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Mobile banking Trends in India

and implementation strategies

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Agenda

Channel conversion
Importance of mobile channel for banks
Mobile banking in the past and today
Customer needs and experience
Security concerns and measures
Mobile banking applications and implementation
Mobile channel integration: approaches
Partnership strategy ( Main Players/Stakeholders/ Partners )
Marketing
Banking Focus
Trends and Statistics
Scenario in India
M-Cheque

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Why Channel Conversion ?

Control costs, removal of cost duplication

Cater to increasing online channel customers

Personalize customer interactions

Unparalleled convenience and proactive customer service

Cross selling

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Importance of mobile channel for banks

Proactive and simple alerting services reduces branch/ call center costs

M-Commerce is expected to account for an increasingly high proportion of

transactions.

Mobile device can be an ideal POS device allowing transactions to be

authorized in many more places than ever before

Mobile services are expected to generate access to new business

opportunities & new alliances across business sectors

High market penetration (up to 80% in some countries) and still growing

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Mobile Banking in the past

Mobile banking solutions were mainly reproduction of already

existing web-based applications with less stress on its mobile
aspects

Low bandwidth & latency issues

High communication costs

Low functionality and fewer capabilities in the mobile devices

Security concerns

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Mobile Banking Today

Fast data services (GPRS)

Low data transfer costs (e.g. flat rates)

More functionality possible (new devices with better displays and browser
functionality)

Higher Security mechanisms

Applications capitalize on the mobile aspects and diversify from existing

web-based solutions

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Security Concerns

Devices are easy to lose/ steal and get misused

Mobile communication being sent as clear text can be read or interrupted

Location-aware applications are considered to be invasion of privacy

Lack of standardizations in payment solutions

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Security measures

SMS channels can be used with encryption by mobile payment applications

to protect data integrity and security.

Use of crypto-Java SIM cards & PKI (Public Key Infrastructure) for
establishing hierarchy of trust; non-repudiation.

Debit/Credit cards linked to a specific phone number of consumer for added

transaction security

Implementation of secure PIN for transactions

For a financial application, gateways should reside behind your firewall

instead of the carrier premises.

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Mobile Banking Applications

M-payments (B2C) & Inter-personal (P2P) payments

Card based payments (Mobile debit/credit/pre-paid card)

Cash payments (Electronic purses/wallets)

Utility bill payments, Credit Card Payment, Mobile Top up

Alerting Services (Transaction alerts, reminders, Stock alerts, Offers

& marketing promotions)

Mobile solutions for personnel servicing business customers e.g.

mobile credit approval, mobile insurance assessment, mobile
collections etc.

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Implementation strategy

Corporate strategy should drive the use of mobile technology.

Determine which business processes or workflows would benefit most from

being mobile-enabled Eg. Sales and field force automation

Mobile enable first, those processes that guarantee the best return on
investment

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Approach

Identify the right processes

Define measurable outcomes

Implement integrated platforms

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Mobile channel integration: 2 approaches

Middleware - Separate channel-by-channel or application-by
application integration

Enterprise - An Integrated middleware layer capable of

connecting all delivery channels with all back end systems

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Main Players/Stakeholders/ Partners

Telco's
Banks

Financial services/ Card companies ( VISA, MasterCard )

Payment service providers

Suppliers/ Solution providers

Customers/ users
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Marketing

Build up a database with high-quality and detailed information about

customers in their target group.

Gaining an in-depth understanding about customers desires & building a

means to address customers on a very personal medium such as a
cellular phone

Launching marketing campaigns which are non-invasive and privacypreserving

Position the products with a strong personal bond

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Banking Focus

SMS alerts can disburden more expensive channels (e.g. contact

centres).

Useful information can be transmitted to the client, and increase

customer loyalty at low cost.

Research shows that the more services the customer uses, the higher
the switching costs would be. Also, the more services the customer
uses, the greater are the banks expected profits.

Mobile offers - e.g Apply for a Personal Loan today "&" get a chance to
win a free dream holiday to Singapore. Just reply "Loan" Conditions
apply

Broadcast to increase the usage of Credit card or debit card - e.g 10

days left for 5%Cash Back "& Bonus Reward Point! Use IDBI Bank
Debit Card Now! *Conditions Apply

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Trends

Mobile devices are proving to be the most compact

technological aid of the future, set to overtake PCs and laptops.

Use of mobile handsets as a payment device is already well

established in Europe and the leading Asia-Pacific markets.
eg. Almost a million Koreans now do their banking via 3G cell
phones (CNN report)

Services which link credit/debit cards with mobile hand held

devices have started to pick up and are expected to play a
major role.

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Mobile trends indicate the potential of m-Banking

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Statistics

Cell phone teledensity is still very low in India at around 6%, In comparison, Chinas
cell phone density is at around 35%, while some of the European and Asia-Pacific
countries have 100% teledensity or more in mobile telephony.

In the past two years, the number of people using mobiles has increased three times

Indian cellular services market is projected to reach $24 billion by the end of 2009, a
CAGR of 35.6%, Gartner said. Indian cellular services market had recorded the highest
growth in Asia Pacific and Japan region in 2004 with a CAGR of 67%.

India is all set to be among the top four countries in mobile phone subscriber numbers
by the end of year 2005, from its current 8th position, according to industry analysts

As on August 31, 2005, There were 62.57 million mobile subscribers in India, according
to data provided by the TRAI. Fixed Phone users already lag behind by 47.44 million

Communications Minister Mr.Dayanidhi Maran recently announced the objective of

India reaching the top of the heap with 250 million phones by December, 2007

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Indian Scenario

Increasingly faster transmission via GPRS

3G technology to be launched soon in India, is expected to bring in a mobile

revolution. Broad band Internet in India is expected to ride on a 3G
backbone

Users are slowly getting used to the concept of a mobile hand held device
as digital cash or wallet to carry out purchases

Presently in India low-value m-commerce transactions are happening.

High value mobile transactions would pick up once the concerns of mobile
secure transactions are being addressed.

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mCheque
mCheque is a secure debit/credit card payment system using
mobile phone SIM with security based on EMV 2000 specifications.

CUSTOMER

BANK

MERCHANTS/SERVICES

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mCheque - Overview

mCheque is a secure card-present transaction system.

Acceptance of VISA/Visa Electron in mChq mode does not require a PoS

terminal. Any GSM mobile phone (with an enhanced mCheque SIM) can be
used to accept a VISA/Visa Electron payment in mChq mode.

Upto 16 different VISA or VISA Electron cards from different Banks can be
securely personalized Over-the-Air (OTA) on mobile SIMs.

mCheque is inter-operable across multiple operators and banks.

Key management process is regulated by IDRBT-Hyderabad (subsidiary of

Reserve Bank of India) in agreement with the participating Bank.

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Product Benefits
Customer Benefits
Secure, Convenient and easy method of payment
Anywhere anytime payment

Merchant Benefits
Additional payment method for customers
Small payment amounts can be accepted
Portable payment options for merchants on move (Taxis,
Couriers, Doctors etc)
Banks
Additional channel for customer payments
Use of existing Infrastructure
Value added service to customers
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Future
Mobile devices will also be used to handle short distance payments and
transactions enabled by the Blue tooth technology, for example Point of
sale machines and parking meters

VPN secured corporate network payments

m-Commerce fully loaded including share trading (m-Trading)

INDIA
Indias mobile market has grown to over 50 million subscribers and this
number is constantly on the upswing. India is one of the worlds largest
markets for mobile phones. A fact acknowledged by Nokia, Motorola and
LG among others.

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THANK YOU

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