INTRODUCTION Mobile banking (m‐banking) has emerged as a popular mode of

banking in many developed and developing countries. In India, there are

approximately 13 million mobile banking users and this figure is expected to grow
rapidly with mobile transactions exceeding credit card transactions by the end of
the decade. By some measures, there are more mobile phones in India than there
are bank accounts. The combination of two factors—a large unbanked population
and the ubiquity of cell phones—is a catalyst for high mobile banking adoption.
The mobile banking is defined as “the provision of banking services to customers
on their mobile devices” specifically the operation of bank current and deposit or
savings accounts. Mobile banking is an application of mobile computing which
provides customers with the support needed to be able to bank anywhere, anytime
using a mobile handheld device and a mobile service such as Short Message
Service (SMS). Mobile banking facility removes the space and time limitations
from banking activities such as checking account balances or transferring money
from one account to another and time saving when we go to bank and doing some
banking activities. Internet Banking helps the customer's anytime access to their
banks. Customer's 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. But the biggest limitation of
Internet banking is the requirement of a Personal Computer with an Internet
connection, but definitely a big barrier if we consider most of the developing
countries of Asia like 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. The main purpose of Mobile Banking scores over Internet Banking is that it
enables ‘Anywhere Anytime Banking is Available'. Customers don't need access to
a computer terminal to access their bank accounts.

1.2 Background of the Study

Mobile banking (m-banking) is a term used for performing banking transactions

via mobile device such as mobile phones (Anyasi and Otubu, 2009). Tiwari, Buse
and Herstatt (2006) define mobile banking as any transaction involving the transfer
of ownership or rights to use goods and services which is initiated and/orcompleted
by using mobile access to computer- mediated networks with the help of an
electronic device. They further indicate that mobile banking refers to provision and
availment of bank-related 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 from the bank. Mobile banking is most often performed
via short message services (SMS) or mobile internet.

According the institute of bankers in Malawi (IOB), the financial sector is the growing industry
in Malawi which is comprised of 10 commercial banks registered under the Reserve Bank of
Malawi namely; Continental Discount House (CDH), First Discount House (FDH), Eco bank,
Nedbank, Opportunity Bank of Malawi (OBM), National Bank of Malawi (NBM), New Finance
Bank (NFB), Standard Bank (STD), First Merchant Bank (FMB) and Finca Malawi (IOB, 2016).
Among the 10 commercial banks operating in the country, NBM is the biggest bank based on
assets, customer base as well as profitability (IOB, 2016). Recently the financial sector in
Malawi who have introduced has witnessd an introduction of mobile banking facilties by the
two giant mobile operator namely ;telecom network Malawi (TNM) and airtel Malawi who have
introduced Mpamba and Airtel money respectively. Mpamba and Airtel money offer services
such as money
transfer, bill payment, Digital Satellite Television (DSTV) subscription, airtime top up as well as
payment of premiums. An increase of the number of banks as well as diversification of the
mobile operators in the mobile banking sector has increased the rate of competition in the
banking industry and in order to remain competitive banks need to reconsider their critical
success factors.

National Bank is one of the leading commercial banks in the banking industry established in
1971 through a merger of Barclays bank of England and standard chartered bank of South
Africa. Its vision is to be the most successful financial institution in Malawi with a visible
presence in southern Africa. Currently the bank is owned by Press Corporation with 51.5%
shareholding and it has over30service centres across the country. The bank has over 1000
employees. In a bid to remain competitive in terms of innovations the bank introduced
Mo626ice product in 2009. Mo626 is the product which allows NBM customers to access
banking facilities such as money transfer, bill payment, airtime top up, account balance enquiry,
mini account statement, cheque stop payment, cheque book request, DSTV subscription,
University of Malawi (UNIMA) fees payment as well as loading fuel card through their mobile
phones regardless of the phone being connected to the internet or not. NBM was the first bank
in Malawi to introduce the mobile banking facilities to its valued customers (NBM, 2016).

Banks all over the world have been effectively deploying information technology as an
innovative resource to achieve speed, efficiency, cost reduction, customer service and
competitive advantage. Technology enabled products and delivery channels offer value to
customers providing them with anywhere, anytime, anyway banking to customers (Koshy,
2011).Developing countries like Malawi, banks have realized need to remain competitive
through provision of best services to their customers. To achieve this, they need to have the latest
technology in place such as mobile banking which gives mobile platform that offers a convenient
method for managing money without handing cash ( karjaluto, 2002).”Financial institution,
which have had difficulty providing profitable services through traditional channels to poor
clients ,see m-banking as a form of branch less banking’ (lvatury & mas ,2008).
This lowers the costs of serving low-income customers.

Despite the obvious potential benefits of mobile banking, questions remain about what
factors play a role in adoption of the relatively new technology at a scale sufficient to make it
worth offering. Understanding adoption behaviour of clients will allow service providers of
mobile financial services to engineer their offerings in order to optimise uptake by consumers.

ORIGINATION OF M-BANKING IN INDIA

One of the most leading sectors in the world in the adoption of mobile technology
is the banking industry including India. India was depicted to be the fastest
growing mobile communications nation in Asia. Presently, banking industry of
India has engaged the use of Information and Communication Technology (ICT) as
a platform for effective and efficient means of conducting financial transactions.
But, banking sector of India found technologyoriented financial services in the
year of 1987 through the Automated Teller Machines (ATMs). It was installed by
HSBC bank, after 20 years completion of the execution process of cash dispensers
for the first appearance in the world made by Barclays bank in UK, 1967. To
strengthen the banking sector, financial reforms were initiated as a part of the
economic reform started in India since 1991 onwards. Reforms were introduced in
two phases, based on the report of Narsimahan committee in the year of 1991 and
1997. The second committee report, suggested whatever programme required by
the banking sector reforms and make it in the India’s banking system to become
internationally competitive. This suggestion also helped to making fast
development of technological-oriented financial services provided by the bankers
to their customers in the past two decades. In recent days, finance-related services
that are offered by employing mobile telecommunication technologies are
generally referred to as m-banking technology-enabled financial information or
services (Tiwari. R, et.al). So, the first m-banking and payment initiatives were
announced during 1999. The first bank to provide mobile banking facilities in India
was ICICI bank in the year 1999, followed by HDFC bank and IDBI bank. Self-
service Technological advances have reshaped the size and nature of the financial
industry, allowing it to extend beyond the traditional to modern concept of saving
and borrowing through extension of the technological progression in the banking
sector. The terms m-banking, m-finance, mtransfers and m-payments refer to the
inter-services between customers and bankers. Now, m-banking development is a
next generation of electronic banking which delivers financial services when the
customers use their handheld devices to access their accounts and pay their bills
from a bank which operates their account without having to physically visit their
bank. In recent days, mobile banking is performed between bankers and its
customers in the form of Short Message Service (SMS) or the Mobile Internet for
the purpose of attaining higher levels of customer satisfaction and increased loyalty
by providing 24X7 facilities and bankers will benefit further from reduced
administrative expenses, lesser number of branches and lower handling charges
with better service to the customers than branch banking. However, around the
globe various IT initiatives developed by the bankers and use the mobile phone to
provide financial services without access to traditional banks. Innovations in
mobile technology the banks are conduct fast paced demands among thevarious
group of peoples or customers in the 21st Century through the high-quality of
response and m-banking which is an integral part of m-commerce has become very
popular among mobile users ever since its existence in 2007. The success of m-
banking services depends upon the mobile network operator, m-banking
technology vendor, bank and the customer. Further, m-banking has great deal of
capabilities to offer value-added service, transformation of information and
decision making services to the organization. M-banking is a type of m-commerce
service since it allows consumers to perform the following technology-enabled
financial information availed from the banks through the mobile device. Therefore,
the Government of India and the Reserve Bank of India (RBI) encourage banks to
provide banking facilities to those peoples through m-banking technology. In the
year 2008, the RBI issued m-banking guidelines to the banks. This disqualifies
mobile network operators from offering their own service.
LITERATURE REVIEW

The mobile banking is defined as “the provision of banking services to customers

on their mobile devices” (Sharma, Prerna, Bamoriya&Preeti Singh, 2011). Mobile
Banking refers to provision and usage of banking and financial services with the
help of mobile telecommunication devices. Mobile banking is a system that helps
the customers to conduct a number of financial transactions with the help of their
mobile devices. Mobile commerce is a natural successor to electronic commerce.
Where a mobile device is used to initiate, authorize and confirm an exchange of
financial value in return for goods and services. Mobile devices may include
mobile phones, PDAs, wireless tablets and any other device that connect to mobile
telecommunication network and make it possible for payments to be made. The
bank provides mobile banking services to their customers, wishing to increase their
customer share by removing all the hurdles in the way of adoption of mobile
banking services The role of banking is very important in operating the business as
well as industry functions. As the Internet banking is still in its growing stage,
mobile banking has emerged as the next advance way of doing banking. The scope
of offered services may include facilities to conduct bank transactions, to
administer accounts and to access customized information (Tiwari&Buse, 2007).
In the broader sense mobile banking as that type of execution of financial services
in the course of which, within an electronic procedure the customer uses mobile
communication techniques in conjunction with mobile devices
(Pousttchi&Schurig, 2004). Mobile phones have become an essential
communication tool for almost every individual worldwide. In India, where mobile
subscribers far exceed fixed line subscribers because of better mobile infrastructure
in comparison to fixed line infrastructure has made mobile banking much more
appealing in India. Technology plays an important role in banking sector. Mobile
phone is a common technology device that became part of every individual in the
information era. Mobile Banking is an emerging alternate channel for providing
banking services. India is the second largest telecom market in the world, which is
having high potential for expanding mobile banking services .
MOBILE BANKING : OVERVIEW & CURRENT STATUS

INTRODUCTION: Mobile banking refers to the use of a mobile device to carry

out transactions. The service is provided by some financial institutions , especially
banks. Mobile banking services can be categorized into the following: Account
information access, Transactions , Investments, Support services & Content &
News. 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 smartphone or tablet. Mobile banking is usually available on a 24-
hours basis. Transactions through mobile banking depend on the features of the
mobile banking app provided and typically includes obtaining account balances
and lists of latest transactions, electronic bill payments,P2P payments & funds
transfers between a customers or anothers accounts.

1.The Payment and Settlement Systems Act,2007 empowers the Reserve Bank of
India to authorize and regulate entities operating payment system in the country.
The vision Document for Payment and Settlement Systems of the RBL has, over a
period of time, placed importance on the move towards electronic payments and
thereby a less-cash society. Towards this end, the bank has been promoting and
nurturing the growth of various modes of electronic payments including the
prepaid payment instruments, card payments, mobile banking etc.

2. The Payment System Vision Document 2012-2015,reflects the commitment

towards provision of safe,efficient, accessible, inclusive, interoperable and
authorized payment and settlement systems in the country.The performance
indicators of various payments system segment show that, during 2012-2013 the
share of paper-based instrumentsin the volume of total non –cash transactions had
been lower than that of electronic payments. In addition to the growth in volume as
well as value processed by RTGS, the retail electronic segment too has registered a
significant growth of 35.2 percent in volume and 54.9 percent in value. Though
overall volume of transactions in mobile banking is low, there has been significant
growth in the volume this year as compared to previous years.

Mobile banking: Regulatory framework and current status

3. Recognising the potential of mobile as a channel for offering financial services

in the country, the Reserve Bank issued the first set of guidelines on mobile
banking in October 2008. The bank-led model was considered suitable for the
country with a mandate to banks bank account. At this time, a few banks had
already started offering information based services like balance enquiry, stop
payment instruction of cheques, transaction enquiry, location of the nearest ATM\
branch etc. through this medium.

4. The guidelines issued by RBI in October 2008, permitted banks to facilitate

funds transfer from one bank to another bank account, both for personal
remittances and purchase of goods and services. Banks were directed on the
regulatory/supervisory issues, registration of customers for mobile banking, to
ensure technology standards, interoperability, interbank clearing and settlement
arrangement for fund transfers, customer grievance and redressal mechanism and
transaction limits in an attempt to ensure safe, secure transfer of funds.

5. Under extant regulatory prescriptions, there is no monetary restriction on fund

transfer effected through mobile banking as it is left to the risk perception of each
bank and policies approved by their respective boards. However, end-to-end
encryption for transactions in excess of RS.5000/- has been

mandated by RBI. Similarly, mobile as a channel for funds transfer from a bank
account for cash payout to a beneficiary who does not have a bank account at
ATMs/BCs- RS.10000 per transaction with a cap ofRS.25000/-per beneficiary has
also been permitted by RBI [under the Domestic Money Transfer guidelines].

6. In line with these guidelines, banks have been offering mobile banking services
to their customers thought various channels such as SMS, USSD channel, mobile
banking application etc. However, real time inter-bank mobile banking payments
has been facilitated through the setting up of the Interbank Mobile Payment
Services (IMPS), now termed as Immediate Payment Service, and operated by the
NPCL with the approval of the Reserve Bank Of India. The IMPS has enhanced
the efficiency of mobile banking by enabling real time transfer of funds between
bank accounts and providing a centralized interbank settlement service for mobile
transactions. The IMPS has also been enhanced to support merchant payments
using mobile phones to promote less cash society. The committee considered
options of using mobile for the merchant payments whereby the merchants on
initiating the payment request completes the transaction by accepting an OTP
generated by customer on his mobile. The committee also considered a standard
and simple process to generate OTP across all banks.

7. Under the PSS Act, the Reserve Bank has given approval for mobile banking
services to 80 banks, of which 64 have commenced operations. The customer base
of banks who have subscribeb to mobile banking service stands at nearly 30
million as of October 2013.

8. In recent years, the mobile banking has been reflecting a growing trend (albeit
the low volumes) with the volume and value increasing by 108.5% (53.30 million
in 2012-2013 vis-à-vis 25.56 million in 2011-2012) and 228.9% (Rs.59.90 billion
in 2012-2013 vis-à-vis Rs.18.21 billion in 2011-2012) respectively. The trend in
usage of mobile banking in the last three years is given below:

YEAR NO. OF USERS VOLUME VALUE

(Million) (Million) (Billion Rs.)
2010-2011 5.96 6.85 6.14
2011-2012 12.96 25.56 18.21
(117.45%) (273.139%) (196.58%)
2012-2013 22.51 53.30 59.90
(73.69%) (108.53%) (228.94%)

9. Mobile telephony in India has a huge potential with 873.4 Mn mobile

connections as on 30.06.2013 in the country, of which about 350 Mn are rural
areas. The number of subscribers who access internet by wireless phones has
grown to about 143Mn. With sizeable proportion of households (41.3%) not
having a bank account and large unbanked sections pf population residing in the
villages (as per census 2011, only 54.4% of rural households had access to banking
services ), mobile banking offers a huge opportunity for banking industry to
leverage upon the mobile density in the country.

10. The country has a subscriber base of 870 Mn, and around 450Mn bank
CCOUNTS. The estimates for active SIMs vary, but there are only 22Mn active
mobile banking customers. In terms of per-transaction or per-branch costs, mobile
banking transaction is economical compared to the traditional banking channels
and hence there is need for banks to encourage the mobile banking channel in a big
way keeping

in mind the long term economic gains. The committee has deliberated the ways
and means to make mobile as preferred, convenient and economical channel for
accessing the banking service for all the banking customers. Put another way,

 Unique mobile subscribers 350 to 550 million

 Aadhaar numbers issued 510 million
 Bank account holders 589million
 Bank account holders using ICT based channels 182million
 Number of mobile banking customers 22million

Evidently, the large mobile subscriber base has not been leveraged for financial
inclusion.

Challenges faced by banks on providing mobile banking to the customers

11. Despite the potential for mobile banking and the regulatory provisions enabling
greater use of mobile as a channel for financial services in general, and for
financial inclusion in particular, banks are facing some challenges in taking mobile
banking to the desired level. These challenges are essentially in two fronts-(A)
Customer enrollment related issues and (B) Technical issues.

A. Customer enrollment related issues are:

a) Mobile number registration

b)M-PIN generation process

c) Concerns relating to security is a factor affecting on-boarding of customers

d) Bank staff education

e) Customer education

Mobile number registration

12. For a customer, in order to conduct a mobile payment transaction, his/her
mobile number needs to be registered with the bank. The process for mobile
number registration is implemented differently across banks. Currently, the process
for mobile number registration involves the following:

a) Customer mandatorily needs to go to the bank branch for most of the banks to
register his number and fill in the application form (paper-based). After
verification, his number gets registered in the CBS and in the bank’s Mobile
Banking system.

b) Some leading banks have provided the facility for customer to register mobile
number at their bank’s ATMs using 2FA authentication of ATM card + ATM PIN

13. In both the above cases, the customer needs to physically go to the branch /
ATM in order to register their mobile number, which acts as a barrier in many
cases, besides delaying the entire process. Further, even where the above process
of registration through ATMs is provided, it is restricted to the use of own-bank
ATMs and the same is not possible at present by going to any other bank ATMs.
The process for mobile number registration needs to be simpler for customer to get
on-boarded.

M-PIN generation

14. M-PIN is the second factor of authentication that customer needs to use in
order to conduct mobile banking transaction. Customer needs M-PIN from his
respective bank in order to get started with mobile payments. Currently, the
process for M-PIN generation is implemented differently across banks, and
involves the following:

a) For most banks, after the mobile number registration at branch / any bank ATM,
customer receives M-PIN via SMS on their registered mobile number. In certain
cases, customer receives the M-PIN through postal mail.

b) Some leading banks have provided the facility for generating and changing M-
PIN from the handset itself using the mobile banking application and providing the
authentication parameters as required by the bank (e.g. Debit card details such as
Debit card number, ATM PIN, expiry date). These inputs are captured and sent
through registered mobile number, for the purpose of M-PIN generation.

c) Some leading banks have also provided the facility to generate and change M-
PIN through alternate channels such as IVR, ATM, and Internet Banking.
Customer may be able to make merchant payment using just his mobile number
and M-PIN/OTP on the merchant interface. The M-pin can be only interfaced on
acquiring bank’s interface such as USSD, Application etc. for security reasons.
The merchant based interfaces can accept OTP (One-Time Password) for
authentication.

d) Every bank must offer OTP services on SMS request with the standard syntax of
SMS such as “MOTP XXXXXX” to the short or long code.(XXXXXX – last 6
digits of the account number). This will help to expand the use of OTP in mobile
payments.

Concerns related to security

15. One of the major factors affecting customer on-boarding and usage of mobile
banking services is the concern relating to security of transactions effected using
the mobile phone. While mobile banking application is an end-to-end encrypted
channel, the other access channels viz. SMS, USSD, IVR, are not end-to-end
encrypted. However, in order to enjoy the higher level of security available in the
application-based mobile banking, the customer’s handset has to be GPRS-
enabled.

16. Since SMS facility is available on all handsets, the issue of security can be
addressed if the SMS can be encrypted end-to-end, thus allaying any concerns
relating to lack of security in this channel.

17. In addition to this, another important aspect adding to the concerns on the part
of customers relate to how their complaints and grievances will be addressed for
transacting on this channel – whether through their bank or through their mobile
service provider.

Bank staff training

18. The committee feels for effective and efficient implementation of providing
mobile banking facilities to the customers it is imperative that the banks staff is
well versed and thoroughly trained in various aspects of the mobile banking. For
this workshop may be conducted for top officials including the chief executive of
the banks; training program may be conducted during induction programs and
probationary officer courses. Banks may also periodically conduct refresher
courses to ensure staff is abreast with latest developments in these fast paced
technology areas in mobile banking.

Customer education

19. The committee also feels banks must continue to invest in handholding and
educating customers to increase the awareness of various aspects of mobile
banking. Banks collectively may invest in marketing and advertising for
widespread promotion of mobile banking.

B. The technical aspects which are posing a challenge relate to:

a) Access channels for transactions

b) Cumbersome transaction process

c) Coordination with MNOs in mobile banking eco-system

Access channels for transaction

20. Once the customer mobile number is registered and M-PIN is generated,
customer may use any of the access channels provided by the bank for conducting
mobile banking transactions. Currently, while most banks have provided mobile
banking application and SMS Technical Committee on Mobile Banking – Report
facility as access channels, a few banks have also provided other access channels
such as USSD, WAP, IVR, etc. some banks also provide a combination of a few of
these channels (application + SMS, application + USSD) for offering better
security.

21. Some of the issues faced in this regard are:

a) In the case of mobile banking application, the applications need to be
continuously upgraded to keep pace with newer compatible handset and operating
systems.

b) In the case of SMS access channel, while it is available to all users (with all
types of handsets) for conducting mobile banking transactions, the channel is not
secure endto-end and hence there are limits on the amounts that can be transferred
using this channel without encryption. Further, the SMS also gets stored in the
‘sent items’ of handset, including the confidential M-PIN. The customer also needs
to know the syntax for doing any transaction through SMS.

c) As far as the USSD channel is concerned, though it is menu-driven, interactive,

userfriendly for transactions, and is available on GSM network (92.77% of the
subscribers) and no information is stored on the handset, the major challenge is
that it is not available to the customers on CDMA network. The USSD session per
se does not offer any additional security to the transactions other than the basic
security available in theGSM channel.

d) The IVR channel, independent of the handset can be used by all customers – it is
menu-driven, interactive and user-friendly, the information does not get stored on
handset, services can be offered in multiple languages (beneficial for financial
inclusion), the voice prompts and simple numeric inputs making it easier for
customers to adapt, etc. However, this channel is again not end-to-end encrypted
and the IVR infrastructure has to be built by the banks offering this service, thus
involving cost considerations.

e) The WAP site can be accessed by any handset provided the customer has active
data connection.

Cumbersome transaction process

22. In the present scenario, with various banks offering various channels for their
customers to undertake mobile banking transactions, the user experience is
certainly not uniform across banks / channels.

5
 The customer is required to provide different set of inputs (authentication
parameters) for each type of access channel, thus making the entire transaction
process cumbersome.

23. Currently using IMPS, for effecting a person-to-person funds transfer, the
remitting customer can provide details of the beneficiary by providing one of the
three identifiers -Mobile number and MMID of the beneficiary; IFSC + Account
Number; Aadhaar Number. Since MMID-based input required that the beneficiary
should also be registered for mobile banking with his bank, the options of
IFSC+Account Number was provided to facilitate the customers making inter-bank
mobile transactions. From financial inclusion perspective, input of beneficiary’s
Aadhaar number has also been provided since August 2013.

24. Similarly, a merchant / enterprise, it is difficult to inform customer on how to

make the payment, since every bank process is different. Customer education is an
issue because of the above.

Coordination with MNOs in mobile banking eco-system

25. In order to offer a more secure and better user experience to their customers
through their mobile banking channels, banks need a greater level of coordination
with the telecom service providers. Some of these areas are:

a) For better authentication of the transaction by the bank, MNOs could facilitate
the mobile banking transaction by providing the mobile number from where
transaction is originated when customers transact using mobile banking application
(Currently the mobile number in the header is suppressed).

b) Greater extension of support by MNOs to all banks for providing USSD

services.

c) Facilitation by the MNOs for banks to offer a more secure mobile banking to
their customers through SIM Took Kit (STK) application on SIM card for securing
the mobile banking transactions.

Recommendations

26. In order to address the above challenges, a multi-pronged approach with

concerted involvement of all stakeholders is necessary. In this context, the
following solutions are recommended for addressing the customer acquisition
related challenges as well as the technical aspects.

Recommendations for customer enrollment:

a) The customer may not be required to visit the bank branch for mobile number
registration. Alternate channels for mobile number registration may be made
available, such as ATM network across banks as well as the BC / agent network
using biometric authentication, so that the customer can register the mobile number
conveniently. In the case of first time registration of mobile number, appropriate
security safeguards may be put in place by the banks.

b) The mobile number registration process, including the registration form may be
made uniform, across all banks, so it helps with uniform customer experience.
Social media propagation of the registration process will bring more customers to
this channel.

c) The process of M-PIN generation may also be simplified and standardized

without necessitating a visit to the bank branch by the customer, so that the
customer can be on-boarded in an easy manner and start transacting using mobile
payments, and reduce barriers to entry.

o The customer may be able to set and change his M-PIN from the handset itself
using authentication parameters defined by the banks permissible by their security
guidelines.

o The customer may have the facility to set or change the M-PIN from at least one
additional channel (apart from mobile handset itself as mentioned in point a above)
such as Phone Banking, IVR, ATM, Internet Banking.

d) M-PIN may be generated from the registered mobile number through secure
access channels such as mobile application, SIM STK application by using
authentication parameters such as debit card credentials (debit card number, ATM
PIN, expiry date) required by bank.

e) For customers using other channels, M-PIN may be generated through bank’s
phone banking facility or IVR, or even the ATM channel, after verification of
credentials (e.g. mobile number, debit card number, ATM PIN, account number,
date of birth, PAN number, details of last transaction, etc). Further, these channels
may also be offereas additional channels to those customers who use the mobile
application or SIM STK application.

Recommendations for Technical Issues:

a) Banks may implement multiple channels (application, SMS, USSD etc.) for
mobile banking so that options are available to all types of customers with any type
of handsets with suitable level of security.

b) In case of application-based mobile banking, encrypted SMS facility may be

provided to all customers as an additional channel so as to enable them to perform
transactions in a secured manner, including high value transactions, irrespective of
whether data connectivity is available or not.

c) For facilitating funds transfer using mobile banking, the remitting customer may
be facilitated to effect person-to-person funds transfer using just the mobile
number and bank or just the Aadhaar number of beneficiary.

d) Customers may be enabled to use mobile banking service through the use of a
single or common USSD number / SMS short/long codes / IVR number / mobile
application across all banks. This will facilitate easier customer education and
uniform transaction process across all banks.

e) Limit of unsecured transaction (without end to end encryption) may be raised

from the existing Rs.5000/- to Rs.10000/- subject to having certain velocity checks
at the bank side. The banks may take the decision of limit enhancement depending
on their security policy and internal risk management control measures.

f) For better authentication of the transaction by the bank, MNOs could facilitate
the mobile banking transaction by providing the mobile number from where
transaction is originated when customers transact using mobile banking application
(Currently the mobile number in the header is suppressed). The recommendations
for other issues relating to USSD and SIM Tool Kit are dealt with in detail in
subsequent chapters

Mobile Banking : SMS based channel

1. SMS is a popular and widely used channel in mobile phones. It is ubiquitously
available in all handsets irrespective of make and model and also GSM and CDMA
enabled handsets.

Most customers are very conversant with the SMS channel and use the same for
various services including the short messaging. Many popular mobile VAS
services such as Cricket,Jokes, Horoscopes, etc. are based on SMS and used
widely by customers.

Current status of SMS-based mobile banking

2. Given the advantages offered by SMS channel, many banks have offered mobile
banking services through the SMS channel. This includes non-financial services
such as Balance Enquiry, Mini statement, Cheque Book Request, Transaction
Alerts, etc., and financial services such as funds transfer, mobile / DTH recharge,
Bill payments, etc.

3. In order to avail mobile banking services over SMS, customer needs to send the
request with a keyword and parameters to SMS short code or long code number,
for e.g. for Balance Enquiry, customer can send SMS BAL to 5667766 (short
code) or 9212167766 (long code). The request is sent to the respective bank server,
and customer receives the response via SMS. Similarly in order to perform funds
transfer using the IMPS platform, customer can send SMS “IMPS <Beneficiary
account number><Beneficiary IFSC><Amount><M-PIN><Remarks>” to bank
short code or long code. The request is forwarded to the bank server,the bank
server processes the transaction, and sends response to customer via SMS.

Challenges faced

4. Following are some of the challenges faced with SMS channel for mobile
banking by the banks:

a) Customer needs to know the exact syntax of SMS for performing transaction.

b) The syntax becomes complex when (i) bank adds more transactions which will
end up as different keywords and (ii) when more input parameters are needed to
complete the transaction. Under these conditions, it is also difficult to
communicate and educate the customer to use the syntax.

c) The SMS channel is not end-to-end encrypted without having an application on

the handset to encrypt the entire SMS. There is a transaction limit as per RBI
mobile banking guidelines, of Rs 5,000/- per transaction without end to end
encryption.

Benefits of Mobile Banking

1. Always on- mobile phone can be always or is always portable due to inherent
design, allow users to interact in activities such as travel or meeting people, while
transactions via mobile devices are equipped with Internet.

2. Location-centric-Not only is mobile phone in all places, Global Positioning

System (GPS) may be created to recognize phone and tries to personalize based on
existing services. Identifying the location of Internet users, provides a special
advantage for mobile commerce over wired e-commerce. Using this technology,
the mobile commerce providers will enable to receive and send information to a
particular place.

3. Convenience- Other people are not limited by time or space, access tom
electronic activities. For example, people who are stuck in traffic or waiting in the
queue Will be enable to buy their favorite Internet-based activities or managing
their daily transactions through mobile commerce applications .Consumers can
know a special comfort that can improve their quality of life. By making services
more comfortable, the customer will be more loyal. As a result, Communication
facilities with mobile commerce applica
tions to provide a comfortable.

4. Customization - Mobile phone is much higher influence than personal

computers. Therefore, mobile commerce producers to design more creative and
more customized lifestyle tool. For example, using demographic data collected by
wireless service providers, and information on the current location of the mobile
users can do more targeted advertising. Advertising messages can be customized
based on the information provided through consultation with the user's initial or
previous users' shopping habits.

5. Identify ability - Mobile phone provides to support the secure mobile phone
transactions where personal computers are almost unknown (no name). One person
always uses mobile devices and it is ideal for Personal -based target
marketing ,through the technology of Global Positioning System (GPS), service
providers can recognize a user carefully .Personalize opportunity to deliver
messages to different parts of space and time through sound and
look(Skinner,2011)
CHAPTER – 2
 SBI was formed under the SBI act 1955 with the take over of imperial bank and
amalgamation of bank of Bengal. Bank of Bombay and bank of madras. The
government moped up 93% of the equity leaving 7% of the ownership. By this act
the equity of RBI cannot be diluted below 5%. SBI enjoys a pool of best
managerial talent assured government business a countrywide network of branc

SBI is the 43th largest bank in the world and ranked 21st in the fortune global 500
list of the world largest cooperation of 2020 being the only Indian bank on the list
it is a public sector bank in India with 23% market share of the total loan and
deposit markets. Nationalized bank such as state bank of India ( SBI) thought
pygmies in the international banking market and banking behemoths of India . they
branches spread over the entire length and breathe of the country. SBI in particular
is all pervasive enjoying a sprawling of 9000 branches. SBI is a very conservative
to approach to accounting particularly when its comes to declaration of assest SBI
enjoy monopoly of the government business. The reserve bank of India owns about
60% of the banks equity’s hes and strong brand credibility in the Indian market.
But the Numero Uno position is sliding with the entry of sleeker private and
foreign banks into the Indian banking scene. The bank is continuously
restructuring itself for this the even hire the services of foreign consultants but the
place to be hastened With the government offering assure business nationalized
banks of India in the particular should not take complacent view. They should
evolve service intensive products and make their employees customer friendly.
With competition from private and foreign banks knocking at the door the banks
should realize size is no more in insurance against the onslaught of competition
from the sleek private and foreign bank. A revolutionary approach to privatize
ownership is need of the hour.

The State Bank of India (SBI) is an Indian multinational, public sector banking and
financial services statutory body. It is a government corporation statutory body
headquarters in Mumbai, Maharashtra. SBI is ranked as 216th in the Fortune
global 500 list of the world‟s biggest corporation of 2018. It is the largest bank in
India with a 23% market shares in assets, beside a share of one-fourth of the total
loan and deposits market. 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
1995. The government of India took control of the imperial bank of India in 1995,
with reserve bank of India (India‟s central bank) taking a 60% stake, renaming it
the State Bank of India. The State Bank of India‟s having the very big brand name
within the country it is the main bank of India. Now, while expanding its services
the SBI has also entered in the insurance sector with name of SBI Life insurance.
This is sufficient in itself that when other banks are using the various mergers to be
competitive with SBI while entering into insurance sector, the SBI decided to walk
alone in the very vast competitive and risky sector of Insurance.

The State Bank of India is one of the very pre-established banks in India and is the
only bank in India which is having collision with the western union money
transfer, which is having collision with the responsibility of cash transfer
worldwide in between several countries.

The social profile of State Bank of India has also grown up in the Rewa cityand the
reason behind this is the several of social schemes by the bank itself, which
includes „Clean rewa Green rewa campaign‟ in 2003, in which around 30000
plants had been planted and conserved in the surveillance of State Bank Of India.
Also the organization of several of the events in Rewa itself which introduces the
common public to the banking system and even to the services of State Bank of
India. Truly speaking in the State bank of India is having the similar name and
fame in banking sector as LIC is having in Insurance and TATA is having in
automobiles and steel in India. The purpose of comparison is not to bring the moral
down of others but it is retrospect the leaders of their prospective fields and
undoubtedly .The State Bank of India is the market leader when it is about
Banking.

The banking industry in India today comprises of 27 public sectors, 31 private

banks and 29 foreign banks. The Indian banking sector is headed for consolidation.
The presence of many regional players will see few banks emerging as global
competitors.

Moreover, the likely rise in interest rates will be bank margins under pressure.
Treasury gains may within the current scenario. Bank profit in future may again be
driven by core income.

Indian banking industry in general and SBI in particular has positioned itself to
take advantage kof such economic growth, India is likely to achieve. SBI is an
Indian multinational, Public Sector banking and financial services company. SBI is
one of India‟s major banks and is an industry leader in terms of size, business
sector promotion and initiatives for the progress and economic enhancement of the
Indian economy.

SBI is entering into many new businesses with strategic tie ups – Pension Funds,
General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of
Sale Merchant Acquisition, Advisory Services, organized items and so on – every
one of these activities having a massive potential for development. SBI is moving
forward with forefront innovation and imaginative new saving money models, to
strengthen its presence and widen its client base. The bouquet of services provided
by SBI includes Personal Banking, International, Banking, Agriculture / Rural and
Corporate Banking, SME, Government Business and Domestic Treasury. SBI is a
universally acknowledged regional banking giant and has 20% market share in
deposits and loans among Indian commercial banks.

1.1 INTRODUCTION

In India, banking industries has elaborated various financial rearrangements that

would create a shift from all the traditional banking to digitalized banking services
to gratify the customer‟s requirement. Mobile banking increasing rapidly in India
because customers find it more easy and comfortable way for doing banking
transactions. Thus digitalized banking services has taken a step further in its digital
platform through applications to access account information and other services
provided by banks. This type of digitalized banking services will diminish branch
level transaction and in due course of time it will make ease for customer services
pressure, thus declines the operating cost for banks. SBI provides a lot of
applications which provide banking services to customers as per their
requirements. These applications can be downloaded to the smart phones from app
store and are free to experience the freedom to access anywhere anytime the
banking service. SBI has several applications for their customers for ease
transactions such as SBI ANYWHERE, SBI -E-PAY, SBI -QUICK SBI BUDDY,
and YONO. YONO is the latest application of SBI where the user‟s savings bank
account can be opened digitally using new YONO app and Portal SBI .YONO is
new app launched by state bank of India.

SBI YONO is claimed to be a first integrated lifestyle and digital banking

application. The acronym for YONO is „YOU ONLY NEED ONE‟ SBI YONO
will help you to in making payment for all lifestyle expenses starting from booking
and renting cabs to entertainment and dining, travel, and medical everything is
covered by YONO. It provides the customers for banking activities, getting loans
also. For the availability of this app the customers must have an SBI account for
using this app. The user can login using ATM cards as well he/she needs to keep
their registered mobile number with him as OTP would be sent on that number.
These help the customers to use without even cards. YONO aims to be a one stop
solution for banking, lifestyle insurance,investment, and shopping needs. There are
a number of thing that can be done through this app including applying for loans,
opening a savings account even shopping online. Many of SBIs and its subsidiary
provides financial products offerings such as SBI cards, SBI caps, SBI Mutual
funds, SBI general and will also be able to integrate into YONO app. Users the app
will also be able to apply for loans, auto loans, withdraw their salaries etc. Apart
from this YONO can be used for fund transfers and even to get a loan /overdraft
against your fixed deposits. YONO is a one of a digital banking platform and
offers a range of customized products including offers

2.1 CONCEPTUAL REVIEW

SBI Provides many types of mobile banking services to their customers .Mobile
banking is a service provided by a bank or other financial institution that allows its
customers to conduct financial transactions remotely using a mobile device such as
a smartphone or tablet. Unlike the related internet banking it uses software, usually
called an app, provided by the financial institution for the purpose. Mobile banking
is usually available on a 24-hour basis. Some financial institutions have restrictions
on which accounts may be accessed through mobile banking, as well as a limit on
the amount that can be transacted. Mobile banking is dependent on the availability
of an internet or data connection to the mobile device.

Transactions through mobile banking depend on the features of the mobile banking
app provided and typically includes obtaining account balances and lists of latest
transactions, electronic bill payments, remote check deposits, P2P 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. Using a mobile banking app increases ease of use, speed, flexibility and
also improves security because it integrates with the user built-in mobile device
security mechanisms From the bank's point of view, mobile banking reduces the
cost of handling transactions by reducing the need for customers to visit a bank
branch for non-cash withdrawal and deposit transactions. Mobile banking does not
handle transactions involving cash, and a customer needs to visit an ATM or bank
branch for cash withdrawals or deposits. Many apps now have a remote deposit
option; using the device's camera to digitally transmit cheques to their financial
institution.The digital banking software is a one-stop banking, lifestyle, savings,
savings and shopping requires solutions from State Bank of India (SBI). Various
steps may be taken with this tool, including loan application, instant opening of a
savings account or even online shopping.

YONO(You only need one) is an integrated digital banking platform offered by

State Bank of India (SBI) to enable users to access a variety of financial and other
services such as taxi booking, online shopping or medical bill payments. YONO is
offered as a smartphone app for both android and iOS.

YONO was launched on Friday 24 November 2017 by Arun Jaitley, the finance
minister of India. YONO offers the ease of anywhere and also allows doing online
purchases at all major portals.
YONO CASH

YONO cash is a feature of the ‘YONO SBI’ app where we can withdraw money
from SBI ATMs without using ATM/Debit card. YONO cash is afeature attached
to the YONO SBI application which can be found under the head of YONO pay. It
is very simple and safe to use anyone who uses smartphone can use this feature.
YONO cash facility provided by only SBI, so for withdrawing the money, we will
need to visit a SBI ATM and not any other ATM. The SBI ATMs with the YONO
cash facility are known as the „YONO CASH POINT‟. To avail YONO Cash we
must have SBIs internet banking facility (INB) and YONO SBI app

PROCESS OF USING YONO APP

STEP1 : First log into SBI YONO APP

STEP2 : Now use the internet banking option for the registration process or the
user. Can even after enter their account details.

STEP3: Enter the account details including your ATM card number, followed by
ATM PIN and click on „submit‟ button. SBI Claims that they use the best data
security mechanism to ensure customer information is not compromised SBI
Claims that they use the best data security mechanism to ensure customer
information is not compromised like every banking app YONO is designed
toprovide all banking service with complete.
2.GENDER

OPTIONS NUMBERS OF RESPONSES PERCENTAGE

Male 56 56%

Female 44 44%

Chart Title
60

50

40 NUMBERS OF RESPONSES
PERCENTAGE
30 Series3

20

10

0
Male Female
 3 . What is your age ?

options numberof resonses percentage

20-25 81 80.2%
25-30 10 9.9%
30-35 9 8.9%
35-Above 1 9.9%

numberof resonses
90

80

70

60

50 numberof resonses

40

30

20

10

0
20-25 25-30 30-35 35-Above
4. PLEASE TICK YOUR OCCUPATION

OPTIONS NUMBER OF RESPONSES PERCENTAGE

STUDENT 81 81
BUSNISS 13 13
SALARIED PROFESSIONAL 5 5
OTHER 1 1

NUMBER OF RESPONSES
STUDENT BUSNISS
SALARIED PROFESSIONAL OTHER
1%
5%

13%

81%
5.Do ypu own a cell phone ?

Number of percentag
options Responses e
YES 93 92.079208
NO 7 6.9306931

Number of Responses percentage

NO 7 6.93069306930693

YES 93 92.0792079207921

0 20 40 60 80 100 120 140 160 180 200

6.Do you operate a bank account ?

number of percentag
options responses e
YES 89 88.11881
NO 10 9.90099

Chart Title
number of responses percentage Series3

NO 10 9.90099009900992

YES 89 88.1188118811881
7.Can you please tell me,what type of a bank account do you have ?

NUMBER OF
OPTIONS RESPONSES PERCENTAGE
CURRENT
ACCOUNT 55 55
SAVING ACCOUNT 37 37
BOTH 8 8

60 55

50

40 37

30

20

10 8

0
CURRENT ACCOUNT
SAVING ACCOUNT
BOTH

NUMBER OF RESPONSES
8.Do you use mobile banking ?
options Numbers of responses percentage
YES 81 80.19802
NO 15 14.851485

Numbers of responses

16%

YES NO

84%
9.Who provides your mobile banking service?

Chart Title
PERCENTAGE NUMBERS OF RESPONSES
2.9702970297029
Don't know / not sure 7
3
3.9603960396039
Another company 6
4
16.831683168316
A bank and a mobile operator together 9
17
36.633663366336
A mobile operator 6
37
39.603960396039
A Bank 6
40

10.In which year india’s first mobile banking was introduced ?

 NUMBERS OF
OPTIONS RESPONSES PERCENTAGE
2014 46 45.5445545
2015 29 28.7128713
2016 26 25.7425743

OPTIONS NUMBERS OF RESPONSES

PERCENTAGE
2500

2014 2015 2016

2000

1500

1000

500
45.54455445544 28.71287128712 25.74257425742
46 55 29 87 26 57
0
1 2 3
11.In 2016 ,india’s first mobile only bank was launched by which of the following
bank ?
NUMBERS OF PERCENTAG
OPTIONS RESPONSES E
ICICI bank 49 49
DBS (Development bank of singapore
Ltd 37 37
conda bank 14 14

Chart Title

conda bank

DBS (Development bank of singapore Ltd

ICICI bank

0 10 20 30 40 50 60

Series3 PERCENTAGE NUMBERS OF RESPONSES

12. In 2017,which bank had launched voice biometrics authentication for mobile
banking customers that would cilents to use their voice prints for authentication?