DISSERTATION

ON
” Comparative study on mobile banking apps”

Submitted to
Faculty of Management

In partial fulfillment of the requirement of the award for the degree of

Integrated Masters of Business Administration
GLS University

Under the guidance of

Faculty Guide
Prof. Neelam Pure
Prof. Ashok Bantwa

Submitted by

Anuj Kadel (201500510010030)

Parth Modi (201500510010050)
[Batch: 2015-2020]
IMBA Semester VI
February 2018

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INSTITUTE’S CERTIFICATE

“It is to certify that this Dissertation Report Titled “Comparative study on

mobile banking apps” is the bonafide work of Mr Anuj kadel (Enrollment No.-
20150051001031) who carried out the research under my supervision.

____________________ __________________
HOD, IMBA Faculty Guide
Kavita Kshatriya Neelam Pure
Ashok Bantwa

2
INSTITUTE’S CERTIFICATE

“It is to certify that this Dissertation Report Titled “Comparative study on

mobile banking apps” is the bonafide work of Mr Parth modi (Enrollment No.-
20150051001031) who carried out the research under my supervision.

3
ACKNOWLEDGEMENT

Any project, be it big or small is successful largely due to the effort of a number of
wonderful people who have always given their valuable advice or lent a helping
hand. I sincerely appreciate the inspiration; support and guidance of all those people
who have been instrumental in making this project a success.

We Anuj kadel & Parth modi, the students of GLS University are extremely grateful
to Faculty of Management, Ahmedabad for the confidence bestowed in our and
entrusting our project entitled “Comparative study on mobile banking apps”

At this juncture I feel deeply honored in expressing my sincere gratitude to my guide

Pro. Dharmesh adeshra and HOD of the department Professor Dr. Kavita Kshatriya
for making the resources available at right time which helped us in compiling our
project and providing scholarly interpretations and valuable insights leading to the
successful completion of our project. Her guidance helped us in all the time of
research/project and he has been immensely patient with through all the missed
deadlines. I could not have imagined having a better advisor and mentor for this
Internship program.

Last but not the least, I place deep sense of gratitude to my family members and
my friends who have been constant source of inspiration during the preparation of
this project work.

Anuj Kadel Parth Modi

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DECLARATION

I, Anuj kadel, hereby declare that the report for dissertation entitled “Comprehensive
project on apparel industry with special focus on promotion and consumer Brand
Loyalty for ”.is a result of my own work and my indebtedness to other work
publications, references, if any, have been duly acknowledged.

Place: Signature

5
DECLARATION

I, Parth Modi, hereby declare that the report for dissertation entitled “Comparative
study on mobile banking apps”.is a result of my own work and my indebtedness
to other work publications, references, if any, have been duly acknowledged.

Place: Signature

6
 EXECUTIVE SUMMARY

The study also tried to analyze the impact of mobile banking usage on the
transactions rate of customers. There exists significant difference in the experience
of customers about the transactional aspects of mobile banking. This was visible in
customer investments, credit card usage, business dealings and cheque related
transactions which get affected by the frequency of transactions done by them.
Customers who never use mobile banking do fewer transactions as compared to
those who use mobile banking several times in a day. Difference between the
demographic variables and customer’s mode of transactions was not found. Thus,
customers’ demographic profile doesn’t influence their transactions behavior. Result
also described that frequent use of mobile banking services have an impact on
customer’s transactions rate. Frequent use of mobile banking increases customer’s
engagement in banking. In this competitive world, banks must understand this
relationship and encourage customers to use mobile banking frequently for their
banking needs. This is possible when banks understand customer’s need and
incorporate it their banking system to provide customer satisfaction. This will not
only help customers to fulfill their banking needs efficiently, it will also improve
bank’s image and increase customer loyalty. Various models have been used in the
literature and factors like usefulness, easiness, innovations, trust, attitude, intention
to use etc. have been identified and their significance is also determined. It was
concluded in the research that introduction of mobile service is not enough but banks
must emphasis on the improvement of features that leads to adoption of this service
by the customers (Kim, Shin & Lee 2007). Banks should understand the importance
of technology in the system and how it can enhance relationship with customers and
increase profitability of the banks.

This paper will help banks to understand customer perception about mobile banking
usage and features. This paper describes importance of E-transactions through
mobile for customers and also supports banks to work on those areas to enhance
relationship with customers. This will automatically increase transactions of
customers and leads to higher fee based revenue for banks. This paper compares ten
different Banks in Delhi/NCR region also provide customers views about various
banks based on their mobile banking services. Banks can use this data and further
analysis can be done to determine customer’s requirements in mobile banking.

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 Preface

“Knowledge is Power”, once said the great philosopher Francis Bacon. However
based on the experience within today’s global markets, he would probably say, “The
ability to capture, communicate & leverage knowledge to solve problems is human
power”.

One can best capture, communicate & leverage knowledge, especially within world
of system engineering by communicating ideas and devising ways and means to give
shape to your plans into reality & this requires a long-term planning, investment and
shrewd thinking.

As a part of this I M.B.A. degree, students have to undergo a Comprehensive Project,

which is designed keeping the prerogative and preferences of industry. This
particular project allows students to implement what they have learned and analyze
the current trends. It is here where the caliber of students is tested to find their
flexibility for rigorous tasks to be assigned to them in future.

The main objective of this project is to know the impact of promotional activities on
consumer brand loyalty. This project also shows the activities that can be done for
the consumer promotion for different products. It also shows the most effective
promotional activity among all other promotional activities.

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CHAPTER 1

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 1.1. Introduction to industry

The world is changing at a staggering rate and technology is considered to be the

key driver for these changes around us. An analysis of technology and its uses show
that it has permeated in almost every aspect of our life. Many activities are handled
electronically due to the acceptance of information technology at home as well as at
workplace. Slowly but steadily, the Indian customer is moving towards new banking
services like internet banking & mobile banking. Mobile banking is a generic term
for the delivery of banking services through mobile phones, personal digital assistant
(PDA). It facilitates an effective payment and accounting system
Thereby enhancing the speed of delivery of banking services considerably. Mobile
phones as a delivery channel for extending banking services have off-late been
attaining greater significance. With the rapid growth in the number of mobile phone
subscribers in India (about 950 million as at the end of February 2013 and growing
at about 8 million a month) mobile banking has a lot of potential. Most of the banks
have started offering information based services like balance enquiry, stop payment
instruction of cheques, transactions enquiry, and location of the nearest ATM/branch
etc. Acceptance of transfer of funds instruction for credit to beneficiaries of same/or
another bank in favor of pre-registered beneficiaries have also commenced in a few
banks. In order to ensure a level playing field and considering that the technology is
relatively new.

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

10
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.

Mobile banking (also known as M-Banking, m-banking, SMS Banking) is a term

used for performing balance checks, account transactions, payments, credit
applications and other banking transactions through a mobile device such as a mobile
phone or Personal Digital Assistant (PDA). The earliest mobile banking services
were offered over SMS. With the introduction of the first primitive smart phones
with WAP support enabling the use of the mobile web in 1999, the first European
banks started to offer mobile banking on this platform to their customers.
Mobile banking has until recently (2010) most often been performed via SMS or the
Mobile Web. Mobile Banking refers to provision and availing banking- and financial
services with the help of mobile telecommunication devices. The scope of offered
services may include facilities to conduct bank and stock market transactions, to
administer accounts and to access customized information."

According to the conceptual model of Mobile Banking can be said to consist of three
interrelated
Concepts:
1. Mobile Accounting
2. Mobile Brokerage
3. Mobile Financial Information Services
Mobile phone banking may also be used to help in business situations as well as
financial.

Mobile Banking Services

Banks offering mobile access are mostly supporting some or all of the following
services:
1. Account Balance Enquiry 2.Account Statement Enquiries.
3. Cheque Status Enquiry. 4. Cheque Book Requests.
5. Fund Transfer between Accounts. 6. Credit/Debit Alerts.
7. Minimum Balance Alerts. 8. Bill Payment Alerts.
9. Bill Payment. 10. Recent Transaction History
11. Information Requests like Interest Rates/Exchange Rates.

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Mobile Banking is a kind of financial services where ABC provides customers with
information inquiry, transfer and remittance, payment, credit card, roaming
remittance, loans to farmer households, time-demand deposits transfer, third-party
depository, customized message, account management, personal setting, etc. by
making using of wireless networks and mobile phones. ABC launches two versions
of Mobile Banking based on different user operation procedures and system
interface displays: WAP Smooth Version and 3G Fashion Version. Although
financial services provided by the two versions are the same, WAP Smooth Version
is designed to enhance access speed, with concise text explanations and links, while
3G Fashion Version aims to boost application experience of users and features vivid
pictures and fast dropdown lists and buttons. The strong financial service capacity
of ABC Mobile Banking is well illustrated by comprehensive functions and
personalized design.
The last time that technology had a major impact in helping banks service their
customers was with the introduction of the Internet banking. Internet Banking helped
give the customer's anytime access to their banks. Customers could 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.
Mobile usage has seen an explosive growth in most of the Asian economies like
India, China and Korea. In fact Korea boasts about a 70% mobile penetration rate
and with its tech-savvy populace has seen one of the most aggressive rollouts of
mobile banking services.
Still, the main reason that Mobile Banking scores over Internet Banking is that it
enables ‘Anywhere Banking'. Customers now don't need access to a computer
terminal to access their banks, they can now do so on the go – when they are waiting
for their bus to work, when they are traveling or when they are waiting for their
orders to come through in a restaurant.
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

12
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. South
Korea is targeted to reach about 42 million mobile users by the end of 2005. All
three 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.
After Internet Banking, Mobile Banking or M-Banking has become the buzz word
in the industry. It's a fact that Internet Banking has given a boost and has shown a
successful way to consider it as a good alternative procedure against physical branch
banking. Now where ever you are, you can access your bank account and you can
do lot more things like checking your account balance, transfer money to some other
account, pay your utility bills online and so on, just by comfortably sitting at your
home or office. But, the technical disadvantage of Internet Banking is, you have to
have internet connectivity and a computer. Definitely it's not a big hindrance in US
or Europe or in the other developed countries, but if one considers the developing
economies, then it's a genuine problem and more specifically in the tier II cities.

So, Mobile Banking has given the traditional banking a newer look "Anywhere
Banking". Now you don't need a PC or a laptop with internet connectivity, just you
need your cell phone with you. Considering the Asian economy countries like China,
India and Korea have seen the mobile boom in last one decade. A projected value of
mobile connectivity in India shows that it will touch 180 Million subscribers by the
end of 2008, where it was pegged at around 2 Million in the year 2000. In Korea,
more than 70% of the entire population is carrying mobile devices.

The biggest advantage Mobile Banking provides to the banks is that it helps to cut
down the costs as it's even more economic than providing tele-banking facilities
where banks have to keep hundreds of tele-callers. Additionally, Mobile Banking
helps banks to upgrade the quality of services and nature of customer relationship
management. Using Mobile Banking, banks can communicate to the defined cluster
of clients. The offers can be customized and this personalization can give the
banking industry a huge mileage, even at a lower cost. Again, using the same mobile
channels, banks can up-sell and cross-sell their highly complex financial products to
the specific set of customers which can be coupled with the selling strategies of
Credit Cards, Home Loans and Personal Loans etc. On the contrary, the service
providers can also accrue more business by providing the Mobile Banking services

13
to their clients. Countries like Japan, Korea or Singapore where the mobile
connectivity has already reached its saturation, the service providers can make
handsome business by providing additional banking services to the same static client
base.

In the services front, different banking services can be provided, depending upon the
banking regulations in respective countries which may include Account Balance
Enquiry, Account Statement Enquiry, Credit/Debit Alerts, Bill Payment Alerts,
Cheque Book Requisition, Transaction History, Minimum Balance Alerts, Fund
Transfer Facilities, etc.

Mobile Banking activities can be categorized in two different manners.

1. By the Nature of Service: It can be any of the two, either Enquiry Based or
Transaction Based. For example, Account Balance Enquiry or a Cheque Book
Requisition can be the good examples of Enquiry Based Services where a Fund
transfer or a bill payment is a transaction activity.

2. Depending on the Originator: Again there can be two different types of services;
Push and Pull, depending on the nature of the originator. A Push based service is
from the Bank to the Client and vice versa. For example, Bill Payment Alert can be
a Push based service, when getting Recent Account History is a Pull based one.

In different countries, Mobile Banking has already gained its popularity. For
example, in the South Korean market LG Telecom teamed up with Kookmin Bank
to provide their Mobile Banking services in 2004 and since then they have seen a
nice and steady growth. In India, Reliance Infocomm has started providing Mobile
banking services to ICICI Bank and HDFC Bank through their R-World
environment.

The Mobile Banking services will become more popular once the availability of the
smart phones or PDA phones shall increase as Smart Phones come with larger
screens and bigger memory size. In the application development front, both J2ME
and BREW have done excellent work and industry expects by the year 2012, more
than 80% of the mobile handsets will be able to run stand-alone Mobile Banking
applications and that time it will be "Anywhere Banking" in real sense.

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When cellphones turned into smartphones, and began to mimic the power found in
most computers, banks have been able to provide consumers with powerful mobile
banking apps that allow you to complete your banking from wherever you are. This
includes making deposits -- depending on the bank and its mobile app -- checking
funds, making bill payments, transferring or sending money. Mobile banking differs
from the payment features available on many of today's smartphones, as it provides
a sign-on link to your individual checking or savings accounts by an app you
download from your bank's website. Though some European banks offered mobile
banking as early as 1999, it took until 2007 for major banks in the U.S. to develop
mobile banking apps that actually worked and customers wanted.

In the Beginning

Banks faced mobile banking challenges in the early part of the decade until the first
smartphones hit the market in 2007. Consumers found it difficult to view their
financial information on the small cell phone screens that were common at the turn
of the 21st century. Some banks offered the service, only to discontinue it for lack
of interest. In 2002, Wells Fargo developed a mobile banking service and only 2,500
customers enrolled in it. Because of the poor response, they soon withdrew the
offering.

Smartphones Changed Everything

Once smartphones took over from cell phones, and the size and capabilities of
mobile devices increased, so did the effectiveness of mobile banking. Banks
introduced mobile banking apps that accommodated more types of cell phones, but
smartphone users and advanced apps gave mobile banking the boost that made it a
safe and viable choice. Consumers preferred the easier navigation and improved
images and graphics offered by these updated, technologically advanced apps.

15
The Revolution

By 2008, even smaller banks began to offer mobile banking services and apps. By
then, larger banks and their customers were using these services regularly. By 2012,
more than 21 percent of all smartphone owners were using mobile banking -- in a
report conducted for the Board of Governors for the Federal Reserve -- but 44
percent of that number belongs to the 18-to-29 age group, with the second largest
group -- 30 to 44 -- representing 36 percent of those who use mobile banking apps.
These numbers are expected to increase as more people rely on smartphones and
tablets, and banks continue developing apps for a variety of mobile devices.

1.2 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
Support

1. Status of requests for credit, including mortgage approval, and insurance

coverage

16
 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.[5] 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

1.3 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

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 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”.

1.4 Challenges for a mobile banking solution

Key challenges in developing a sophisticated mobile banking application are:

Handset accessibility
There are a large number of different mobile phone devices and it is a big challenge
for banks to offer a mobile banking solution on any type of device. Some of these
devices support Java ME and others support SIM Application Toolkit, a WAP
browser, or only SMS.
Initial interoperability issues however have been localized, with countries like India
using portals like "R-World" to enable the limitations of low end java based phones,
while focus on areas such as South Africa have defaulted to the USSD as a basis of
communication achievable with any phone.
The desire for interoperability is largely dependent on the banks themselves, where
installed applications (Java based or native) provide better security, are easier to use
and allow development of more complex capabilities similar to those of internet
banking while SMS can provide the basics but becomes difficult to operate with
more complex transactions.
There is a myth that there is a challenge of interoperability between mobile banking
applications due to perceived lack of common technology standards for mobile
banking. In practice it is too early in the service lifecycle for interoperability to be
addressed within an individual country, as very few countries have more than one
mobile banking service provider. In practice, banking interfaces are well defined and
money movements between banks follow the IS0-8583 standard. As mobile banking
matures, money movements between service providers will naturally adopt the same
standards as in the banking world.

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In January 2009, Mobile Marketing Association (MMA) Banking Sub-Committee,
chaired by CellTrust and VeriSign Inc., published the Mobile Banking Overview for
financial institutions in which it discussed the advantages and disadvantages of
Mobile Channel Platforms such as Short Message Services (SMS), Mobile Web,
Mobile Client Applications, SMS with Mobile Web and Secure SMS.

Security
As with most internet-connected devices, as well as mobile-telephony
devices, cybercrime rates are escalating year-on-year. The types of cybercrimes
which may affect mobile-banking might range from unauthorized use while the
owner is using the toilet, to remote-hacking, or even jamming or interference via the
internet or telephone network data streams. In the banking world, currency rates may
change by the millisecond.
See also: Mobile security
Security of financial transactions, being executed from some remote location and
transmission of financial information over the air, are the most complicated
challenges that need to be addressed jointly by mobile application developers,
wireless network service providers and the banks' IT departments.
The following aspects need to be addressed to offer a secure infrastructure for
financial transaction over wireless network:

1. Physical part of the hand-held device. If the bank is offering smart-card based
security, the physical security of the device is more important.
2. Security of any thick-client application running on the device. In case the
device is stolen, the hacker should require at least an ID/Password to access
the application.
3. Authentication of the device with service provider before initiating a
transaction. This would ensure that unauthorized devices are not connected
to perform financial transactions.
4. User ID / Password authentication of bank’s customer.
5. Encryption of the data being transmitted over the air.
6. Encryption of the data that will be stored in device for later / off-line analysis
by the customer.
One-time password (OTPs) are the latest tool used by financial and banking service
providers in the fight against cyber fraud. Instead of relying on traditional
memorized passwords, OTPs are requested by consumers each time they want to
perform transactions using the online or mobile banking interface. When the request

19
is received the password is sent to the consumer’s phone via SMS. The password is
expired once it has been used or once its scheduled life-cycle has expired.
Because of the concerns made explicit above, it is extremely important that SMS
gateway providers can provide a decent quality of service for banks and financial
institutions in regards to SMS services. Therefore, the provision of service level
agreements (SLAs) is a requirement for this industry; it is necessary to give the bank
customer delivery guarantees of all messages, as well as measurements on the speed
of delivery, throughput, etc. SLAs give the service parameters in which a messaging
solution is guaranteed to perform.
Scalability and reliability
Another challenge for the CIOs and CTOs of the banks is to scale-up the mobile
banking infrastructure to handle exponential growth of the customer base. With
mobile banking, the customer may be sitting in any part of the world (true anytime,
anywhere banking) and hence banks need to ensure that the systems are up and
running in a true 24 x 7 fashion. As customers will find mobile banking more and
more useful, their expectations from the solution will increase. Banks unable to meet
the performance and reliability expectations may lose customer confidence. There
are systems such as Mobile Transaction Platform which allow quick and secure
mobile enabling of various banking services. Recently in India there has been a
phenomenal growth in the use of Mobile Banking applications, with leading banks
adopting Mobile Transaction Platform and the Central Bank publishing guidelines
for mobile banking operations.
Application distribution
Due to the nature of the connectivity between bank and its customers, it would be
impractical to expect customers to regularly visit banks or connect to a web site for
regular upgrade of their mobile banking application. It will be expected that the
mobile application itself check the upgrades and updates and download necessary
patches (so called "Over the Air" updates). However, there could be many issues to
implement this approach such as upgrade / synchronization of other dependent
components.
User adoption
It should be noted that studies have shown that a huge concerning factor of having
mobile banking more widely used, is a banking customer's unwillingness to adapt.
Many consumers, whether they are misinformed or not, do not want to begin using
mobile banking for several reasons. These can include the learning curve associated
with new technology, having fears about possible security compromises, just simply
not wanting to start using technology, etc.

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Personalization
It would be expected from the mobile application to support personalization such as:

1. Preferred Language
2. Date / Time format
3. Amount format
4. Default transactions
5. Standard Beneficiary list
6. Alerts

Mobile banking in the world

African nations such as Kenya would rank highly if SMS mobile banking were
included in the above list. Kenya has 38% of the population as subscribers to M-
Pesa as of 2011. Though as of 2016 mobile banking applications have seen a
tremendous growth in kenyan banking sector who have capitalised on android play
store and apple store to put their applications. Kenyan banks like Equity Bank Kenya
Limited Eazzy banking application and The Co-operative Bank Mco-op cash
application have proved to be a success mobile banking applications.
Mobile banking is used in many parts of the world with little or no infrastructure,
especially remote and rural areas. This aspect of mobile commerce is also popular
in countries where most of their population is unbanked. In most of these places,
banks can only be found in big cities, and customers have to travel hundreds of miles
to the nearest bank.
In Iran, banks such as Parsian, Tejarat, Pasargad Bank, Mellat, Saderat, Sepah,
Edbi, and Bankmelli offer the service. Banco Industrial provides the service in
Guatemala. Citizens of Mexico can access mobile banking with
Omnilife, Bancomer and MPower Venture. Kenya's Safaricom (part of
the Vodafone Group) has the M-Pesa Service, which is mainly used to transfer
limited amounts of money, but increasingly used to pay utility bills as well. In
2009, Zain launched their own mobile money transfer business, known as ZAP, in
Kenya and other African countries. Several other players in Kenya such as
Tangerine, MobiKash and Funtrench Limited also have network-independent
mobile money transfer. In Somalia, the many telecom companies provide mobile
banking, the most prominent being Hormuud Telecom and its ZAAD service.
Telenor Pakistan has also launched a mobile banking solution, in coordination with
Taameer Bank, under the label Easy Paisa, which was begun in Q4 2009. Eko India
Financial Services, the business correspondent of State Bank of India (SBI)
and ICICI Bank, provides bank accounts, deposit, withdrawal and remittance

21
services, micro-insurance, and micro-finance facilities to its customers (nearly 80%
of whom are migrants or the unbanked section of the population) through mobile
banking.
In a year of 2010, mobile banking users soared over 100 percent in Kenya,
China, Brazil and United States with 200 percent, 150 percent, 110 percent and 100
percent respectively.
Dutch Bangla Bank launched the very first mobile banking service in Bangladesh on
31 March 2011. This service is launched with 'Agent' and 'Network' support from
mobile operators, Banglalink and Citycell. Sybase 365, a subsidiary of Sybase, Inc.
has provided software solution with their local partner Neurosoft Technologies Ltd.
There are around 160 million people in Bangladesh, of which, only 13 per cent have
bank accounts. With this solution, Dutch-Bangla Bank can now reach out to the rural
and unbanked population, of which, 45 per cent are mobile phone users. Under the
service, any mobile handset with subscription to any of the six existing mobile
operators of Bangladesh would be able to utilize the service. Under the mobile
banking services, bank-nominated Banking agent performs banking activities on its
behalf, like opening mobile banking accounts, providing cash services (receipts and
payments) and dealing with small credits. Cash withdrawal from a mobile account
can also be done from an ATM validating each transaction by 'mobile phone & PIN'
instead of 'card & PIN'. Other services that are being delivered through mobile
banking system are person-to-person (e.g. fund transfer), person-to-business (e.g.
merchant payment, utility bill payment), business-to-person (e.g. salary/commission
disbursement), government-to-person (disbursement of government allowance)
transactions.
In May 2012, Laxmi Bank Limited launched the very first mobile banking
in Nepal with its product Mobile Khata. Mobile Khata currently runs on a third-party
platform called Hello Paisa that is interoperable with all the telecoms in Nepal
viz. Nepal Telecom, NCell, Smart Teland UTL, and is also interoperable with
various banks in the country. The initial joining members to the platform after Laxmi
Bank Limited were Siddartha Bank, Bank of Kathmandu, Commerz and Trust Bank
Nepal and International Leasing and Finance Company.
Barclays offers a service called Barclays Pingit, and Hello Money offering services
in Africa, allowing transfer of money from the United Kingdom to many parts of the
world with a mobile phone. Pingit is owned by a consortium of banks. In April 2014,
the UK Payments Council launched the Paym mobile payment system, allowing
mobile payments between customers of several banks and building societies using
the recipient's mobile phone number.

22
In Nov 2017 the State Bank of India launched an integrated banking platform in
India called YONO offering conventional banking functions but also payment
services for things such as online shopping, travel planning, taxi booking or online
education.
For 30 years, financial institutions have been on a quest to satisfy their customers’
need for more convenience. First came the automated teller machine (ATM), which
New York’s Chemical Bank introduced to the American public in 1969. It did little
more than dispense cash at first, but the ATM evolved over time to become a true
bank-away-from-bank, providing a full suite of financial transactions.

Then came Internet banking in the mid-1990s, which enabled consumers to access
their financial accounts using a home computer with an Internet connection. Despite
its promise of ultimate convenience, online banking saw slow and tentative growth
as banks worked out technology issues and built consumer trust. Today, Internet
banking has reached a critical mass, with about 35 percent of U.S. households
conducting bank transactions online [source: Information Week].

Yet banking at the living room computer still has some serious limitations. First,
only 62 percent of American households have a computer, according to a 2003 study
conducted by the U.S. Census Bureau. And only 28 percent of Americans have
broadband Internet access, which is essential to efficient, convenient service
[source: GAO]. The biggest issue, however, is mobility. Even with a laptop, it’s
almost impossible to stay connected in virtually any location on the planet.

Not so with mobile phones. They can be carried anywhere and are -- by an enormous
number of people. More than 238 million people in the U.S. have mobile phones.
That’s a whopping 78 percent of the population. And worldwide there are more than
3.25 billion mobile phone subscribers, with penetration topping 100 percent in
Europe [source: ZDNet].

If mobile phones only delivered voice data, then their use as a vehicle to deliver
banking services would be limited. Most phones, however, also provide text-
messaging capabilities, and a growing number are Web-enabled. That makes the
mobile phone an ideal medium through which banks can deliver a wide variety of
services.
23
Banks classify these services based on how information flows. A pull transaction is
one in which a mobile phone user actively requests a service or information from the
bank. For example, inquiring about an account balance is a pull transaction. So is
transferring funds, paying a bill or requesting a transaction history. Because banks
must respond or take some action based on the user request, pull transactions are
considered two-way exchanges.

A push transaction, on the other hand, is one in which the bank sends information
based on a set of rules. A minimum balance alert is a good example of a push
transaction. The customer defines the rule -- "Tell me when my balance gets below
$100" -- and the bank generates an automatic message any time that rule applies.
Similar alerts can be sent whenever there is a debit transaction or a bill payment. As
these examples illustrate, push transactions are generally one way, from the bank to
the customer.

You can also classify mobile banking based on the nature of the service. Transaction-
based services, such as a funds transfer or a bill payment, involve movement of funds
from one source to another. Inquiry-based services don’t. They simply require a
response to a user query. The chart below summarizes these various types of mobile
banking services.

Pull
Push

 Funds transfer
Transaction  Bill payment
 Share trade
 Check order

24
  Minimum balance alert  Account balance inquiry
Inquiry  Credit/debit alert  Account statement inquiry
 Bill payment alert  Check status inquiry
 Transaction history

Clearly, push transactions are not as complex as their pull counterparts. Mobile
banking solutions also vary in their degree of complexity, and some only offer a
fraction of the services you would find in a bricks-and-mortar branch. In this
respect, mobile banking isn't always full-service banking. The factors that affect
this are the type of phone being used, the service plan of the mobile subscriber
and the technology framework of the bank. We’ll look at these technologies next.

Interactive Voice Response (IVR)

If you’ve ever called your credit card issuer and meandered through a maze of
prompts -- "For English, press 1; for account information, press 2" -- then you’re
familiar with interactive voice response. In mobile banking, it works like this:

1. Banks advertise a set of numbers to their customers.

2. Customers dial an IVR number on their mobile phones.
3. They are greeted by a stored electronic message followed by a menu of
options.
4. Customers select an option by pressing the corresponding number on their
keypads.
5. A text-to-speech program reads out the desired information.
IVR is the least sophisticated and the least "mobile" of all the solutions. In fact, it
doesn’t require a mobile phone at all. It also only allows for inquiry-based
transactions, so customers can’t use it for more advanced services.

Short Message Service (SMS)

In some circles, mobile banking and SMS banking are synonymous. That’s
because SMS banking uses text messaging -- the iconic activity of cell phone use.

25
SMS works in either a push mode or a pull mode. In pull mode, the bank sends a
one-way text message to alert a mobile subscriber of a certain account situation
or to promote a new bank service. In push mode, the mobile subscriber sends a
text message with a predefined request code to specific number. The bank then
responds with a reply SMS containing the specific information.

SMS banking has several advantages:

 It works on virtually every cell phone, regardless of manufacturer, model or

carrier.
 It’s a familiar, ubiquitous technology. There were 1.5 trillion text messages
sent in 2007 -- a number that will grow, according to Gartner, to 2.3 trillion
by 2010 [source: ZDNet].
 Sending text messages is relatively cost-effective. Text messages typically
cost 10 to 15 cents each (to send or receive) when purchased individually,
but can cost as little as one cent or less when part of a monthly calling plan.
 It accommodates two-way communication, allowing messages to be
initiated by banks or by customers.
The disadvantages of SMS are related to the inherent limitations of text
messaging. For example, messages can only be 160 characters in length. Plus,
there are no guarantees that a message will actually be delivered to its recipient.
But most troubling for banks is the inability of SMS to deliver a custom interface.
More advanced mobile banking solutions, like those we will discuss in the next
section, overcome these challenges.

Advanced Mobile Banking Technologies

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The next generation of mobile banking is the most similar to the Internet banking
paradigm. It requires an application -- either a browser or a standalone application
-- and a more advanced smartphone to run it. Smartphones are more like real PCs,
with an identifiable operating system and advanced functionality, such as
enhanced data processing and connectivity. There are two approaches to setting
up this type of mobile banking.

Wireless Application Protocol (WAP)

WAP is the technology architecture that makes accessing Internet pages possible
from a mobile phone. Because it includes the concepts of browsers, servers, URLs
and gateways,

WAP provides a user experience that echoes Internet banking conducted on a

home computer. This is an attractive feature to many banks, who also appreciate
the fact that customers don’t have to download any proprietary software to enjoy
robust access to a full line of services and transactions.

WAP banking does have its disadvantages:

 The browsers that run on mobile phones must work on a very small screen.
As a result, banks must create "mobile-friendly" sites that work more
efficiently in cramped quarters. Even with such accommodations, the
number of clicks required to complete a task can be prohibitive.
 WAP banking requires a smart phone or a PDA, but such devices represent
less than 10 percent of the phones in use. Even if a customer has a WAP-
enabled phone, he or she can elect not to sign up for the more costly data
plans required for Internet access.
 Mobile phones lack the level of anti-virus and personal firewall protection
now considered standard on PCs.
 Two-way communication isn't possible. Customers can initiate a dialog, but
banks can’t.
Standalone Mobile Application
Some banks are now providing a downloadable client that mobile subscribers can

27
use to access bank services. These mobile applications offer a reliable channel
and enable users to conduct even complex transactions. They also allow banks to
customize the interface and brand it accordingly.

Although this solution likely represents the future of mobile banking, there are
some issues. First, users are forced to download, install and learn a proprietary
application. Not only that, the application must be customized to each mobile
phone on which it will reside, greatly increasing development costs. And just like
the mobile browsers used in WAP banking, these standalone applications are
vulnerable to attacks, have limited availability and can only accommodate
customer-initiated communication.

As a financial institution prepares for the mobile banking revolution, it must weigh
the advantages and disadvantages of these various solutions to decide which one
best meets the needs of its customers and its own technology infrastructure. In the
next section, we’ll look at the specific mobile banking solutions of two leading
banks.

Although several financial institutions, including Wachovia, Washington Mutual,

Wells Fargo and ING Direct, are launching mobile banking services, we are going
to look at two of the largest and most developed -- Mobile Banking from Bank of
America and Citi Mobile from Citibank.

Mobile Banking from Bank of America

Bank of America chose wireless application protocol as its technology platform.
That means any cell phone with Web access can use the service -- without
downloading any software. However, any customer who wishes to use the mobile
banking services must be set up in online banking. That’s because all transfer and
payee information must be set up on a PC prior to making payments or transfers
in Mobile Banking. Once these criteria are met, customers can:

 Access their checking, savings, credit card, mortgage, line of credit, loan
and other Bank of America accounts
 Pay bills anywhere, anytime

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 Transfer funds from one Bank of America account to another
 Locate branches or ATMs
 Get maps and directions
Bank of America advertises its Mobile Banking as free, but that doesn’t mean
customers won’t incur costs. They will be charged access rates depending on their
mobile carrier. Those who wish to use mobile banking regularly will be better off
signing up for a data plan providing a certain allotment of data and text messages
for a monthly fee. Such a plan is likely more cost-effective than paying for several
one-off charges.

Citi Mobile from Citibank

Citibank opted for the application-based approach to its mobile banking offering.
Like Bank of America Mobile Banking, Citi Mobile requires that users spend some
time on a PC getting the service set up. Citi Mobile customers must also download
software -- a custom, Citibank-branded interface -- to their phones. Here’s how the
process works:

Citibank customers sign on to their online banking accounts and enter their cell
phone numbers, the name of their wireless carriers, and their cell phone models.
This information is necessary because the Citi Mobile application must be
customized to the make and model of the phone.

After customers enroll, two text messages land in their cell phone inbox: The first
with download instructions and the second with an activation key, which is required
to set up the application on the phone.

Customers download and install the application to their phone, a process that takes
about two to three minutes.

Next, customers launch the application and enter their activation keys and cell
phone numbers to initiate the mobile banking service. They're ready to sign on.
Every time they sign on, customers will need to enter their telephone access codes
-- the same code they use to access Citibank’s telephone banking service.

29
The Citi Mobile interface provides access points into account information and
activity, payments and transfers. It also allows users to find Citibank locations and
to connect to customer service with a single click.

Citibank is looking to push the boundaries of mobile banking with some innovative
cell phone trials. One trial, a partnership with MasterCard, AT&T and Nokia,
involves placing near field communications (NFC) chips in certain Nokia
phones. By passing the phone within a few inches of a reader, the NFC chip can
be used to charge a payment to the user's credit or debit card. Such a payment is
called an m-payment, an exciting concept in the world of mobile banking.

M-payments will be possible even when the phone’s user doesn’t have a bank
account. In such a situation, a cell phone owner buys prepaid units from a mobile
operator and then uses those units to pay for goods and services at a partnering
service provider or retailer. Some see this type of transaction as a vital way to get
basic financial services to populations in developing countries or in rural or remote
areas, where people are more likely to have cell phones than bank accounts.

1.5 PESTLE ANALYSIS

The banking industry affects all countries. But it’s subservient to many factors,
particularly to the government and the economy. Banks are unable to behave
independently and must provide services based on specific laws that affect their
growth and offerings.

This PESTLE analysis highlights key factors affecting the banking industry.

Political factors: A tool for the big guys

The banking sector looks all powerful — but it’s susceptible to a bigger giant: the
government.

30
Government laws affect the state of the banking sector. The government can
intervene in the matters of banking whenever, leaving the industry susceptible to
political influence. This includes corruption amongst political parties, or specific
legislative laws such as labor laws, trade restrictions, tariffs, and political stability.

Economic factors: Easily influenced

The banking industry and the economy are tied. How income flows, whether the
economy is prospering or barely surviving during times of recession, affects how
much capital banks can access. Spending habits, and the reasons behind them, affect
when customers borrow or spend funds at banks.

Additionally, when inflation skyrockets, the bank experiences the backlash. Inflation
affects currency and its value and causes instability. Foreign investors think twice
before providing their funds when a particular country’s currency value is high.

Exchange rates also affect banks globally — stable currencies such as the US dollar
impact other currencies, spending habits, and inflation rates in other countries.

Sociocultural factors: Consumers want ease

Cultural influences, such as buying behaviors and necessities, affect how people see
and use banking options. People turn to banks for advice and assistance for loans
related to business, home, and academics. Consumers seek knowledge from bank
tellers regarding saving accounts, bank related credit cards, investments, and more.
Consumers desire a seamless banking experience. And technology is developing to
allow consumers to buy products easier, without requiring assistance directly from
banks.

Technological factors: Smartphones to the rescue

Once, it was expected to visit the local bank to make changes to financial accounts.
But not anymore.

Technology is changing how consumers handle their funds. Many banks offer a
mobile app to witness accounts, transfer funds, and pay bills on smartphones.
Smartphones can scan cheques, and the bank can process it from their end, at their
location. This change helps to save paper and the need to drive directly to the branch
to handle these affairs.

31
Debit cards are also changing. Chips have been implemented, requiring users to
insert their card into debit machines rather than swiping them. Other countries, such
as Canada, have implemented a “tap” option — tapping the debit card onto the
device, requiring no pin, for a transaction to complete. These changes make it easier
on the user to make purchases without required intrusion from banks.

Even banks themselves are utilizing technology within the workplace.

Telecommunicating through virtual meetings is being embraced. It replaces the need
for in-person meetings.

Legal factors: Strict guidelines

The banking industry follows strict laws regarding privacy, consumer laws, and
trade structures to confirm frameworks within the industry. Such structures are
required for customers in the allocated country and for international users.

Environmental: Reduced footprint

With the use of technology — particularly with mobile banking apps — the use for
paper is being reduced. Additionally, the need to drive directly to a branch to handle
affairs is minimized as well.
Many issues are taken care of through mobile apps and online banking services.
Consumers can apply for credit cards online, buy cheques online, and have many of
their banking questions answered online or by phone. Thus, reducing individual
environmental footprints.

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1.6 PORTERS FIVE FORCE MODEL

Threat of New Entrants:

Despite the regulatory and capital requirements of starting a new bank, between
1977 and 2002 an average of 215 new banks opened each year according to the
FDIC. With so many new banks entering the market each year the threat of new
entrants should be extremely high.

However, due to mergers and bank failures the average number of total banks
decreases by roughly 253 a year. A core reason for this is, what is arguably, the
biggest barrier of entry for the banking industry, trust.

Because the industry deals with other people's money and financial information
new banks find it difficult to start up. Due to the nature of the industry people are
more willing to place their trust in big name, well known, major banks who they
consider to be trustworthy. The banking industry has undergone a consolidation in
which major banks seek to serve all of a customer’s financial needs under their roof
(this can clearly be seen in the business model of banks like Wells Fargo's). This
consolidation furthers the role of trust as a barrier to entry for new banks looking
to compete with major banks, as consumer are more likely to allow one bank to
hold all their accounts and service their financial needs.

Ultimately the barriers to entry are relatively low for the banking industry. While
it is nearly impossible for new banks to enter the industry offering the trust and full
range of services as a major bank, it is fairly easy to open up a smaller bank
operating on the regional level.

Power of Suppliers:
Capital is the primary resource on any bank and there are four major suppliers
(various other suppliers [like fees] contribute to a lesser degree) of capital in the
industry.
1. Customer deposits. 2. Mortgages and loans. 3. mortgage-backed securities. 4.
Loans from other financial institutions.

33
By utilizing these four major suppliers, the bank can be sure that they have the
necessary resources required to service their customers' borrowing needs while
maintaining enough capital to meet withdrawal expectations.
The power of the suppliers is largely based on the market, their power is often
considered to fluctuate between medium to high.

Power of Buyers:
The individual doesn't pose much of a threat to the banking industry, but one major
factor affecting the power of buyers is relatively high switching costs. If a person
has one bank that services their banking needs, mortgage, savings, checking, etc, it
can be a huge hassle for that person to switch to another bank.
To try and convince customers to switch to their bank they will often times lower
the price of switching, though most people still prefer to stick with their current bank.

The internet has greatly increased the power of the consumer in the banking
industry. The internet has greatly increased the ease and reduced the cost for
consumers to compare the prices of opening/holding accounts as well as the rates
offered at various banks.
ING Direct introduced high yield savings accounts to catch the buyers' attention,
then they went a step further and made it very easy for customers to transfer their
money from their current bank to ING. ING was successful in their attempt because
they managed to make switching costs very low in terms of time and capital.

Availability of Substitutes:
Some of the banking industry's largest threats of substitution are not from rival banks
but from non-financial competitors.
The industry does not suffer any real threat of substitutes as far as deposits or
withdrawals, however insurances, mutual funds, and fixed income securities are
some of the many banking services that are also offered by non-banking companies.
There is also the threat of payment method substitutes and loans are relatively high
for the industry. For example, big name electronics, jewelers, car dealers, and more
tend to offer preferred financing on "big ticket" items. Often times these non-
banking companies offer a lower interest rates on payments then the consumer would
otherwise get from a traditional bank loan.

34
Competitive Rivalry:
The banking industry is considered highly competitive. The financial services
industry has been around for hundreds of years, and just about everyone who needs
banking services already has them. Because of this, banks must attempt to lure
clients away from competitor banks. They do this by offering lower financing, higher
rates, investment services, and greater conveniences than their rivals. The banking
competition is often a race to determine which bank can offer both the best and
fastest services, but has caused banks to experience a lower ROA (Return on
Assets). Given the nature of the industry it is more likely to see further consolidation
in the banking industry. Major Banks tend to prefer to acquire or merge with other
banks than to spend money marketing and advertising.

35
 CHAPTER 2

2. INTRODUCTION TO COMPANY

36
Banks which provide good mobile banking service in India
1. Axis mobile
2. ICICI mobile banking
3. HDFC bank mobile banking
4. State bank anywhere
5. Kotak bank
6. Bank of baroda m-connect

Axis Bank
Axis Bank Ltd is the third largest of the private-sector banks in India offering a
comprehensive suite of financial products. The bank has its head office in Mumbai
and Registered office in Ahmedabad. It has 3304 branches, 14,003 ATMs, and nine
international offices. The bank employs over 55,000 people and had a market
capitalization of ₹1.28 trillion (US$20 billion) (as on March 31, 2017). It offers the
entire spectrum of financial services large and mid-size corporates, SME, and retail
businesses.
As of 30 Jun. 2016, 30.81% shares are owned by promoters & promoter group
(United India Insurance Company Limited, Oriental Insurance Company Limited,
National Insurance Company Limited, New India Assurance Company Ltd, GIC,
LIC & UTI). Remaining 69.19% shares are owned by Mutual Funds Institutions,
FIIs, Financial Institutions (banks), Insurance companies, corporate bodies &
individual investors among others.]
History
UTI Bank opened its registered office in Ahmedabad and corporate office in
Mumbai in December 1993. The first branch was inaugurated on 2 April 1994 in
Ahmedabad by Dr. Manmohan Singh, the Finance Minister of India. UTI Bank
began its operations in 1993, after the Government of India allowed new private
banks to be established. The Bank was promoted in 1993 jointly by the
Administrator of the Unit Trust of India (UTI-I),Life Insurance Corporation of India

37
(LIC), General Insurance Corporation, National Insurance Company, The New India
Assurance Company, The Oriental Insurance Corporation and United India
Insurance Company.
In 2001 UTI Bank agreed to merge with and amalgamate Global Trust Bank, but the
Reserve Bank of India (RBI) withheld approval and nothing came of this. In 2004
the RBI put Global Trust into moratorium and supervised its merger into Oriental
Bank of Commerce.
In 2003 UTI Bank became the first Indian bank to launch the travel currency card.
In 2005, UTI bank got listed on London Stock Exchange.
UTI Bank opened its first overseas branch in 2006 Singapore. That same year it
opened a representative office in Shanghai, China. UTI Bank opened a branch in the
Dubai International Financial Centre in 2007. That same year it began branch
operations in Hong Kong. In 2008 it opened a representative office in Dubai.
With effect from July 30, 2007, UTI Bank changed its name to Axis Bank.
Axis Bank opened a branch in Colombo in October 2011, as a Licensed Commercial
Bank supervised by the Central Bank of Sri Lanka. Also in 2011, Axis Bank opened
a representative offices in Abu Dhabi. In 2011, Axis bank inaugurated Axis House,
its new corporate office in Worli, Mumbai.
In 2013, Axis Bank's subsidiary, Axis Bank UK commenced banking operations.
Axis Bank UK has a branch in London.
Deepika Padukone, a Mumbai Film Industry (a.k.a. Bollywood ) actress is the brand
ambassador of Axis Bank.
In 2015, Axis Bank opens its representative office in Dhaka.The bank has over
50,000 employees (as of 31 March 2016). The bank incurred ₹26.7 billion
(US$410 million) on employee benefits during the FY 2012–13. The average age of
an Axis Bank employee is 29 years. The attrition rate in Axis Bank is approx. 9%
per year.

icici bank

CICI Bank, stands for Industrial Credit and Investment Corporation of India, it is
an Indian multinational banking and financial services company headquartered in
Mumbai, Maharashtra, India, with its registered office in Vadodara. In 2017, it is the
third largest bank in India in terms of assets and fourth in term of market
capitalisation. It offers a wide range of banking products and financial services for
corporate and retail customers through a variety of delivery channels and specialised
38
subsidiaries in the areas of investment banking, life, non-life insurance, venture
capital and asset management. The bank has a vast network of 4,850 branches[3] and
14,404 ATMs. in India, and has a presence in 19 countries including India.
The bank has subsidiaries in the United Kingdom and Canada; branches in United
States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, Oman, Dubai
International Finance Centre, China[6] and South Africa and representative offices in
United Arab Emirates, Bangladesh, Malaysia and Indonesia. The company's UK
subsidiary has also established branches in Belgium and Germany.
ICICI's shareholding in ICICI Bank was reduced to 46 percent, through a public
offering of shares in India in 1998, followed by an equity offering in the form of
American Depositary Receipts on the NYSE in 2000. ICICI Bank acquired the Bank
of Madura Limited in an all-stock deal in 2001 and sold additional stakes to
institutional investors during 2001-02.
In the 1990s, ICICI transformed its business from a development financial institution
offering only project finance to a diversified financial services group, offering a wide
variety of products and services, both directly and through a number of subsidiaries
and affiliates like ICICI Bank. In 1999, ICICI became the first Indian company and
the first bank or financial institution from non-Japan Asia to be listed on the NYSE.
In 2000, ICICI Bank became the first Indian bank to list on the New York Stock
Exchange with its five million American depository shares issue generating a
demand book 13 times the offer size.
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the
merger of ICICI and two of its wholly owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with ICICI
Bank. The merger was approved by shareholders of ICICI and ICICI Bank in
January 2002, by the High Court of Gujarat at Ahmedabad in March 2002 and by
the High Court of Judicature at Mumbai and the Reserve Bank of India in April
2002.
In 2008, following the 2008 financial crisis, customers rushed to ICICI ATMs and
branches in some locations due to rumours of adverse financial position of ICICI
Bank. The Reserve Bank of India issued a clarification on the financial strength of
ICICI Bank to dispel the rumours.

39
HDFC (Housing Development Financial Corporation) Bank Limited is an
Indian banking and financial services company headquartered in Mumbai,
Maharashtra. It has 84,325 employees and has a presence in Bahrain, Hong Kong
and Dubai. HDFC Bank is India’s largest private sector lender by assets. It is the
largest bank in India by market capitalization as of February 2016. It was ranked
69th in 2016 BrandZ Top 100 Most Valuable Global Brands

In 1994 HDFC Bank was incorporated, with its registered office in Mumbai, India.
Its first corporate office and a full service branch at Sandoz House, Worli were
inaugurated by the then Union Finance Minister, Manmohan Singh.
As of June 30, 2017, the bank's distribution network was at 4,715 branches and
12,260 ATMs across 2,657 cities and towns. The bank also installed 4.30 Lacs POS
terminals and issued 235.7 Lacs debit cards and 85.4 Lacs credit card in FY 2017.[

State Bank of India (SBI) is an Indian multinational, public sector banking and
financial services company. It is a government-owned corporation with its
headquarters in Mumbai, Maharashtra. On April 1, 2017, the State Bank of India,
which was India's largest bank, merged with five of its associate banks (State Bank
of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of
Patiala and State Bank of Travancore), and with the Bharatiya Mahila Bank. This
was the first ever large scale consolidation in the Indian banking industry. With the
merger, SBI became one of the 50 largest banks in the world (balance sheet size of
₹33 trillion, 278,000 employees, 420 million customers, and more than 24,000
branches and 59,000 ATMs). SBI's market share was projected to increase to 22
percent from 17 per cent.[5] It has 198 offices in 37 countries; 301 correspondents in
72 countries. The company is ranked 232nd on the Fortune Global 500 list of the
world's biggest corporations as of 2016.
The bank descends from the Bank of Calcutta, founded in 1806, via the Imperial
Bank of India, making it the oldest commercial bank in the Indian subcontinent. The
Bank of Madras merged into the other two "presidency banks" in British India, the
Bank of Calcutta and the Bank of Bombay, to form the Imperial Bank of India, which
in turn became the State Bank of India in 1955. The Government of India took
control of the Imperial Bank of India in 1955, with Reserve Bank of India (India's
central bank) taking a 60% stake, renaming it the State Bank of India. In 2008, the
government took over the stake held by the Reserve Bank of India.[

40
The State Bank of India has 20% market share in deposits and loans among Indian
commercial banks.[

Kotak Mahindra Bank is an Indian private sector bank headquartered in Mumbai,

Maharashtra, India. In February 2003, Reserve Bank of India (RBI) gave the licence
to Kotak Mahindra Finance Ltd., the group's flagship company, to carry on banking
business.
It offers a wide range of banking products and financial services for corporate and
retail customers through a variety of delivery channels and specialized subsidiaries
in the areas of personal finance, investment banking, general insurance, life
insurance, and wealth management.
Kotak Mahindra Bank has a network of 1,369 branches across 689 locations and
2,163 ATMs in the country (as of 31 March 2017). In 2016, it was the fourth largest
private bank in India by market capitalization
history

In 1985 Uday Kotak established what became an Indian financial services

conglomerate. In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the
Group's flagship company, received a banking licence from the Reserve Bank of
India (RBI). With this, KMFL became the first non-banking finance company in
India to be converted into a bank – Kotak Mahindra Bank Limited (Kmb)ltd.
In a study by Brand Finance Banking 500, published in February 2014 by Banker
magazine (from The Financial Times stable), KMBL was ranked 245th among the
world's top 500 banks with brand valuation of around half a billion dollars ($481
million) and brand rating of AA+.

Bank of Baroda (BoB) is an Indian state-owned International banking and financial

services company headquartered in Vadodara (earlier known as Baroda) in Gujarat,
India. It has a corporate office in Mumbai.
Based on 2017 data, it is ranked 1145 on Forbes Global 2000 list. BoB has total
assets in excess of ₹ 3.58 trillion (making it India’s 2nd biggest bank by assets) a
network of 5538 branches in India and abroad, and 10441 ATMs as of July, 2017.
The bank was founded by the Maharaja of Baroda, Maharaja Sayajirao Gaekwad III
on 20 July 1908 in the Princely State of Baroda, in Gujarat. The bank, along with 13

41
other major commercial banks of India, was nationalised on 19 July 1969, by the
Government of India and has been designated as a profit-making public sector
undertaking (PSU).
In 2015, Bank of Baroda officials recently stumbled upon illegal transfers of a
whopping ₹6,172 crore (US$950 million) in foreign exchange, made to Hong Kong
through newly opened accounts in the bank's Ashok Vihar branch.
As many as 10 banks have been merged with Bank of Baroda during its journey so
far.

 Hind Bank Ltd (1958)

 New Citizen Bank of India Ltd (1961)
 Surat Banking Corporation (1963)
 Tamil Nadu Central Bank (1964)
 Umbergaon People Bank (1964)
 Traders Bank Limited (1988)
 Bareilly Corporation Bank Ltd (1998)
 Benares State Bank Ltd (2002)
 South Gujarat Local Area Bank Ltd (2004)
 Memon Cooperative Bank Limited (2011)

History
In 1908, Maharaja Sayajirao Gaekwad III, set up the Bank of Baroda (BoB)
with other stalwarts of industry such as Sampatrao Gaekwad, Ralph
Whitenack, Vithaldas Thakersey, Tulsidas Kilachand and NM Chokshi. Two
years later, BoB established its first branch in Ahmedabad. The bank grew
domestically until after World War II. Then in 1953 it crossed the Indian
Ocean to serve the communities of Indians in Kenya and Indians in Uganda
by establishing a branch each in Mombasa and Kampala. The next year it
opened a second branch in Kenya, in Nairobi, and in 1956 it opened a branch
in Tanzania at Dar-es-Salaam. Then in 1957 BoB took a giant step abroad by
establishing a branch in London. London was the center of the British
Commonwealth and the most important international banking center. In 1958
BoB acquired Hind Bank (Calcutta; est. 1943), which became BoB's first
domestic acquisition.

42
 2.2 BENEFITS OF THE STUDY

Change in Consumer Experience after using Mobile Banking Services. Before the
financial crisis, banking industry gained customer trust through easy financing. After
the crisis, regulations have become strict about various banking facilities which are
forcing banks to identify different sources of value creation. Digital banking is one
of the examples. Use of technology pushes banks to increase customer relationship
and build trust. However, introduction of technology in banking is always a widen
issues as banks have been relatively slow in implementing changes due to various
regulatory compliances (DeLaCastro et.al. 2014). Banks need to focus more on these
issues to attract customers.However, as per the current trends customer’s confidence
and trust is increasing on their financial service providers. Survey showed that 33
percent of customers have gained confidence in last 12 years and customer’s
confidence loss has been declined by 40 percent as compared to last year. After the
introduction of online and mobile banking facility, it has been become point of
differentiation among various banks. Integration of technology especially mobile in
banking witnessed arrival of new customers in the data base and has impact on
banking revenue (Schlich, 2014).

Mobile banking not only offers facilities like balance check, or do transactions they
are also affecting customer behavior. Integration of banking with their personal
mobile devices, customers are engaging themselves in apps more than ever. Reason
behind this is mobile apps allow customers to avail banking facilities without
physical presence in branch. Customers can also handle their money with a click.
This facility is encouraging customers to use mobile banking and provide real life
experience. They can carry out their key transactions on Smartphones to save cost
and time. Mobile banking is convenient for them to use and is being used on a regular
basis. The habitual use of these apps helps banks to have consumer on their display
30-40 times in a month (Jones, 2015). In this paper, we tried to identify customer’s
experience and change in attitude after using mobile banking transactions. Result
supports the literature on customer’s attitude with mobile banking. To determine the
attitude of users about adoption of mobile banking, many researchers have been done
to identify factors that determine the acceptance of customers of mobile banking.

Adoption of mobile banking and acceptance depends on the customers trust (Singh,
Srivastava, & Srivastav, 2010; Kim, Shin, & Lee, 2007). They concluded that
effectiveness of mobile banking services, fraudprevention and secure privacy
encourage customers to increase (continue to use) mobile banking transactions
(Nayak, Nath & Goel, 2014).

43
CHAPTER 3

44
3.1 Brief Literature Review

Rangan, V. Kasturi and Lee, Katharine L., (2012), “Mobile Banking for the
Unbanked “,
The case describes in detail the workings of two mobile banking operators in Africa
WIZZIT in South Africa and M-PESA in Kenya. It explores the dimensions of
strategy that make for success in the market for the unbanked. It raises questions
regarding the portability of the model to other countries and settings.

V. Raja, Joe A. (2012), “Global e-banking scenario and challenges in banking

system”,
This paper is an attempt to explore the various levels of internet banking services
provided by banks using the secondary data. It also compares the traditional banking
systems with net banking. It lists out the various advantages of internet banking and
the successful security measures adopted by different banks for secured banking
transactions. It also analyzes how E-banking can be useful for banking industry
during this global financial melt down.

Van B., Paul, Veloso, Francisco M. and Oliveira, P., (2012), “ Innovation by
Users in Emerging Economies: Evidence from Mobile Banking Services”,
This paper examined the extent to which users in emerging economies innovate, and
whether these innovations are meaningful on a global stage. To study this issue, the
researcher conducted an empirical investigation into the origin and types of
innovations in financial services offered via mobile phones, a global, multi-billion
dollar industry where emerging economies play an important role. The researcher
used the complete list of mobile financial services, as reported by the GSM
Association (GSMA), and collected detailed histories of the development of the
services and their innovation process. Analysis of this study shows that 85% of the

45
innovations in this field originated in emerging markets. The researcher also
conclude that at least 50% of all mobile financial services were pioneered by users,
approximately 45% by producers, and 5% jointly by users and producers.
Additionally, services developed by users diffused at more than double the rate of
producer-innovations. Finally, the researcher observed that threequarters of the
innovations that originated in emerging markets have already diffused to OECD
countries and that the (user) innovations are therefore globally meaningful.

Nel J., Boshoff C., Raleting T., (2012), “Exploiting the technology cluster effect
to enhance the adoption of WIG mobile banking among low-income earners”
This study investigated the attitude formation of low-income, non-users of Wireless
Internet Gateway (WIG) mobile banking, by including use of the Short Message
Services (SMS) as a moderator of attitude formation. A non-probability sample of
465 South African non-users of mobile banking was drawn and clustered into High
users and Low users of the SMS, based on the average number of text messages sent
in a week. The moderating effect of "use of the SMS" was investigated by means of
a structural equation modelling multi-group analysis. The findings revealed that the
influence of Ease of use on Attitude and of Self-efficacy on Ease of use were stronger
for High users and significantly different from Low users, while the opposite was
true for the influence of Facilitating conditions on Usefulness.

Oliveira P., Eric V. H., (2011), “Users as service innovators:

The case of banking services” Fond that 55% of today's computerized commercial
banking services were first developed and implemented by non-bank firms for their
own use, and 44% of today's computerized retail banking services were first
developed and implemented by individual service users rather than by commercial
financial service providers. Manual precursors to these services – manual procedures
that carried out functions similar to computerized services in our sample – were
almost always developed by users as self-services.

Mas I., Dan R., (2011), “Scaling Mobile Money”,

Retail payment systems require scale to get off the ground and struggle to grow
incrementally. This is due to three factors: (i) Network effects: when it comes to
payment systems, the value of joining a network is directly proportional to the
number of people already on it; (ii) Chicken-and-egg trap: in order to grow, these
systems must aggressively attract both customers and cash-in/cash-out merchants in
tandem, otherwise, merchants will stop offering the service due to low transaction
revenue and customers will not join the system because they cannot access a

46
convenient outlet; (iii) Trust: customers have to become comfortable going to non-
bank retail outlets to meet their cash-in/out needs and initiating transactions through
their mobile phones. Until a deployment serves a large number of customers, people
will lack trust in the new system, because they know few who can vouch for it. To
overcome these barriers, mobile money deployments need to reach a critical mass of
customers as quickly as possible, lest they get stuck in the ‗sub-scale trap‘. To do
this, they need to get three things right. First, they must create enough urgency in
customers‘ minds to learn about, try and use the service. Second, they must invest
heavily in above and below the line marketing to establish top of mind awareness of
(and trust in) the service among a large segment of the population. And, third, they
must incur considerable customer acquisition costs (beyond marketing and
promotion) to ensure that their cash-in/out merchants are adequately incentivized to
promote the service

Traynor P., Amrutkar C., Rao V., Jaeger T., McDaniel P., Porta T. L., (2011),
“From mobile phones to responsible devices”
Mobile phones have evolved from simple voice terminals into highly-capable,
generalpurpose computing platforms. While people are becoming increasingly more
dependent on such devices to perform sensitive operations, protect secret data, and
be available for emergency use, it is clear that phone operating systems are not ready
to become missioncritical systems. Through a pair of vulnerabilities and a simulated
attack on a cellular network, we demonstrate that there are a myriad of unmanaged
mechanisms on mobile phones, and that control of these mechanisms is vital to
achieving reliable use. Through such vectors, mobile phones introduce a variety of
new threats to their own applications and the telecommunications infrastructure
itself. In this paper, we examine the requirements for providing effective mediation
and access control for mobile phones. We then discuss the convergence of cellular
networks with the Internet and its impact on effective resource management and
quality of service. Based on these results, we argue for user devices that enable
predictable behavior in a network—where their trusted computing bases can protect
key applications and create predictable network impact.

Ahmed S. M, Shah J. R., Md. A. I., Samina M., (2011), “Problems and prospects
of mobile banking in Bangladesh”
This study revealed that 61 % respondents think it saves time than traditional
banking, the highest number of respondents use mobile banking for ‘Air-time top-
up’ service, that is 21%, out of 120 respondents 56% replied it is less costlier
than traditional banking, 100% respondents did agree that it is speedy, and 38%
respondents are upper class. Although this concept is new in Bangladesh but its

47
potentiality is high. From this research, other researchers and policy makers will get
an insight about the problems and prospects of mobile banking in Bangladesh.

Lin H. F. (2011), “An empirical investigation of mobile banking adoption: The

effect of innovation attributes and knowledge-based trust”,
This study developed a research model to examine the effect of innovation attributes
(perceived relative advantage, ease of use and compatibility) and knowledge-based
trust (perceived competence, benevolence and integrity) on attitude and behavioral
intention about adopting (or continuing to use) mobile banking across potential and
repeat customers. Based on a survey of 368 participants (177 for potential customers
and 191 for repeat customers), this study uses a structural equation modeling
approach to investigate the research model. The results indicate that perceived
relative advantage, ease of use, compatibility, competence and integrity significantly
influence attitude, which in turn lead to behavioral intention to adopt (or continue-
to-use) mobile banking. Additionally, by using multi-group analysis with t-statistics,
the results found that the antecedents of attitude toward mobile banking differ
between potential and repeat customers.

Mas I., (2011), “Capturing the Potential of M-Payments for the „Unbanked”,
This article discusses the potential of using mobile phones to greatly increase access
to financial services in developing countries, and reviews the main success factors
in a mobile banking project.

Dube T., Kosmas N., Collins M., Lloyd C., (2011), “Adoption And Use of
SMS/Mobile Banking Services in Zimbabwe: An Exploratory Study”
The findings showed that although SMS banking was first launched in 2004, the
service was still in its infancy. Evidence showed that accessibility and affordability
were the major drivers to the adoption of SMS banking. The research confirmed the
assertion that the appeal is more about accessibility and affordability in developing
countries. This has been exacerbated by the lack of regulation for electronic banking
in Zimbabwe. The study recommended an increased awareness campaign by banks
and development of policy and regulation for electronic banking in Zimbabwe.

Sudhakar A. M., Suryanarayana, (2011), “Emerging mobile banking scenario

and its adoption in India: a study”,
With broadband communication technological developments and mobile phones
penetration(481 million by June 2009) into common man's life have triggered major
thrust in the Banking service sector of India. With Mobile Banking- a revolutionary
approach to banking transactions has created a strong connectivity between
customers and the banks as both will transact with minimum cost and in minimum

48
time. It is a timely and its cost effective services can deliver mobile money to non-
banked poor people and will induce economic growth of the country. This article
discusses the status of Mobile Banking in India and other countries with emphasis
on data security and standards and its implication on banking sector.

Murillo R. H., Llobet G., Fuentes R. (2010) “Strategic online banking

adoption”,
Found out that bank-specific characteristics are important determinants of banks‘
adoption decisions, competition also plays a prominent role. The extent of
competition is related to the geographic overlap of banks in different markets and
their relative market share in terms of deposits. In particular, banks adopt online
banking services earlier in markets where their competitors have already adopted
this technology. This paper is one of the first to construct local banking markets
using the geographic market definitions delimited by the CASSIDI® Database
compiled at the Federal Reserve Bank of St. Louis.

Alain Y. C., Keng B. O., Binshan L., Boon I. T., (2010) "Online banking
adoption: an empirical analysis"
showed that perceived usefulness, trust and government support all positively
associated with the intention to use online banking in Vietnam. Contrary to the
technology acceptance model, perceived ease of use was found to be not significant
in this study.

Agarwal R., Rastogi S., Mehrotra A., (2009), “Customers‟ perspectives

regarding ebanking in an emerging economy”
Determining factors affecting customer perception and attitude towards and
satisfaction with e-banking is an essential part of a bank's strategy formulation
process in an emerging economy like India. To gain this understanding in respect of
Indian customers, the study was conducted on respondents taken from the northern
part of India. The major findings depict that customers are influenced in their usage
of e-banking services by the kind of account they hold, their age and profession,
attach highest degree of usefulness to balance enquiry service among e-banking
services, consider security & trust most important in affecting their satisfaction level
and find slow transaction speed the most frequently faced problem while using e-
banking.

49
Khan M. S., Mahapatra S. S., (2009), “Service quality evaluation in internet
banking: an empirical study in India”
Demographic analysis of data reveals that gender is hardly a bias for use and
evaluation of service quality of i-banking in most of the cases across various
categories of customers. A valid mathematical model is proposed to assess the
overall service quality using regression analysis. The results show that customers are
satisfied with quality of service on four dimensions such as reliability, accessibility,
privacy/security, responsiveness and fulfilment, but least satisfied with the 'user-
friendliness' dimension. The empirical findings not only prioritise different
parameters but also provide guidelines to bankers to focus on the parameters on
which they need to improve. The analysis showed that three variables (relative
benefits, propensity to trust and structural assurances) had a significant effect on
initial trust in mobile banking. Also, the perception of initial trust and relative
benefits was vital in promoting personal intention to make use of related services.
However, contrary to our expectation, the reputation as a firm characteristics
variable failed to attract people to mobile banking.

Crabbe M., Standing C., Standing S., Karajaluoto, (2009), “An adoption model
for mobile banking in Ghana”
The impact of social and cultural factors on the adoption of technology still requires
much research. To investigate it more fully, we examine the reasons for the adoption
and non-adoption of mobile banking in Ghana. Through a survey of 271 people in
Ghana, it has been found that social and cultural factors in the form of perceived
credibility, facilitating conditions, perceived ulitisation and demographic factors do
play a significant role in adoption decisions. It has been found that ulitisation of
technology and services can be a positive influence for adopters whilst being a
negative influence for nonadopters. In addition, perceived credibility and facilitating
conditions also influence attitudes towards the technology. When these factors are
added to a range of demographic factors, the impact of the social and cultural
features of the context of studies can be seen as significant.

Yang A. S., (2009), “Exploring adoption difficulties in mobile banking services”

Factors associated with adopting and resisting mobile banking technologies were
investigated among university students in Taiwan. Adoption factors included the
belief that mobile banking helps fulfill personal banking needs, provides location-
free conveniences, and is cost effective. The primary factors associated with
resistance included concerns over system configuration security and basic fees for

50
mobile banking web connections. The theoretical and applied implications of these
findings are discussed.

Shanker, D., Singh, H. and Wadud, M. (2008), “A comparative study of banking

in China and India, nonperforming loans and the level playing field”
It has become common in literature to compare India and China two remarkably
growing economies but these comparisons often do not take into account the
institutional differences between two countries. We have in this paper done a
comparative analysis of banking institutions in China and India taking into accounts
the contentious issue of nonperforming loans along with the issue of use of banks to
provide counter vailable subsidies to exporting organizations. Our research shows
that the efficiency differences between banks in these two countries can be directly
related to institutional difference between two countries and any comparative study
between two countries not taking into consideration these institutional differences
may lead to misleading results.

Petrus G., Nelson O. N., (2006) "Borneo online banking: evaluating customer
perceptions and behavioural intention", The results indicate that perceived
usefulness and perceived ease of use are strong determinants of behavioural
intention to adopt online banking. There is also an indirect effect of computer self-
efficacy and prior general computing experience on behavioural intention through
perceived usefulness and perceived ease of use.

Kari P., Tero P., Heikki K., Seppo P., (2006) "The measurement of end-user
computing satisfaction of online banking services: empirical evidence from
Finland",
The survey results support three constructs (content, ease of use, accuracy) from the
original model, indicating that the modified EUCS model labelled EUCS2 can be
utilized in analyzing user satisfaction with online banking among private customers.

Sylvie L., Xiaoyan L., (2005) "Consumers‟ attitudes towards online and mobile
banking in China",
The results showed Chinese online and mobile bank users were predominantly
males, not necessarily young and highly educated, in contrast with the electronic
bank users in the West. The issue of security was found to be the most important
factor that motivated Chinese consumer adoption of online banking. Main barriers
to online banking were the perception of risks, computer and technological skills and
Chinese traditional cash-carry banking culture. The barriers to mobile banking
adoption were lack of awareness and understanding of the benefits provided by
mobile banking.

51
Walfried M. L., Chris M., Sharon S. L., (2005) "The relationship between
consumer innovativeness, personal characteristics, and online banking
adoption", While results confirm the positive relationship between internet related
innovativeness and online banking they also surprisingly show that general
innovativeness is negatively related to online banking.
Luarn P., Lin H. H. (2005), “Toward an understanding of the behavioral
intention to use mobile banking”,
Although millions of dollars have been spent on building mobile banking systems,
reports on mobile banking show that potential users may not be using the systems,
despite their availability. Thus, research is needed to identify the factors determining
users' acceptance of mobile banking. While there has been considerable research on
the technology acceptance model (TAM) that predicts whether individuals will
accept and voluntarily use information systems, limitations of the TAM include the
omission of an important trust-based construct in the context of electronic/mobile
commerce, and the assumption that there are no barriers preventing an individual
from using an IS if he or she chooses to do so. Based on literature relating to the
theory of planned behavior (TPB) and the TAM, this study extends the applicability
of the TAM in a mobile banking context, by adding one trust-based construct
(―perceived credibility‖) and two resource-based constructs (―perceived self-
efficacy‖ and ―perceived financial cost‖) to the model, while paying careful
attention to the placing of these constructs in the TAM's existing nomological
structure. Data collected from 180 users in Taiwan were tested against the extended
TAM, using the structural equation modeling approach. The results strongly support
the extended TAM in predicting users' intentions to adopt mobile banking. Several
implications for IT/IS acceptance research and mobile banking management
practices are discussed.

Laukknen T., Lauronen J. (2005), “Consumer value creation in mobile banking

services”
The paper presents findings of the study that explored consumer value creation in
various mobile banking services. New electronic channels are replacing the more
traditional ones. Mobile devices represent the recent development in electronic
service distribution. An exploratory study was conducted on experienced electronic
banking customers by using a qualitative in-depth interviewing method. The
findings increase the understanding of customer-perceived value and value creation
on the basis of attributes of mobile services and customer-perceived disadvantages
of mobile phones in electronic banking context. The findings allow practitioners to
improve their services and marketing strategies and pass on information to the
academics about interesting future research areas.

52
Suoranta M., Mattila M. (2004), “Mobile banking and consumer behaviour:
New insights into the diffusion pattern”,
Provided an indication of the characteristics of potential subsequent adopters of
mobile banking, and of differences between user segments. Consequently, the
authors are able to comment on the influence of certain demographic characteristics
and the preferred communication mode of customers on the adoption and future
usage of mobile banking services. The quantitative survey that sheds more light on
this researched issue employed a traditional method of postal questionnaire. The data
were collected in Finland during May–July 2002 and include 1,253 survey
responses.

Avinandan M., Prithwiraj N., (2003) "A model of trust in online relationship
banking",
Observed that shared value is most critical to developing trust as well as relationship
commitment. Communication has a moderate influence on trust, while opportunistic
behaviour has significant negative effect. Also finds higher perceived trust to
enhance significantly customers‘ commitment in online banking transaction. An
important contribution concerns how trust is developed and sustained over different
levels of customer relationship in online banking. The future commitment of the
customers to online banking depends on perceived trust.

Sarel D., Howard M. (2003), “Marketing online banking services: The voice of
the customer”,
Revealed significant differences in attitudes and opinions between early users and
those that banks hope will adopt next. Most importantly, future prospects could be
characterised as indifferent about online banking; many were not convinced about
its benefits and the value it provides. While the potential to expand the market for
online banking services exists, banks need to re-examine their marketing approach.

Heikki K., Minna M., Tapio P., (2002) "Factors underlying attitude formation
towards online banking in Finland",
The study explored the effect of different factors affecting attitude formation
towards Internet banking (online banking) in Finland. The purpose of this paper is
to determine those factors that influence the formation of attitude towards Internet
banking on the one hand, and their relation to the use of online banking services, on
the other. To attain these, a large survey (1,167 responses) was carried out during
the summer of 2000 in Finland. Attitude formation was studied by the use of a
structural equation model. The results are expected to provide both theoretical and

53
practical contributions in the area of electronic retail banking and understanding of
consumer behaviour in the turbulent financial services industry.

Aladwani A. M. (2001), “Online banking: a field study of drivers, development

challenges, and expectations”,
The results of a quantitative study of the perceptions of banks‘ executive and IT
managers and potential customers with regard to the drivers, development
challenges, and expectations of online banking. The findings will be useful for both
researchers and practitioners who seek to understand the issues relevant toon line
banking.
Chou D. C., Chou A. Y. (2000), “A Guide to the Internet Revolution in
Banking”,

shown that Banking is an industry that is expected to undergo drastic change because
of the E-commerce revolution. This article maps out the direction of the Internet
revolution in banking by surveying the phenomenon's history, its technological
development, and associated managerial and technological issues.

Furst, K., Lang, William W. and Nolle, D. E., (2000) “Internet Banking:
Developments and Prospects”,
Addresses significant gaps in existing knowledge about the Internet banking
landscape. Using information drawn from a survey of national bank examiners, we
find that while only 20 percent of national banks offered Internet banking in Q3
1999, these transactional Internet banks accounted for almost 90 percent of national
banking system assets and 84 percent of the total number of small deposit accounts.
All of the largest national banks offered Internet banking, but only about 7 percent
of the smallest banks offered it. Among institutions offering Internet banking, large
banks are more likely than small banks to offer a broad range of services on the
Internet. Matching call report data to the examiner survey information, we also find
that banks in all size categories offering Internet banking tend to rely less on interest-
yielding activities and deposits than do non-Internet banks, and institutions with
Internet banking outperformed non-Internet banks in terms of profitability. Excepted
from the superior performance of Internet banks versus non-Internet banks are de
novo Internet banks, which were less profitable and less efficient than non-Internet
de novos. Projections based on banks‘ plans as of Q3 1999 indicate that 45 percent
of all national banks will be offering Internet banking by the beginning of 2001.
While most of the growth in new Internet banking will be due to small banks coming
online, almost half of all national banks had no plans to offer Internet banking. Large
banks have more aggressive plans to offer business Internet banking services in the
future than small institutions.

54
Milind S., (1999) "Adoption of Internet banking by Australian consumers: an
empirical investigation",
Shows that security concerns and lack of awareness about Internet banking and its
benefits stand out as being the obstacles to the adoption of Internet banking in
Australia. Suggested some of the ways to address these impediments. Further
suggests that delivery of financial services over the Internet should be a part of
overall customer service and distribution strategy. These measures could help in
rapid migration of customers to Internet banking, resulting in considerable savings
in operating costs for banks.

Madhukar G. Angur, R. N., John S. Jahera Jr, (1999) "Service quality in the
banking industry:
An assessment in a developing economy", examines the applicability of alternative
measures of service quality in the developing economy of India and assesses related
issues in that context. Based on data gathered from customers of two major banks,
overall results support a multidimensional construct of service quality and suggest
that the SERVQUAL scale provides greater diagnostic information than the
SERVPERF scale. However, the five-factor conceptualization of SERVQUAL does
not seem to be totally applicable, and no significant difference was found in the
predictive ability of the two measures. Further, although SERVQUAL and
SERVPERF have identical convergent validity, SERVPERF appears to have higher
discriminant validity than SERVQUAL.

Parkar P. M., Roller L. H., (1997), “Collusive Conduct in Duopolies:

Multimarket Contact and Cross-Ownership in the Mobile Telephone Industry”
With the deregulation of the telecommunications industry, a variety of industry
structures have been created in hopes of increasing competition. One example is the
licensing of cellular telephone services in the United States, where the FCC created
duopolies in which two firms were granted licenses to compete in strictly defined
product and geographic markets. Taking advantage of the unique regulatory
environment, we test to what degree duopolistic competition leads to competitive
market outcomes. We find that cross-ownership and multimarket contact are
important factors in explaining noncompetitive prices.

Michel D., (1997) "The Efficiency of French Banking Industry",

Major structural changes have affected the French banking industry during the
second half of the 1980s, what suggests that the French banks were operating with a

55
significant level of inefficiencies before this period. The purpose of this study is to
present estimates of X-Efficiencies and Scale-Efficiencies in French banks for the
1988–1992 period which followed this wave of changes. The data are annual
accounting data for corporate, mutual and savings banks. The sample contains 375
depository banks. By using the ―distribution free‖ method of efficiency estimation,
our estimations show that average X-efficiencies of the French banks are in the range
of 70% to 90%. Our results confirm also the existence of scale economies in French
banking industry. Scale efficiency estimates show clearly that French banks could
reduce average costs by about 15% on average by increasing size in order to reach
the efficient size. Note that this result is also in conformity with the hypothesis that
some excess capacity could exist in French banking industry.

Binswanger H. P., Khandker S. R., (1995), “The impact of formal finance on

the rural economy of India”
India's supply‐led approach to agricultural credit paid off in non‐farm growth,
employment and rural wages. The impact of expanded credit on agricultural output
has been modest, and the benefits of agricultural income exceed the costs of the
programme only if optimistic assumptions are made about repayment rates on farm
credit.

Mobile banking adoption

Electronic commerce (e-commerce) continues to have a profound impact on the
global business environment, but technologies and applications also have begun to
focus more on mobile computing, the wireless Web, and mobile commerce. Against
this backdrop, mobile banking (m-banking) has emerged as an important distribution
channel, with considerable research devoted to its adoption. However, this research
stream has lacked a clear roadmap or agenda. Therefore, the present article analyzes
and synthesizes existing studies of m-banking adoption and maps the major theories
that researchers have used to predict consumer intentions to adopt it. The findings
indicate that the m-banking adoption literature is fragmented, though it commonly
relies on the technology acceptance model and its modifications, revealing that
compatibility (with lifestyle and device), perceived usefulness, and attitude are the
most significant drivers of intentions to adopt m-banking services in developed and
developing countries. Moreover, the extant literature appears limited by its narrow
focus on SMS banking in developing countries; virtually no studies address the use
of m-banking applications via smartphones or tablets or consider the consequences
of such usage. This study makes several recommendations for continued research in
the area of mobile banking.
56
A review for mobile commerce research and applications
Although a large volume of literature is available on mobile commerce (m-
commerce), the topic is still under development and offers potential opportunities
for further research and applications. Since the subject is at the stage of development,
a review of the literature on m-commerce with the objective of bringing to the fore
the state-of-art in m-commerce research and applications will initiate further
research on the growth of m-commerce technologies. This paper reviews the
literature on m-commerce and applications using a suitable classification scheme to
identify the gap between theory and practice and future research directions. The 149
m-commerce articles are classified and the results of these are presented based on a
scheme that consists of five distinct categories: m-commerce theory and research,
wireless network infrastructure, mobile middleware, wireless user infrastructure,
and m-commerce applications and cases. A comprehensive list of references is
presented. We hope that the findings of this research will provide useful insights into
the anatomy of m-commerce literature and be a good source for anyone who is
interested in m-commerce. The paper also provides some future directions for
research.

Supporting mobile decision making with association rules and multi-layered

caching
Navin Kumar, Aryya Gangopadhyay, George Karabatis
We describe a methodology and a prototype implementation of an online analytical
processing system for mobile devices. The system guides the user to narrow down
the search space using association rules. We also describe multi-layered caching
techniques to improve performance and increase system utilization even in the
presence of disconnections. The system is built using a three-tier architecture
comprising of a data warehouse, a middle-tier server, and client mobile devices.
Finally we conducted a series of simulation experiments to evaluate the performance
of our association rule-based system and the multi-layered caching
57
Past, present and future of mobile payments research
The mobile payment services markets are currently under transition with a history
of numerous tried and failed solutions, and a future of promising but yet uncertain
possibilities with potential new technology innovations. At this point of the
development, we take a look at the current state of the mobile payment services
market from a literature review perspective. We review prior literature on mobile
payments, analyze the various factors that impact mobile payment services markets,
and suggest directions for future research in this still emerging field. To facilitate the
analysis of literature, we propose a framework of four contingency and five
competitive force factors, and organize the mobile payment research under the
proposed framework. Consumer perspective of mobile payments as well as technical
security and trust are best covered by contemporary research. The impacts of social
and cultural factors on mobile payments, as well as comparisons between mobile
and traditional payment services are entirely uninvestigated issues. Most of the
factors outlined by the framework have been addressed by exploratory and early
phase studies.

58
Integrating TTF and UTAUT to explain mobile banking user adoption
Due to its advantages such as ubiquity and immediacy, mobile banking has attracted
traditional banks’ interests. However, a survey report showed that user adoption of
mobile banking was much lower than that of other mobile services. The extant
research focuses on explaining user adoption from technology perceptions such as
perceived usefulness, perceived ease of use, interactivity, and relative advantage.
However, users’ adoption is determined not only by their perception of the
technology but also by the task technology fit. In other words, even though a
technology may be perceived as being advanced, if it does not fit users’ task
requirements, they may not adopt it. By integrating the task technology fit (TTF)
model and the unified theory of acceptance and usage of technology (UTAUT), this
research proposes a mobile banking user adoption model. We found that
performance expectancy, task technology fit, social influence, and facilitating
conditions have significant effects on user adoption. In addition, we also found a
significant effect of task technology fit on performance expectancy.

Mobile Banking Adoption: Application of Diffusion of Innovation Theory

Many banks in Saudi Arabia are starting to offer banking services through mobile
phones. However, not many studies investigate the factors that may help the bankers
to design mobile services, which are suitable for and adoptable by bank customers.
This study fills this gap and examines a number of factors affecting the mobile
banking adoption. Using Diffusion of Innovation as a baseline theory, data are
obtained from 330 actual mobile banking users. It is found that relative advantage,
compatibility, and observability have positive impact on adoption. Contrary to the
findings in extant literature, trialability and complexity have no significant effect on
adoption. Perceived risk has a negative impact on adoption. The findings of this
study will have practical implications for banking industry in Saudi Arabia.

59
 3.2 Scope of the study

Banks in India. The various products and services offered by it include:

PRODUCT

• Deposits (Saving account and current account) 50

• Loans
• Card

SERVICES

• ATM
• Mobile Banking
• Internet Banking
• Payment
• Other Services The deposit mix of an organization especially the Saving
accounts are the backbone of every bank as an ordinary man is most inclined to
invest in it due to its convenience and easy availability. This project deals with
the various customer concerns regarding these and tries to suggest appropriate
suggesting based on conclusions.
I hope that this report would be able to suggest some measures and draw
attention of bank towards the area of improvement.

 The scope and key assumptions are only concentrating about consumer
area and perception toward mobile banking. In this study, 100 people will
be choosing to answer the questionnaire and this research will focus on
employees and businessman
 The research will focus on employees because they might have the
experience to use the mobile banking to check the account balance after
their employer pays them the salaries.
 Besides, some of the employees, especially from 18 years old to 30 years
old, they also prefer to do online shopping. It is because they like to
expenditures on fashion item, include apparel and accessories through
online shopping.
60
  Previously, customers need to make payment through the internet
banking.
 But, through the enhancement of banking services, many customers have
chosen to make the payment through the mobile banking.

3.3 Objective of the study

Banking and finance can be called as the nerves of any economic system as they
accelerate the process of economic development through canalization of adequate
finace. It is hard to anticipate development of efficient banking services in the
country. No doubt financial institutions play so important in economic development
but at the some time economic development determines the growth and development
of banking institutions the role of various kind of banking institution. In economic
development need not be emphasized. Main objective of the study is to “Critical
appraisal of product & services offered by axis bank.” Some of the major objectives
of the study include the determination of the following:

 To undertake a macro level comparative analysis on various mobile banking

applications
 To compare various mobile banking application in India
 To know developments in mobile banking sector
 To know the better services provided by banks in India

61
CHAPTER 4

62
 4.1 Research Methodology

Secondary data: This shall be collected by using a verity of sources. These sources
are: Publications of Public sector banks RBI reports Journals Of banking
and finance Web site of RBI In the present study, sample is divided into two
subgroups based on service users opinion regarding e-banking based on the PSBs.
Service users are selected randomly from the respective banks. The stratified random
sampling technique is used for selection of service users for collecting data from
Pune City for the study purpose. This method is used to make research procedure
faster by obtaining a large number of accomplished questionnaires rapidly and
efficiently. This helps to choose the banking sector in Pune City and their websites.
These websites help to get all essential information of the E-banking services. The
selected public sector banks operating in Pune City in form the universe of the study.
The survey of 200 E-banking service users of the selected Public sector banks has
been done. The required data has been collected from respondents through the well-
structured and pre-tested questionnaire.
Number of sample units is to be selected from stratum decided by the researcher in
advance. This number is known as quota which is fixed according to some specific
characteristics such as usage of E-banking services via - ATM, Internet and mobile.
Quota sampling technique is used for selecting E-banking service users for the
research purpose. From study area, 50 service users per bank have been selected.
The researchers applied their judgments in the choice of the sample and get the
required information quickly.

63
4.2

Data source Primary Data Questionnaire

Secondary Data Journals, periodicals

Newspapers & websites,
google, os platforms.

64
CHAPTER 5

65
5 Data Analysis and Interpretation
Secondary analysis
Comparison of mobile banking application

Top 6 apps NO. of Ios ratings Android Last year change

ratings rating rating

Axis mobile 293684 4.3 4.3 3.5 16%

ICICI mobile banking 871793 4.5 4.5 4.5 0%

HDFC bank mobile banking 188757 3.0 4.2 3.2 8%

State bank anywhere 375909 2.7 3.9 3.5 22%

Kotak bank 251269 3.0 4.4 2.9 16%

Bank of baroda m-connect 37087 3.4 4.1 2.2

Private sector banks: They have been aggressive in launching apps. To begin with,
every bank has an official banking app for basic transactions, and is focused on
existing customers. This can be useful if your primary account is with that bank, and
you use multiple products of the bank.

ICICI Bank Ltd has four apps—iMobile, Pockets, etfCheque and iBizz. “We have
noticed that Indian customers are digitally savvy and adopt easily. We believe with
more use of smartphones, more people will use mobile (phones) for transactions,”
said Rajiv Sabharwal, executive director, ICICI Bank.

iMobile is the official banking app, and offers services such as funds transfer,
account statement among others. Pockets is a digital wallet aimed at young
customers; it can be used by both the bank’s customers and others (even those who
don’t have a bank account). You can also get a physical card to transact. The

66
eftCheque app is only for cheque-based transactions—tracking, uploading scanned
images of the physical cheques, and seeing past debit transactions. iBizz app is
targeted at corporate customers. The bank had also launched a separate app, iLoans,
which has now been integrated with its main app, iMobile.

HDFC Bank Ltd has three apps—MobileBanking, Chillr and PayZapp. The official
banking app MobileBanking is also available in Hindi. The Chillr is a third-party
app, which allows you to send money from your bank account to a contact number.
If the recipient has the app, the money automatically goes into her account. If she
doesn’t have the app, she will get an SMS to download it and receive the money.
This service can be used by customers of any bank that offers Immediate Payment
Service (IMPS) platform. There are 134 banks on this platform.

Axis Bank Ltd has so far launched three apps—Axis Mobile, PingPay and Lime. “A
key challenge in the banking industry is rapidly evolving technology. We have seen
the adoption curves moving from bell shaped to a shark fin. It is imperative that we
do not directly place our bets on any particular technology and explore various
available options. For example, we have built our app on Android, iOS and Windows
platforms,” said Rajiv Anand, group executive and head (retail banking), Axis Bank.

Of the three apps, Lime is the most ambitious. It is a digital wallet that allows you
to store money and add money from any bank account, debit card and credit card.
You can use it to recharge your mobile phone, make bill payments and send money.
It allows you to compare prices of different e-commerce sites and also get a
consolidated view of all finances linked to any of your bank accounts. To use Lime,
you don’t have to be an Axis Bank customer. PingPay allows you to send, ask for
and receive money via Twitter, Facebook, WhatsApp, email and SMS. But you need
to be the bank’s customer to be able to send money. To receive and to ask, you don’t
need to be the bank’s customer.

Public sector banks: They have been slower in rolling out apps. However, State
Bank of India (SBI) has launched at least five products—apps and wallets for
financial as well as non-financial services (State Bank Samadhaan, State Bank
Buddy, State Bank Anywhere, State Bank Freedom and SBI Quick). State Bank
Buddy is a mobile wallet, which can be used by the bank’s as well as other
customers. SBI Quick app is a missed call banking app. Freedom app allows balance

67
enquiries and money transfer. State Bank Secure OTP is an OTP generation app for
verifying transactions.
Bank of Baroda has two apps—Baroda M-Connect and Baroda mPassBook. To
register, you have to visit the bank’s ATM or branch. In line with its existing
customers’ needs who want a passbook, the bank also has an app for this—it
provides details of all types of transactions.

Bank of India offers two apps—StarToken NG and BOI Mobile banking—both of

which allow basic banking services. Punjab National Bank‘s PNB mBanking and
PNB MobiEase give basic banking services. Canara Bank has three apps CanMobile,
Canara mWallet, and Canara e-infobook. CanMobile is a basic banking app whereas
e-infobook gives updates such as passbook information. Canara mWallet allows you
to load money and pay bills real time.

68
CHAPTER 6

69
 Findings

Summary of key findings:

 Best Overall App: ICICI mobile banking with a score of 4.5,

 Best Apps Among the 6 Largest Banks: Axis bank and ICICI bank One both
scored 4.5and 4.3.
 Worst App Among the 6 Largest Banks: SBI with a score of 3.9, improving
from 3.5 .
 Best Online Direct Bank App: ICICI Bank with a score of 4.5.
 Overall Most Improved App: BOB m-connect, with a score increase of 31%
year over year, from 2.2 to 4.1.

App ratings were recorded in the Google Play and Apple App Stores, and include
ratings for all app versions. Overall ratings are a weighted average, rounded to the
nearest tenth, of iOS and Android ratings based on the number of reviews for each
platform. Institutions with no mobile apps were excluded from ranking summaries..

ICICI mobile banking tops them all

ICICI mobile banking has managed to keep the 8 lakh people who have used its
mobile app relatively content. Part of its success may lie in serving more than mobile
apps from other large banks, which tend to have customers primarily using mobile
70
apps for more traditional checking and savings accounts. Nonetheless, its score of
4.5 is the highest of any institution in our rankings.

71
CHAPTER 7

72
7.1 Limitations to the study

 Official statistics may reflect the biases of those in power – limiting what you
can find out.
 Official statistics – the way things are measured may change over time,
making historical comparisons difficult (As with crime statistics, the definition
of crime keeps changing.)
 Documents may lack authenticity– parts of the document might be missing
because of age, and we might not even be to verify who actually wrote the
document, meaning we cannot check whether its biased or not.
 Representativeness – documents may not be representative of the wider
population –especially a problem with older documents. Many documents do
not survive because they are not stored, and others deteriorate with age and
become unusable. Other documents are deliberately withheld from researchers
and the public gaze, and therefore do not become available.

73
CHAPTER 8

74
 8.1 Suggestions

Based on the findings from this study, the researcher makes the following
suggestions for further research;

Online banking still a mixed bag

Among the 6 online direct apps we found more dispersion in app user satisfaction.
While ICICI mobile banking tops the list with a weighted overall rating of 4.5, four
of the banks had apps with a rating of less than 4. Still, nearly all the apps in this
category saw a modest improvement in user satisfaction versus last year.

Bigger is getting better

Apart from HDFC bank mobile banking , the apps of the 6 largest banks were rated
better than average by users, which is quite a feat when you consider that many of
these apps, like Axis bank and ICICI bank, not only offer savings, checking and
credit card accounts, but also more complicated products like brokerage accounts
and finance management .

75
 8.2 Conclusions

With so many apps and wallets, is it a case of too much supply? Banks and analysts
say that multiple apps are launched to address different sets of customers. “This is
done to basically focus on targeted customers. It all depends on use case,” said
Saurabh Tripathi, partner and director at Boston Consulting Group. For instance,
ICICI Bank’s Pockets focuses e-commerce payments, bill payments and P2P
payments, while HDFC Bank’s Chillr focuses on sending money to a contact.
However, often, there are overlapping features as well. “This is usually the case with
public sector banks as the idea is outsourced. Some level of internal check needs to
be done to maintain a difference,” said Tripathi, who believes that banks should offer
multiple apps and launch them one after the other as each customer is different, and
it is difficult to predict which will work.

Some apps are for all customers, such as Lime and Pocket. But to use some apps,
such as MobileBanking and Yes Mobile, you need to have an account with the parent
bank. However, this is likely to change soon.

According to a report by JM Financial Institutional Securities, once unified

payments interface by National Payments Corp. of India Ltd becomes operational,
multiple bank accounts will be linked to a single banking app provided by the
payments service provider, and there will be no need to have multiple apps.

The factors like usefulness of mobile banking, ease of use of mobile banking,
awareness of mobile banking & interest in using mobile banking can be used
understand consumers perception about mobile banking; thus they can be useful to
increase the reach of this banking service. Deep study around these factors can help
in increasing more awareness about mobile banking.

Consumer awareness has significant impact on interest to use in mobile banking.

Consumers\ are interested because they have heard about it from somewhere & think
that M-Banking will allow them to do banking transactions anytime.

76
There is significant impact of usefulness of M-Banking on the interest to use M-
Banking. Thus if banks take more efforts in reaching to consumers & give
information about mobile banking then more consumers will use mobile banking.
Mobile banking will also reduce the cost of banks.

There is significant impact of ease of use of M-Banking on the interest to use M-

Banking. Technology is now enabling consumers to do their banking transactions
just by clicking some buttons on mobile or by sending SMS. So this is acting as a
pull factor to increase adoption of mobile banking.

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Sr no. PARTICULARS NUMBER

1.1 Introduction 10

1.2 Accounts information 16

1.3 Futures 17

1.4 Challenges 18

1.5 PESTLE 30

1.6 PORTERS 33

CHAPTER 2 36

2.1 INTRODUCTION TO COMPANY 37

2.2 BENIFTS OF THE STUDY 43

CHAPTER 3 44

3.1 LITERATURE REVIEW 45

3.2 SCOPE OF THE STUDY 60

3.3 OBJECTIVE OF THE STUDY 61

CHAPTER 4 62

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4.1 RESEARCH METHADOLOGY 63

4.2 DATA SOURCE 64

CHAPTER 5 65

5.1 DATA ANALYSIIS AND INTERPRETATION 66

CHAPTER 6 69

6.1 FINDINGS 70

CHAPTER 7 72

7.1 LIMITIATION 73

CHAPTER 8 74

8.1 SUGGESTION 75

8.2 CONCLUSION 76

BIBLOGRAPHY 77

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