Mobile banking

Mobile banking is a service provided by a bank or other financial institution that allows its customers to conduct financial transactions remotely using a mobile device such as a smartphone or tablet. Unlike the related internet banking it uses software, usually called an app, provided by the financial institution for the purpose. Mobile banking is usually available on a 24-hour basis. Some financial institutions have restrictions on which accounts may be accessed through mobile banking, as well as a limit on the amount that can be transacted. Transactions through mobile banking may include obtaining account balances and lists of latest transactions, electronic bill payments, and funds transfers between a customer’s or another’s accounts. Some apps also enable copies of statements to be downloaded and sometimes printed at the customer’s premises; and some banks charge a fee for mailing hardcopies of bank statements.

From the bank’s point of view, mobile banking reduces the cost of handling transactions by reducing the need for customers to visit abank 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 thepoint of sale or remotely, analogously to the use of a debit or credit card to effect an EFTPOS payment.

Typical mobile banking services may include:

  • Account information
  1. Mini-statements and checking of account history
  2. Alerts on account activity or passing of set thresholds
  3. Monitoring of term deposits
  4. Access to loan statements
  5. Access to card statements
  6. Mutual funds / equity statements
  7. Insurance policy management
  • Transaction
  1. Funds transfers between the customer’s linked accounts
  2. Paying third parties, including bill payments and third party fund transfers(see, e.g., FAST)
  3. Check Remote Deposit
  • Investments
  1. Portfolio management services
  2. Real-time stock quotes
  3. Personalized alerts and notifications on security prices
  • Support
  1. Status of requests for credit, including mortgage approval, and insurance coverage
  2. Check (cheque) book and card requests
  3. Exchange of data messages and email, including complaint submission and tracking
  4. ATM Location
  • Content services
  1. General information such as weather updates, news
  2. Loyalty-related offers
  3. Location-based services

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. 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 payment.

  • Future functionalities in mobile banking

Based on the ‘International Review of Business Research Papers’ from World business Institute, Australia, following are the key functional trends possible in world of Mobile Banking. With the advent of technology and increasing use of smartphone and tablet based devices, the use of Mobile Banking functionality would enable customer connect across entire customer life cycle much comprehensively than before.

Illustration of objective based functionality enrichment In Mobile Banking:

  • Communication enrichment: – Video Interaction with agents, advisors.
  • Pervasive Transactions capabilities: – Comprehensive “Mobile wallet”
  • Customer Education: – “Test drive” for demos of banking services
  • Connect with new customer segment: – Connect with Gen Y – Gen Z using games and social network ambushed to surrogate bank’s offerings
  • Content monetization: – Micro level revenue themes such as music, e-book download
  • Vertical positioning: – Positioning offerings over mobile banking specific industries
  • Horizontal positioning: – Positioning offerings over mobile banking across all the industries
  • Personalization of corporate banking services: – Personalization experience for multiple roles and hierarchies in corporate banking as against the vanilla based segment based enhancements in the current context.
  • Build Brand: – Built the bank’s brand while enhancing the “Mobile real estate”.