdom | 26% |
12 | Thailand | 24% |
13 | Canada | 22% |
14 | Germany | 14% |
15 | Pakistan | 9% |
African nations such as Kenya would rank highly if SMS mobile banking were included in the above list. Kenya has 38% of the population as subscribers to M-Pesa as of 2011.[14] Though as of 2016 mobile banking applications have seen a tremendous growth in Kenyan banking sector who have capitalised on android play store and apple store to put their applications. Kenyan banks like Equity Bank Kenya Limited Eazzy banking application and The Co-operative Bank Mco-op cash application have proved to be a success mobile banking applications.
Mobile banking is used in many parts of the world with little or no infrastructure, especially remote and rural areas. This aspect of mobile commerce is also popular in countries where most of their population is unbanked. In most of these places, banks can only be found in big cities, and customers have to travel hundreds of miles to the nearest bank.
In Iran, banks such as
In a year of 2010, mobile banking users soared over 100 percent in Kenya, China, Brazil and United States with 200 percent, 150 percent, 110 percent and 100 percent respectively.[16]
In November 2017, the State Bank of India launched an integrated banking platform in India called YONO offering conventional banking functions but also payment services for things such as online shopping, travel planning, taxi booking or online education.[21]
In January 2019, the German
Following is a list showing the share of people using mobile banking apps during the last three months in selected countries worldwide in 2014. The list is based on a survey conducted by
Rank | Country/Territory | Usage in 2014 |
---|---|---|
1 | Indonesia | 77% |
2 | China | 73% |
3 | Thailand | 64% |
4 | India | 59% |
5 | Singapore | 58% |
6 | Poland | 58% |
7 | Malaysia | 54% |
8 | Hong Kong | 49% |
9 | Australia | 47% |
10 | Mexico | 45% |
11 | Spain | 44% |
12 | United States | 43% |
13 | Italy | 42% |
14 | United Kingdom | 41% |
15 | Brazil | 39% |
16 | Canada | 34% |
17 | Portugal | 31% |
18 | France | 30% |
19 | Belgium | 27% |
20 | Germany | 21% |
21 | Japan | 19% |
See also
- Contactless payment
- Direct bank
- Digital currency
- List of countries by mobile banking usage
- Mobile content
- Mobile Marketing
- Mobile payments
- Online banking
- Digital Wallet
- SMS Banking
- Telephone banking
Notes
- ^ BBVA. Mobile Banking. Centro de Innovación BBVA. p. 22.
- ^ KPMG "Monetizing Mobile" July 2011
- ^ "The World's first WAP Bank is Norwegian". itavisen.no. 24 September 1999. Archived from the original on 4 May 2011. Retrieved 18 October 2010.
- ISBN 9788132222194.
- ^ "A third of banks have mobile detection". Mapa Research. 16 May 2012. Archived from the original on 28 January 2013. Retrieved 16 May 2012.
- ^ Tiwari 73-74
- ^ Federal Reserve Board, "Consumers and Mobile Financial Services," March 2012
- ^ "Archived copy" (PDF). Archived from the original (PDF) on 27 November 2010. Retrieved 9 September 2010.
{{cite web}}
: CS1 maint: archived copy as title (link) - ISBN 9781466688414.
- ^ Palmer, Danny. "BankBot Android malware sneaks into the Google Play Store – for the third time | ZDNet". ZDNet. Retrieved 3 October 2018.
- ^ [1], Mobile payments
- ^ "Countries With the Most 4G Mobile Users: Top 10 Nations – Bloomberg". bloomberg.com. Retrieved 29 April 2014.
- ^ "Mapping out the world's LTE coverage (It's in fewer places than you think)—Tech News and Analysis". gigaom.com. Retrieved 29 April 2014.
- ^ "Celebrating 9 years of changing lives". Safaricom. 10 August 2010. Retrieved 31 March 2019.
- ^ Friedman, Thomas (2 November 2010). "Do Believe the Hype". The New York Times.
- ^ "Mobile Banking surges as Emerging Markets embrace mobile finance". Cellular News. 12 May 2011. Archived from the original on 24 June 2018.
- ^ "Mobile Banking Industry Research". 21 November 2023.
- ^ "Over 5 Million Use Mobile Banking in Nepal". Khalti Digital Wallet. 6 November 2018. Retrieved 6 November 2018.
- ^ "Nepal Rastra Bank Monthly Statistics" (PDF). Nepal Rastra Bank. 6 November 2018. Retrieved 6 November 2018.
- ^ "Paym overview". Payments Council. Retrieved 21 April 2014.
- ^ "SBI launches YONO, an integrated app for financial services". The Hindu Business Line. 23 November 2017. Retrieved 24 November 2017.
- ^ Smith, Oliver (10 January 2019). "With A$2.7 Billion Valuation, N26 Overtakes Revolut As Europe's Most Valuable Mobile Bank". Forbes. Retrieved 7 February 2019.
- ^ Dillet, Romain (9 January 2019). "Banking startup N26 raises $300 million at $2.7 billion valuation". TechCrunch. Retrieved 7 February 2019.
- ^ "Usage of mobile banking apps worldwide in 2014, by country". Statista. Retrieved 1 September 2018.
References
- Vaidya (2011): "Emerging Trends on Functional Utilization of Mobile Banking in Developed Markets in Next 3–4 Years"
- Tiwari, Rajnish and Buse, Stephan(2007): The Mobile Commerce Prospects: A Strategic Analysis of Opportunities in the Banking Sector, Hamburg University Press (E-Book as PDF to be downloaded)
- Tiwari, Rajnish; Buse, Stephan and Herstatt, Cornelius (2007): Mobile Services in Banking Sector: The Role of Innovative Business Solutions in Generating Competitive Advantage, in: Proceedings of the International Research Conference on Quality, Innovation and Knowledge Management, New Delhi, pp. 886–894.
- Tiwari, Rajnish; Buse, Stephan and Herstatt, Cornelius (2006): Customer on the Move: Strategic Implications of Mobile Banking for Banks and Financial Enterprises, in: CEC/EEE 2006, Proceedings of the 8th IEEE International Conference on E-Commerce Technology and The 3rd IEEE International Conference on Enterprise Computing, E-Commerce, and E-Services (CEC/EEE'06), San Francisco, pp. 522–529.
- Tiwari, Rajnish; Buse, Stephan and Herstatt, Cornelius (2006): Mobile Banking as Business Strategy: Impact of Mobile Technologies on Customer Behaviour and its Implications for Banks, in: Technology Management for the Global Future – Proceedings of PICMET '06.
- Owens, John and Anna Bantug-Herrera (2006): Catching the Technology Wave: Mobile Phone Banking and Text-A-Payment in the Philippines
- Ovum Analyst Research, European Retail Banking Investment Strategies (2013): [2]
- The Himalayan Times: http://www.thehimalayantimes.com/fullNews.php?headline=Dollar+at+historic+high&NewsID=381744 Archived 1 July 2017 at the Wayback Machine