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 ABSTRACT

This paper describes the basic concepts, services offered,

market survey and technology which enables Mobile Banking.
Over the last few years, the mobile and wireless market has
been one of the fastest growing markets in the world and it is
still growing at a rapid pace. This opens up huge markets for
financial institutions interested in offering value added services.
With mobile technology, banks can offer a wide range of
services to their customers such as doing funds transfer while
traveling, receiving online updates of stock price or even
performing stock trading while being stuck in traffic.
Mobile devices, especially smart-phones, are the most
promising way to reach the masses and to create stickiness
among current customers, due to their ability to provide
services anytime, anywhere, with high rate of penetration and
potential to grow.

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 Introduction to Mobile Banking

Internet Banking helped give the customer's anytime access

to their banks. Customer's check out their account details,
get their bank statements, perform transactions like
transferring money to other accounts and pay their bills sitting
in the comfort of their homes and offices.

However the biggest limitation of Internet banking is the

requirement of a PC with an Internet connection, not a big
obstacle if we look at the US and the European countries, but
definitely a big barrier if we consider most of the developing
countries of Asia like China and India. Mobile banking addresses
this fundamental limitation of Internet Banking, as it reduces
the customer requirement to just a mobile phone.

The main reason that Mobile Banking scores over Internet

Banking is that it enables Anywhere Anytime Banking'.
Customers don't need access to a computer terminal to access
their bank accounts, now the can do so on-the-go while waiting
for the bus to work, traveling or when they are waiting for their
orders to come through in a restaurant.

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 The scale at which Mobile banking has the potential to grow
can be gauged by looking at the pace users are getting mobile
in these big Asian economies. According to the Cellular
Operators' Association of India (COAI) the mobile subscriber
base in India hit 40.6 million in the August 2004. In September
2004 it added about 1.85 million more. The explosion as most
analysts say, is yet to come as India has about one of the
biggest untapped markets. China, which already witnessed the
mobile boom, is expected to have about 300 million mobile
users by the end of 2004. All of these countries have seen
gradual roll-out of mobile banking services, the most
aggressive being Korea which is now witnessing the roll-out of
some of the most advanced services like using mobile phones
to pay bills in shops and restaurants.

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 OBJECTIVE

To know mobile banking

To know services provided in mobile banking

To study mobile banking in ICICI bank

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 Chapter No: 1

Adoption of tile-banking as well as Internet banking has

received research attention in recent years. Much of the
existing research in electronic banking services has adopted an
organizational perspective or a distribution channel
perspective. Consumers using these services have been focus
in a large body of current research, nevertheless customer
behavior in mobile banking context have remained rather
uncharted territory. This paper aims at filling that gap by
shedding light on the general usage of mobile services and in
particular on influence of demographic characteristics on
usage. The survey was conducted among Ghaziabad bank
customers. The paradigm shift, from traditional branch banking
to electronic banking; the newly emerged channels; rapidly
increasing penetration rates of mobile phones are among other
the motivators of this study. The approach employed is
practical and provides insights drawn from the quantitative
empirical survey.

The newly emerged mobile banking services represent an

innovation where both intangible service and an innovative
medium of service delivery employing high technology are
present. Thus, concepts of innovation and diffusion of
innovation are even more intricate as technology and service
aspects have an effect on the characteristics of mobile banking
services.

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7 | Page
 Traditionally research relating to the customer adoption of
innovation has tended to concentrate on socio-demographic
and psychographic attributes of potential adopters. Even
though the kind of personal characteristics of a consumer have
found to be predictors of adoption, an increasing body of
research has demonstrated that it is the perceived attributes of
innovation itself rather than the personal characteristics that
are the stronger predictors of the adoption decision. In the
search to understand consumers' adoption of innovation, and
where research has focused on the consumer perspective,
Rogers' diffusion model, which originally dates back to 1962,
has often been employed. Within financial services innovation
research, have applied Rogers' model to Internet banking.

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 Mobile Banking Services

Banks offering mobile access are mostly supporting some

or all of the following services:

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

Pension plan management

Payments & Transfers

Domestic and international fund transfers

Micro-payment handling

Mobile recharging

Commercial payment processing

Bill payment processing

Investments

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 Portfolio management services

Real-time stock quotes

Personalized alerts and notifications on security prices

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

Content Services

General information such as weather updates, news

Loyalty-related offers

Location-based services

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 One way to classify these services depending on the
originator of a service session is the Push/Pull' nature. Push' is
when the bank sends out information based upon an agreed set
of rules, for example your banks sends out an alert when your
account balance goes below a threshold level. Pull' is when the
customer explicitly requests a service or information from the
bank, so a request for your last five transactions statement is a
Pull based offering.

The other way to categorize the mobile banking services,

gives us two kind of services Transaction based and Enquiry
Based. So a request for your bank statement is an enquiry
based service and a request for your fund's transfer to some
other account is a transaction-based service. Transaction based
services are also differentiated from enquiry based services in
the sense that they require additional security across the
channel from the mobile phone to the banks data servers.

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 Based upon the above classifications, we arrive at the
following taxonomy of the services listed before.

Push Based Pull Based

TransactionBa Fund Transfer
sed Bill Payment
Other financial services
like share trading.

Enquiry Based Credit/Debit Alerts. Account Balance

Enquiry.
Minimum Balance
Alerts. Account Statement
Enquiry.
Bill Payment
Alerts. Cheque Status Enquiry.
Cheque Book Requests.
Recent Transaction

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 Te c h n o lo g ie s behind
Technologies b e h in d Mobile
M o b ile
B a n k in g
Banking

Technically speaking most of these services can be

deployed using more than one channel. Presently, Mobile
Banking is being deployed using mobile applications developed
on one of the following four channels.

IVR (Interactive Voice Response)

SMS (Short Messaging Service)

WAP (Wireless Access Protocol)

Standalone Mobile Application Clients

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 IV
IVRR
In t e r a c t iv e V
Interactive o ic e
Voice
R esponse
Response

IVR or Interactive Voice Response service operates

through pre-specified numbers that banks advertise to their
customers. Customer's make a call at the IVR number and are
usually greeted by a stored electronic message followed by a
menu of different options. Customers can choose options by
pressing the corresponding number in their keypads, and are
then read out the corresponding information, mostly using a
text to speech program.

Mobile banking based on IVR has some major limitations

that they can be used only for Enquiry based services. Also, IVR
is more expensive as compared to other channels as it involves
making a voice call which is generally more expensive than
sending an SMS or making data transfer (as in WAP or
Standalone clients).

One way to enable IVR is by deploying a PBX system that

can host IVR dial plans. Banks looking to go the low cost way
should consider evaluating Asterisk, which is an open source
Linux PBX system.

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 SMS Short Messaging Service

SMS uses the popular text-messaging standard to

enable mobile application based banking. The way this works is
that the customer requests for information by sending an SMS
containing a service command to a pre-specified number. The
bank responds with a reply SMS containing the specific
information.

For example, customers of the HDFC Bank in India can get

their account balance details by sending the keyword
HDFCBAL' and receive their balance information again by SMS.

However there have been few instances where even

transaction-based services have been made available to
customer using SMS. For instance, customers of the Centurion
Bank of Punjab can make fund transfer by sending the SMS
TRN (A/c No) (PIN No) (Amount)'.

One of the major reasons that transaction based services

have not taken of on SMS is because of concerns about
security.

The main advantage of deploying mobile applications over

SMS is that almost all mobile phones are SMS enabled.

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 An SMS based service is hosted on a SMS gateway that
further connects to the Mobile service providers SMS Centre.
There are a couple of hosted IP based SMS gateways available
in the market and also some open source ones like Kannel.

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 WAP Wireless Access Protocol

WAP uses a concept similar to that used in Internet

banking. Banks maintain WAP sites which customer's access
using a WAP compatible browser on their mobile phones. WAP
sites offer the familiar form based interface and can also
implement security quite effectively.

Bank of America offers a WAP based service channel to its

customers in Hong Kong. The banks customers can now have
an anytime, anywhere access to a secure reliable service that
allows them to access all enquiry and transaction based
services and also more complex transaction like trade in
securities through their phone A WAP based service requires
hosting a WAP gateway. Mobile Application users access the
bank's site through the WAP gateway to carry out transactions,
much like internet users access a web portal for accessing the
banks services.

The following figure demonstrates the framework for

enabling mobile applications over WAP. The actually forms that
go into a mobile application are stored on a WAP server, and
served on demand. The WAP Gateway forms an access point to
the internet from the mobile network.

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 WAP Network Architecture for Mobile Applications

Standalone Mobile
M obile Application
Clients

Standalone mobile applications are the ones that hold out

the most promise as they are most suitable to implement
complex banking transactions like trading in securities. They
can be easily customized according to the user interface
complexity supported by the mobile. In addition, mobile
applications enable the implementation of a very secure and
reliable channel of communication.

One requirement of mobile applications clients is that they

require to be downloaded on the client device before they can
be used, which further requires the mobile device to support
one of the many development environments like J2ME or
Qualcomm's BREW. J2ME is fast becoming an industry standard
to deploy mobile applications and requires the mobile phone to
support Java.

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 The major disadvantage of mobile application clients is
that the applications needs to be customized to each mobile
phone on which it might finally run. J2ME ties together the API
for mobile phones which have the similar functionality in what
it calls 'profiles'.

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 Out of J2ME and BREW, J2ME seems to have an edge right
now as Nokia has made the development tools open to
developers which has further fostered a huge online community
focused in developing applications based on J2ME. Nokia has
gone an additional mile by providing an open online market
place for developers where they can sell their applications to
major cellular operators around the world.

Quite a few mobile software product companies have

rolled out solutions, which enable J2ME mobile applications
based banking. One such product is Wireless I- banco. The
mobile user downloads and installs the wireless I-banco
application on their J2ME pone. The J2ME client connects to the
wireless I-banco server through the service providers GSM
network to enable users to access information about their
accounts and perform transactions. One of the other big
advantages of using a mobile application client is that it can
implement a very secure channel with end-to- end encryption.

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 However countries like India face a serious obstacle in the
proliferation of such clients as few users have mobiles, which
support J2ME or BREW. However, one of the biggest CDMA
players in the Indian telecom industry, Reliance Infocomm has
about 7.01 million users all of which have handsets, which
support J2ME. Reliance has unveiled one of the most ambitious
data services deployment program in the country. On the
other hand a country like South Korea with its tech-savvy
population has a widespread adoption of the higher-end
mobiles, which support application development.

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 Advantages of Mobile Banking

The biggest advantage that mobile banking offers to

banks is that it drastically cuts down the costs of providing
service to the customers. For example an average teller or
phone transaction costs about $2.36 each, whereas an
electronic transaction costs only about $0.10 each. Additionally,
this new channel gives the bank ability to cross-sell up-sell their
other complex banking products and services such as vehicle
loans, credit cards etc.

For service providers, Mobile banking offers the next

surest way to achieve growth. Countries like Korea where
mobile penetration is nearing saturation, mobile banking is
helping service providers increase revenues from the now static
subscriber base. Service providers are increasingly using the
complexity of their supported mobile banking services to
attract new customers and retain old ones.

A very effective way of improving customer service could

be to inform customers better. Credit card fraud is one such
area. A bank could, through the use of mobile technology,
inform owners each time purchases above a certain value have
been made on their card. This way the owner is always
informed when their card is used, and how much money was
taken for each transaction.

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 Similarly, the bank could remind customers of outstanding
loan repayment dates, dates for the payment of monthly
installments or simply tell them that a bill has been presented
and is up for payment. The customers can then check their
balance on the phone and authorize the required amounts for
payment.

The customers can also request for additional information.

They can automatically view deposits and withdrawals as they
occur and also pre- schedule payments to be made or cheques
to be issued. Similarly, one could also request for services like
stop cheque or issue of a cheque book over ones mobile
phone.

There are number of reasons that should persuade banks

in favor of mobile phones. They are set to become a crucial part
of the total banking services experience for the customers.
Also, they have the potential to bring down costs for the bank
itself. Through mobile messaging and other such interfaces,
banks provide value added services to the customer at
marginal costs.

Such messages also bear the virtue of being targeted and

personal making the services offered more effective. They will
also carry better results on account of better customer profiling.

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 Yet another benefit is the anywhere/anytime
characteristics of mobile services. A mobile is almost always
with the customer. As such it can be used over a vast
geographical area. The customer does not have to visit the
bank ATM or a branch to avail of the banks services. Research
indicates that the number of footfalls at a banks branch has
fallen down drastically after the installation of ATMs. As such
with mobile services, a bank will need to hire even less
employees as people will no longer need to visit bank branches
apart from certain occasions.

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 With Indian telecom operators working on offering services
like money transaction over a mobile, it may soon be possible
for a bank to offer phone based credit systems. This will make
credit cards redundant and also aid in checking credit card
fraud apart from offering enhanced customer convenience. The
use of mobile technologies is thus a win-win proposition for
both the banks and the banks customers.

The banks add to this personalized communication

through the process of automation. For instance, if the
customer asks for his account or card balance after conducting
a transaction, the installed software can send him an
automated reply informing of the same. These automated
replies thus save the bank the need to hire additional
employees for servicing customer needs.

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 AXIS BANK

INTRODUCTION OF BANK

Commercial banking services which includes merchant

banking, direct finance infrastructure finance, venture capital
fund, advisory, trusteeship, forex, treasury and other related
financial services. As on31-Mar-2009, the Group has 827
branches, extension counters and3, 595 automated teller
machines (ATMs).Axis Bank was the first of the new private
banks to have begun operations in 1994, after the Government
of India allowed new private banks to be established. The Bank
was promoted jointly by the Administrator of the specified
undertaking of the Unit Trust of India(UTI - I), Life Insurance
Corporation of India (LIC) and General Insurance Corporation of
India (GIC) and other four PSU insurance companies, i.e.
National Insurance Company Ltd., The New India Assurance
Company Ltd., The Oriental Insurance Company Ltd. and United
India Insurance Company Ltd. The Bank today is capitalized to
the extent of Rs. 359.76crores with the public holding (other
than promoters) at 57.79%.TheBank's Registered Office is at
Ahmedabad and its Central Office is located at Mumbai. The
Bank has a very wide network of more than853 branches and
Extension Counters (as on 30th June 2009). The Bank has a
network of over 3723 ATMs (as on 30th June 2009) providing 24

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hours a day banking convenience to its customers. This is one
of the largest ATM networks in the country. The Bank has
strengths in both retail and corporate banking and is committed
to adopting the best industry practices internationally in order
to achieve excellence.

History of Axis Bank

1993:

The Bank was incorporated on 3rd December and

Certificate of business on 14th December. The Bank transacts
banking business of all description. UTI Bank Ltd. was promoted
by Unit Trust of India, Life Insurance Corporation of India,
General Insurance Corporation of India and its four subsidiaries.
The bank was the first private sector bank to get a license
under the new guidelines issued by the RBI.

1997:

The Bank obtained license to act as Depository Participant

with NSDL and applied for registration with SEBI to act as
`Trustee to Debenture Holders'. Rupees 100 cores was
contributed by UTI, the rest from LIC Rs 7.5 cores, GIC and its
four subsidiaries Rs 1.5 cores each.

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2004:

Comes out with Rs. 500 mn Unsecured Redeemable Non-

Convertible Debenture Issue, issue fully subscribed -UTI Bank
Ltd has informed that Shri Ajeet Prasad, Nominee of the
Administrator of the Specified Undertaking of the Unit Trust of
India (UTI - I) has been appointed as an Additional Director of
the Bank w. e. f. January 20,2004.-UTI Bank opens new branch
in Udupi-UTI Bank, Geojit in pact for trading platform in Qatar
-UTI Bank ties up with Shriram Group Cos-Unveils premium
payment facility through ATMs applicable to LIC UTIBank
customers Metal junction (MJ)- the online trading and
procurement joint venture of Tata Steel and Steel Authority of
India(SAIL)- has roped in UTI Bank to start off own equipment
for Tata Steel.-DIEBOLD Systems Private Ltd, a wholly owned
subsidiary of Diebold Incorporated, has secured a major
contract for the supply of ATMs and services to UTI Bank -HSBC
completes acquisition of 14.6% stake in UTIBank for .6 m -UTI
Bank installs ATM in Thiruvananthapuram -Launches
Remittance Card' in association with Remit2India, a Web site
offering money transfer services

2005:

- UTI Bank enters into a banc assurance partnership with

Bajaj Allianz General for selling general insurance products
through its branch network. -UTI Bank launches its first Satellite
Retail Assets Centre (SRAC) in Karnataka at Mangalore.

2006:

-UBL sets up branch in Jaipur -UTI Bank unveils priority

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banking lounge.

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 Business Rules

All Current/ Savings Bank Account holders in P

segment are eligible.

Transaction limit per customer per day is Rs.50,000/-

with a calendar month limit of Rs.2,50,000/-

All customers can avail the Service irrespective of

their telecom service provider.

The Service is free of charge. SMS/GPRS cost will be

borne by the customer.

2. Mobile Banking Service over SMS:

The service is available on all phones (java/non java)

with/without GPRS connection. No need to download the
application. Ordinary SMS charges are applicable.

The following functionalities are available:

Enquiry Services (Balance Enquiry/Mini Statement)

Mobile Top up

DTH Top up/ recharge

IMPS- Mobile to Mobile Transfer

Change MPIN

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 Research Methods

Question1.

Which option would you preferMobile or online

Banking?

Answer: 60% people prefer Mobile banking.

Question 2.

ARE YOU COMFORTABLE USING WITH M-BANKING

TRANSACTIONSS ?

Answer: 40% people are comfortable with M-Banking

Transactions

Question 3.

Which method do you use most often to manage

your bank account(s), customers responded as follows:

Internet Banking (laptop or PC) 39% (36% in 2010)

Branches 18% (25% in 2010)
ATMs 12% (15% in 2010)
Mail 8% (8% in 2010)
Telephone - 9% (6% in 2010)
Mobile (cell phone, Blackberry, PDA, I-Pad, etc.) 6%
(3% in 2010)

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Q4.Which services you use often?

The following functionalities are available:

Funds transfer (within and outside the bank)

Interbank Mobile Payment Services (IMPS): Click here
for details.
Enquiry services (Balance enquiry/ Mini statement)
Cheque book request
Demat Enquiry Service
Bill Payment (Utility bills, credit cards, Insurance
premium), Donations, Subscriptions
Mobile Top up
M Commerce (Top up of Tata sky, Big TV, Sun Direct,
Dish TV, Digital TV and Videocon d2h connections,
SBI life insurance premium)

Usage
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Usage

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Q5.Any extra charges for using MOBILE BANKING
SERVICES?

Extra charges for using Mobile Banking Services

120%

100%

80% Extra charges for

using MOBILE
60% BANKING SERVICES

40%

20%

0%
Yes No

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Q6.AXIS BANK mobile banking services are you using it?

AXIS BANK mobile banking services are you using it

80%
70%
60%
AXIS BANK mobile
50%
banking services are
40% you using it
30%
20%
10%
0%
Yes No

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Q7.IF yes which one?

Funds transfer (within and outside the bank)

Interbank Mobile Payment Services (IMPS): Click here
for details.
Enquiry services (Balance enquiry/ Mini statement)
Cheque book request
Demat Enquiry Service
Bill Payment (Utility bills, credit cards, Insurance
premium), Donations, Subscriptions
Mobile Top up
M Commerce (Top up of Tata sky, Big TV, Sun Direct,
Dish TV, Digital TV and Videocon d2h connections,
SBI life insurance premium)

U sage

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Q8.HOW AXIS bank services are different from other
banks?

A)more services

b)takes less time for services

c)customer friendly

d)helps customer in problematic situations

Answer:

Axis bank More Services than any other bank

Employee of axis bank are customer friendly

Q9.some problems associated with Mobile banking?

A) Does it requires GPRS/any other platform for services

compulsorily.

b) Is it provided to all service providers

c) Does it requires to download any specific applications

D) Service Charges

Problems associated with Mobile Answer

banking
Yes No
Does it requires GPRS/any other
platform for services compulsorily

Is it provided to all service

providers
Does it requires to download any
specific applications

Service Charges

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 BANKERS POINT OF VIEW

Q1.WHICH SERVICES ARE PROVIDED IN YOUR BANK?

Funds transfer (within and outside the bank)

Interbank Mobile Payment Services (IMPS): Click here
for details.
Enquiry services (Balance enquiry/ Mini statement)
Cheque book request
Demat Enquiry Service
Bill Payment (Utility bills, credit cards, Insurance
premium), Donations, Subscriptions
Mobile Top up
M Commerce (Top up of Tata sky, Big TV, Sun Direct,
Dish TV, Digital TV and Videocon d2h connections,
SBI life insurance premium)

Q2.Which is more popular?

Funds transfer (within and outside the bank)

Interbank Mobile Payment Services (IMPS): Click here
for details.
Enquiry services (Balance enquiry/ Mini statement)
Cheque book request
Demat Enquiry Service
Bill Payment (Utility bills, credit cards, Insurance
premium), Donations, Subscriptions
Mobile Top up
M Commerce (Top up of Tata sky, Big TV, Sun Direct,
Dish TV, Digital TV and Videocon d2h connections,
SBI life insurance premium)

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 Q3.IS IT INSTRUMENT/SOFTWARE/SERVICE
PROVIDER specific?

Answer: NO

Q4.Advantages?

Less time
Customer friendly
NO service charges etc.

Q5.Customer care?

TOLLFREE NO. Yes

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 Conclusion

Mobile banking is poised to become the big killer mobile

application arena. However, banks going mobile the first time
need to tread the path cautiously. The biggest decision that
banks need to make is the channel that they will support their
services on.

Mobile banking through an SMS based service would

require the lowest amount of effort, in terms of cost and time,
but will not be able to support the full breath of transaction-
based services. However, in markets like India where a bulk of
the mobile population users' phones can only support SMS
based services, this might be the only option left.

On the other hand a market heavily segmented by the

type and complexity of mobile phone usage might be good
place to roll of WAP based mobile applications. A WAP based
service can let go of the need to customize usability to the
profile of each mobile phone, the trade-off being that it cannot
take advantage of the full breadth of features that a mobile
phone might offer.

Mobile application standalone clients bring along the

burden of supporting multiple mobile device profiles. According
to the Gartner Group, mobile banking services will have to
support a minimum of 50 different device profiles in the near
future. However, currently the best user experience, depending

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on the capabilities of a mobile phone, is possible only by using
a standalone client.

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 Mobile banking has the potential to do to the mobile
phone what E-mail did to the Internet. Mobile Application
based banking is poised to be a big m-commerce feature,
and if South Korea's foray into mass mobile banking is any
indication, mobile banking could well be the driving factor to
increase sales of high-end mobile phones. Nevertheless,
Bank's need to take a hard and deep look into the mobile
usage patterns among their target customers and enable
their mobile services on a technology with reaches out to the
majority of their customers.

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 Questionnaires

1. What do you believe is the potential value of mobile

banking?

o Reaching younger customers

o Improving customer service
o Transaction migration
o Lead generation
o Additional fee income for services provided

2. by when, in your opinion, will mobile banking become the

main transaction tool?

o By 2013
o By 2015
o By 2020
o Mobile banking will not become the main transaction tool
for retail banking
o Dont Knows

3. What revenue streams do you think mobile banking will

drive?

o Mobile banking fees

o Third party advertising
o Cross selling
o There is no revenue potential from mobile banking

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4. How long has your bank been offering mobile banking?

o For less than 1 year

o Past 1-2 years
o More than 3 years
o My bank does not offer mobile banking

5. From a technology viewpoint, what do you feel is the main

way for delivering mobile banking?

o Messaging-based, (predominantly SMS but also USSD)

o Mobile Internet Browser
o Downloadable application
o All the above (modality triple-play)

6. What is the strategy for mobile banking at your bank?

o Develop in-house
o A solution from an external vendor
o An outsourced/ASP-based offering (with vendor)

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 Bibliography

http://www.scribd.com

http://www.infogile.com

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