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Embarking on M-Banking

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CIOL Bureau
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Countries like India, China and Philippines offer huge potential for mobile banking, as the mobile infrastructure in these countries is much better than fixed line infrastructure, and much more evolved. Further, these countries are also witnessing exponential growth in the mobile industry. For instance, the Indian telecom market is galloping with 162.3 mn mobile users as on March 2006 and an average of 5-6 mn mobile users being added every month. In Asia Pacific, Koreans, known to be tech savvy, use mobile banking in a big way. However, currently, in India mobile banking is mushrooming and gaining momentum.

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Mobile banking is the evolutionary step after Internet banking. It is an additional service bolted on top of an existing solution, making access to services more immediate and reducing customer reliance on branch infrastructure or access to the Internet. A mobile bank is by definition a new offering and thus unconstrained by existing infrastructure, pricing structures and product rules, allowing it to be optimized for a totally mobile experience.

M-banking Today

Today, mobile banking offers its users host of services, including value added service offered by the banks either free or on subscription. Benefits to the provider are numerous as it reduces the individual's dependency on the physical infrastructure, and mobile transactions are less costly to facilitate and manage. Few customer friendly services provided by different banks include: account balance enquiry, account statement enquiries, cheque status enquiry, cheque book requests, fund transfer between accounts, credit/debit alerts, credit threshold limits, minimum balance alerts, bill payment alerts, bill payment, recent transaction history requests, information requests like interest rates/exchange rates.

Banking the Un-banked

Given that mobile phones in India have become affordable, wherein a user can now go mobile for as low as Rs 1,500, mobile banking can be a powerful tool to bank the un-banked. Banks and telcos can collaborate to offer the latest in banking services to rural areas. Additionally, with m-banking, low income people no longer need to use the scarce time and financial resources to travel to distant bank branches. Since m-banking transactions cost far less to process than transactions at an automated teller machine or branch, banks can also make profit handling even small money transfers or payment.

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Fuelling Adoption

Despite the potential for convenience and business opportunity, few people use mobiles even for simple banking queries. Mobile banking is currently seen as a value added service provided by banks. However, it is just a matter of time when it would be the most preferred way for conducting banking/financial transactions.

In order for banks in India to explore full potential, increasing awareness is essential. Moreover, initiatives towards changing people's attitude and mindset are essential. Television sets, washing machines, ATMs and credit cards have taken years to pick up. As customer confidence increases over the security, it is expected that mobile phones will be the most preferred and convenient device for conducting banking transactions and emerge as one of the major payment channels in India. Mobile banking, a symbiosis of technology and financial services, is the hottest area of development in the banking sector and if adequate measures are undertaken to create wide spread awareness and change the mindset of people, it would be just a matter of time when they replace the debit/credit card system in future.

The author is                                                                                                                                                    COO (Mobile Services), Bharti Airtel, Maharashtra and Goa circle