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STRATEGIC IMPLICATION OF MOBILE BANKING IN INDIABANKERS PERSPECTIVE

SUBMITTED BY

MD ZAFAR IQBAL Register No: 1021322 (MBA FINANCE)

UNDER THE GUIDANCE OF PROF. CKT CHANDRASHEKHARA HEAD OF ADMINISTRATION- MBA CUIM

A Thesis Submitted in Partial Fulfillment Of The Requirement for the Award of the Degree of Master of Business Administration

Bangalore, India 2012

DECLARATION
I, Md Zafar Iqbal, hereby declare that the dissertation entitled Strategic Implication of Mobile Banking in India- Bankers Perspective has been undertaken by me for the award of Master of Business Administration. I have completed this study under the guidance of Prof. CKT Chandra Shekhara, Head of Administration, Christ University Institute of Management, Bangalore.

I also declare that this dissertation has not been submitted for the award of any Degree, Diploma, Associate ship or Fellowship or any other title in this University or any other University.

Place: Bangalore

Md. Zafar Iqbal Regn. No: 1021322

Date:

(Research Student)

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CERTIFICATE
This is to certify that the dissertation submitted by Md Zafar Iqbal on the title Strategic Implication of Mobile Banking in India- Bankers Perspective is a record of research work done by him during the academic year 2011 2012 under my guidance and supervision in partial fulfillment of the requirements for the award of the degree of Master of Business Administration. This dissertation has not been submitted for the award of any Degree, Diploma, Associate ship or Fellowship or any other title in this University or any other University.

Prof. CKT Chandra Shekhara Head of Administration Christ University Institute of Management

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ACKNOWLEDGEMENT
I sincerely feel the credit of the project could not be narrowed to only one individual. With a deep sense of gratitude I express my thanks to all those who have been instrumental in the completion of my summer internship project.

Firstly, I thank the God Almighty for the blessings to complete the endeavor. I extend my gratitude to the Vice-Chancellor Dr. (Fr.) Thomas C. Matthew and Pro Vice-Chancellor Dr. (Fr.) Abraham V. M of Christ University for giving me the opportunity to do this research. I thank Fr. Thomas T. V., Director, Christ University Institute of Management and Prof. C. K. T. Chandrasekhara, Head-Administration for their kind support.

I would like to thanks my mentor, Professor CKT Chandrasekhara (H.O.D Christ University Institute of Management), for guiding me throughout. My intellectual debt is to all my professors who have contributed significantly in various ways towards the completion of the project. They provided the guidelines on which the project was made.

I would also like to thank my parents, who were the inspiration for me, for their priceless moral support and encouragement.

However, I accept the sole responsibility for any errors of omission and commission.

Md. Zafar Iqbal Regn: 1021322

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C O N T E N T S
CHAPTER NO. -------------------------------------------------------------------------------------------DECLARATION CERTIFICATE ACKNOWLEDGEMENT CONTENT TABLE LIST OF TABLES LIST OF GRAPHS ABSTRACT TOPIC PAGE NO. ii iii iv v viii viii ix

1 1.1 1.2
1.2.1 1.2.2 1.2.3

INTRODUCTION GENESIS OF THE PROBLEM MAJOR CONCEPTS


CONCEPT OF MOBILE BANKING MOBILE BANKING BUSINESS MODEL FINANCIAL INCLUSION

1 2 3 3 3 4 4 5 6 7 7 7 10 11 12

1.3 1.4 2 2.1 2.2 2.3 2.4 2.5 2.6

NEED OF THE STUDY OVERVIEW OF THE STUDY REVIEW OF LITERATURE IMPORTANCE OF REVIEW OF LITERATURE METHOD OF REVIEW STUDIES CONDUCTED ABROAD STUDIES CONDUCTED IN INDIA ARRANGEMENT OF STUDIES IN CHRONO ORDER BENEFIT OF THE REVIEW

3 3.1 3.2 3.3 3.4 3.5 3.6 3.7 4 4.1 4.2 4.3 4.4 5 5.1
5.1.1 5.1.2 5.1.3 5.1.4 5.1.5 5.1.6 5.1.7

DESIGN AND METHOD OF STUDY STATEMENT OF PROBLEM VARIABLES OF STUDY OBJECTIVES OF STUDY HYPOTHESIS DESIGN OF STUDY SAMPLING PROCEDURE TOOLS AND STATISTICAL ANALYSIS USED INDUSTRY ANALYSIS BANKING INDUSTRY BANKING IN INDIA CURRENT SCENARIO PURPOSE OF THE STUDY DATA ANALYSIS AND INTERPRETATION ANALYSIS OF THE SURVEY OF BANKS
PROFILE OF SURVEYED BANKS SERVICES OFFERED UNDER MB HYPOTHESIS TESTING & REGRESSION ANALYSIS TARGET GROUP FOR MB REASON FOR NOT ADVERTISING MB BANKS OFFERING MB FOR FINANCIAL INCLUSION PERFORMANCE OF MB IN FINANCIAL INCLUSION

13 14 14 14 14 15 15 15 16 17 17 18 18 20 21 21 23 25 28 28 29 29 30 30 31 33 34 34 35

5.2
5.2.1 5.2.2 5.2.3 5.2.4 5.2.5 5.2.6

ANALYSIS OF THE SURVEY OF CUSTOMERS


PROFILE OF RESPONDENTS HYPOTHESIS TESTING & CHI SQUARE TEST USAGE PATTERN OF MB PREFERRENCE OF MB SERVICES OBSTACLES SCENARIO ANALYSIS

6 6.1
6.1.1 6.1.2

FINDINGS AND CONCLUSION MAJOR FINDINGS


FINDINGS OF THE BANKS SURVEY FINDINGS OF THE CUSTOMERS SURVEY

37 38 38 39 39 40 40 40 41 42 42 46

6.2 6.3 6.4 6.5

CONCLUSION EDUCATIONAL IMPLICATION LIMITATION OF THE STUDY SUGGESTIONS FOR FURTHER STUDY REFERENCES ANNEXURE QUESTIONNAIRE FOR BANKS QUESTIONNAIRE FOR CUSTOMERS

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Table No. 5.1.2(a)


5.1.3(a) 5.1.3(b)

List of Tables Showing the services offered under mobile banking


Showing model summary of regression analysis Showing ANOVA table

Page 23 25 26 27 31 31 32 33 34

5.1.3(c) 5.2.2(a) 5.2.2(b) 5.2.2(c) 5.2.2(d) 5.2.4

Showing coefficient matrix Showing level of awareness among customers Showing cross-tabulation between age and occupation with level of awareness Showing Chi-Square test ( Age / level of awareness ) Showing Chi-Square test ( Occupation / level of awareness ) Showing descriptive statistics of preference of MB services

Fig No. 5.1.2(a) 5.1.2(b) 5.1.2(c) 5.1.3 5.1.4 5.2.1 5.2.3(a)

List of Graphs Showing bar graph of banks offering MB Accounting services Showing bar graph of banks offering MB Financial Info service Showing bar graph of banks offering MB Brokerage services Showing target customer group Showing reasons for reserved attitude of banks on MB showing the demographic profile of respondent Showing usage pattern of MB

Page 23 24 24 28 28 30 33

ABBREVIATIONS: MBFIMOBILE BANKING FINANCIAL INCLUSION

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STRATEGIC IMPLICATION OF MOBILE BANKING FOR INDIAN BANKS BANKERS PERSPECTIVE


ABSTRACT: Mobile banking is gaining increasing popularity and acceptance in todays banking world, particularly as a means to strengthen customer relation and services. In India, various studies has been done from the point of view of customers and the results showed that most of the customers were either unaware of mobile banking services or many who used this service did not rank it as the most preferred channel. Even then most of the Indian banks are coming up with mobile banking services for its customer. The study examines the strategic implication of the mobile banking services offered by banks in India. It also tries to find out how far this tool is relevant for the purpose of financial inclusion. A survey methodology was utilized involving a selected sample of bankers, i.e., PSUs, private sector banks as well as foreign banks. Based on the analysis, the study presents a number of recommendations that may be helpful for Indian banks. A customer survey was also done to understand the current awareness about mobile banking among the customers. The study revealed the important objectives, banks wish to achieve by offering Mobile Banking. Banks are reluctant to advertise their mobile service offerings as they want to first wish to carefully test the response of the customers. The study also reveals that there is a strong relationship between the significance of mobile banking for Indian banks and the objectives it fulfills. Apart from this customer awareness and adoption remains a concern for the banks. It was also observed that majority of the banks are willing to take advantage of mobile phones penetration to tap the rural market thereby contributing to the purpose of financial inclusion.

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