Term paper on the Mobile Banking (E-business)

1. Introduction
In this era of technology every company seeks to get competitive advantage using technology. In banking business there has been a lot of changes. Every bank approaches to better serve their customer in much more competitive ways. People prefer more convenient service rather than traditional banking system. Technology took place, service level went up & better security ensured. As trend of E-business becoming popular the E-banking process made a significant change in banking system. Through this path modern banks have started providing the service of Mobile Banking.

Mobile banking (also known as M-Banking, mbanking, SMS Banking) is a term used for conducting 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 can be said to consist of three inter-related concepts:

Mobile Accounting Mobile Brokerage Mobile Financial Information Services

Standard Chartered Bank provides this service in many countries including India, UK, Singapore, China, Lebanon, Kenya & Uganda. 2

Term paper on the Mobile Banking (E-business)

2. Company Description
2.1. History

Standard Chartered was formed in 1969 through a merger of two banks: The Standard Bank of British South Africa, founded in 1863, and the Chartered Bank of India, Australia and China, founded in 1853. Both companies were keen to capitalize on the huge expansion of trade and to earn the handsome profits to be made from financing the movement of goods between Europe, Asia and Africa. From the early 1990s, Standard Chartered has focused on developing its strong franchises in Asia, Africa and the Middle East. It has concentrated on consumer, corporate and institutional banking and on the provision of treasury services - areas in which the Group had particular strength and expertise. Since 2000 the Bank has achieved several milestones with a number of strategic alliances and acquisitions, which have extended the customer and geographic reach and broadened the product range that Standard Chartered offers. Standard Chartered has a network of over 1,700 branches and outlets and 5,600 ATMs in more than 70 countries and territories across the globe, making it one of the world's most powerful international banks.

2.2 Banking Services

1. Consumer Banking 2. Priority Banking 3. Private Banking 4. SME Banking 2

Term paper on the Mobile Banking (E-business)

5. Wholesale Banking 6. Saadiq Islamic Banking

2.3 ORGANIZATION STRUCTURE

Standard Chartered Bank has a formal structure. It has intra link system means one link system. The organization is a flat organization. Management Chart: Standard Chartered has a specific management hierarchy like G series in descending order. The hierarchy is below Managerial Ranks Descending order & Organization Chart G9: Officers of the bank. G8: Accounts managers. G7: Branch Manager G6: Regional Head G5: Branch Head G4: Dept head G3: Country head G2: Continent head G1: CEO

G1 G2 G3 G4 G5 G6 G7 2

Term paper on the Mobile Banking (E-business)

G8 G9 We can say the chart shows that first line employees come in G9 category and then it tends to G8.till G1. So this is in descending order, G9 Officers up to G1 CEO. ORGANIZATION MANAGEMENT HIERARCHY
CEO CEO

Executive Directors

Regional Managers

Regional Managers

Regional Managers

Branch Managers

Branch Managers

Branch Managers

Branch Managers

Branch Managers

Branch Managers

Term paper on the Mobile Banking (E-business)

3. Mobile Banking (E-business) of Standard Chartered Bank

E-Business is the integration of systems, processes, organizations, value chains and entire markets using Internet-based and related technologies and concepts. And modern banks are using mobile technology to conduct their business processes. In the initial days, Mobile usage by Banking and financial world was limited to the SMS or basic banking services etc. However the with the advent of technology, Mobile banking channel is offering many dynamic functionalities. With the advent of newer technologies bringing extensive use of Smartphone in the developed markets, Mobile Banking would find newer ways to connect with the customers and utilize the mobile channel comprehensively. Registration process for m-banking

You will be required to fill in a simple form to be handed in at any branch. Nominate the operating account number this can only be current and savings account, however not Safari Savings account.

Nominate a third party account(s) only to receive funds transfer. Provide your mobile number.

Term paper on the Mobile Banking (E-business)

All other facilities will be enabled automatically balance enquiry, transaction details, New cheaque book and bank statement request.

Then m-banking PIN will be mailed to the account holders preferred branch.

How m-banking works (Example):

Step 1- Simply dial *177# on your mobile phone Step 2- Enter your account number. Step 3- Enter your secret PIN Step 4- Choose from any of the services on the menu by typing the corresponding number.

Step 5- Your transaction will be processed Step 6- Then you will get a confirmation of your transaction together with your latest account balance.

Here are some transaction type and keyword-

Term paper on the Mobile Banking (E-business)

3.1 Utility of Mobile Banking for Banks

The Outset of Banking EnvironmentBanks, nowadays, are increasingly confronted with technology-savvy customers who are often on the move. Banks are responding to this change by introducing mobile services. Core target groups of Mobile Banking can be divided in three categories1. The Youngsters. 2. The adult people. 3. The business people. In order to cater to requirements of these above-mentioned customer groups banks tend to look at Mobile Banking as a promising option. However, these services apart from being an add-on feature for the targeted customer groups also have their own utility for the banks. 2

Term paper on the Mobile Banking (E-business)

Mobile Banking as Distribution ChannelMobile Banking enhances the number of existing channels of distribution that a bank employs to offer its services. The term distribution channel hereby signifies a medium of delivery that a vendor employs to deliver his products or services to customers. One of the primary tasks of a distribution channel is to increase the volume of demand for products at profitable prices. Mobile Banking can contribute to achieve this goal by following means: 1. Anytime, anywhere access to banking services 2. Availability of push services to suggest transactions on an urgent basis, e.g. to sell certain stocks when a crisis erupts; 3. Face-to-face talks with the personal consultant via video telephony.

Mobile Banking as Source of RevenueMobile Banking can also serve as a source of revenue. Mobile services can be offered on a premium basis. The price, in this case, should be reasonable enough so that customers are willing to pay them but at the same time they should be from a financial point of view higher than the costs incurred by the bank. Additional revenues can be generated in two ways:

1. Offering innovative, premium services to existing customers. 2. Attracting new customers by offering innovative services. Whereby, new customers contribute to revenue generation not only by utilizing mobile services but also by using other conventional distribution channels. 2

Term paper on the Mobile Banking (E-business)

Mobile Banking as Business ModelFinally, Mobile Banking can be also used as an image product to gain strategic advantages. A bank may hope to win or retain a positive image amongst technology-savvy sections of the society and strengthen the brand-reputation of being innovative and visionary [8]. The image of being a technology leader can help the bank win customers looking for modern products and services and at the same time help it retain its own existing base of technology-savvy customers, some of whom otherwise might have switched to other banks while looking for such a product. Further, the bank can profit from an early-mover advantage by actively shaping technological standards that are based on ones own strengths. This is, of course, fraught with a substantial risk of incurring financial and image losses if the propagated technology fails to establish.

Increasing Customer SatisfactionMobile Banking may help increase the customer satisfaction by following means: 1. Streamlining of business processes to increase efficiency 2. More attention and better consulting for customers due to automation of routine processes; 3. Innovative anywhere, anytime services customized for individual preferences and current geographic location of the customer provide value-added to the customer; 4. The collected data can be utilized to create customer profiles. Increased customer satisfaction can help reduce the customer attrition rate.

Mobile banking utility will help an organization to achieve these objectives-

Term paper on the Mobile Banking (E-business)

Customer communication and information Customer convenience Conduct Transactions Create customer centricity Enrich Mobile Banking experience to non-banking financial services Building the customer relationship Extract the best advantage of technology Provide value-added propositions Generate new revenue streams Reduce cost of transactions Achieve Multi-channel advantage Automate the servicing and support

Standard Chartered m-banking is a new revolution in banking. It literally puts banking under Customers thumb. Customer can avoid the queues and enjoy the convenience and security of mobile banking, wherever and whenever they need to, and 24 hours a day. Standard Chartered Mobile Banking gives fast access to bank account through mobile phone. It uses advanced USSD technology which means customer dont have to send an SMS or have to remember a long list of complicated codes. It works in all mobile phone handsets. This new technology means that there is no necessary to remember any transaction message formats.

3.2 Services
2

Term paper on the Mobile Banking (E-business)

Make a balance enquiry. Request a mini statement of last 3 transactions. Transfer funds across your accounts and other pre-nominated accounts in Standard Chartered Bank.

Pay utility bills. Request for chequebooks. Get alerts for withdrawals on your account.

Also, the transactions are limited to a single registered mobile number and, when you sign up you create a unique PIN which ensures that you and only you can access you accounts. Mobile banking is also much safer than SMS-based banking services as it has an in-built USSD encryption and no store just forward facility for performing secure transactions. This means that unlike an SMS-based service, there is no storage of data on your handset.

4. How it Works? (Mobile Banking Technology)

Standard Chartered mBanking proposition provides its customers with a number of services on a unique platform called USSD (Unstructured Supplementary Service Data). USSD is highly user-friendly, and provides an extremely convenient system for customers to access their banking requirements in real time. USSD is technology unique to GSM. It is a capability built into the GSM standard for support of transmitting information over the signaling

Term paper on the Mobile Banking (E-business)

channels of the GSM network. USSD provides session-based communication, enabling a variety of applications. Unstructured Supplementary Service Data (USSD) is a capability built into GSM phones, much like the Short Message Service (SMS). USSD is used by the mobile interaction business to send text between a mobile phone and an application program interacting promptly with end-user. USSD transactions only take place while mobile phones are turned on. USSD messages travel over SS7 signaling channels, providing a fast way for customer connections and data transfer. USSD transactions respond in less than a second.

USSD differs from SMS as follows: SMS uses a store and forward technique to deliver text messages: A text message is first sent to a senders Short Message Service Center (SMSC) before the SMSC tries to deliver the text message to the recipient. The sender receives an indication of whether the text was successfully received by the SMSC; however, the text message is not guaranteed to reach the recipient instantly.

Term paper on the Mobile Banking (E-business)

USSD information is sent directly from a senders mobile handset to an application platform handling the USSD service. The USSD service can be located either in the senders mobile network or in a visited mobile network. A real-time session is initiated between the mobile user and the USSD application platform when the service is invoked, allowing data to be sent back and forth between the mobile user and the USSD application platform until the USSD service is completed. This concept of a real-time data session is particularly useful if opting to build an interactive menu-driven application, such as a mobile-initiated Balance Enquiry and Top Up application, as described in the Example Menu-Driven USSD Application section.

Network Architecture for USSD Signaling

USSD services use the existing architecture of GSM networks. A user dialing a USSD service code initiates a dialog with a USSD application residing in a mobile network, as detailed in Figure 1. The Network Node, could be an MSC, VLR, HLR, or other network entity, such as an application platform, which has access to the specific USSD service.

Term paper on the Mobile Banking (E-business)

MMI strings are telephone numbers that could be dialed from a users mobile station or mobile handset to initiate USSD services. For example, a user could dial *#123# from the users mobile handset to reach a specific USSD service, where the USSD application itself resides in the users HPLMN. In this way, the application developer could decide to build, install, and advertise use of a USSD service such as a menu driven application within a particular mobile network. The new USSD service would be available worldwide to subscribers to that mobile service via the USSD service number. Example Menu-Driven USSD Application

One could decide to develop a mobile-initiated Balance Enquiry and Top Up application using USSD signaling, enabling a mobile user to interact with an application via the users handset, in order to view his/her current mobile account balance and top up as needed. 2

Term paper on the Mobile Banking (E-business)

An example of such an application could be as follows: 1. A mobile user initiates the Balance Enquiry and Top Up service by dialing the USSD string defined by the service provider; for example, *#123#. 2. The USSD application receives the service request from the user and responds by sending the user a menu of options. 3. The user responds by selecting a current balance option. 4. The USSD application sends back details of the mobile users current account balance and also gives the option to top up the balance. 5. The user selects to top up his/her account. 6. The application responds by asking how much credit to add? 7. The mobile user responds with the amount to add. 8. The USSD application responds by sending an updated balance and ends the session. Figure 2 shows an example of the MAP/TCAP message sequence required to realize the data transfers between a mobile users handset and the USSD application to implement the Balance Enquiry and Top Up service described above.

Term paper on the Mobile Banking (E-business)

Term paper on the Mobile Banking (E-business)

Notes on the USSD MAP/TCAP numbered message sequence shown in above Figure:

1. The mobile-initiated USSD service commences with a mobile user dialing the USSD string (for example, *#123#). A TCAP dialogue is initiated following this, with a MAP_PROCESS_UNSTRUCTURED_SS_REQUEST service component sent to the USSD application platform. 2. The USSD application platform receives the request to initiate a USSD service from the mobile user. The platform determines the specific USSD service requested by checking the USSD string dialed. The USSD platform requests additional information from the mobile user (balance notification or top up?) via the MAP_ UNSTRUCTURED_SS_REQUEST service. 3. The USSD platform receives the users response within a

MAP_UNSTRUCTURED_SS_REQUEST return result component. 4-7. The USSD application could request additional information from the mobile user several times for the same TCAP dialogue, each time the MAP_UNSTRUCTURED_SS_REQUEST service would be used, as shown in sequence 4 through 7. 8. Finally, the network USSD application platform ends the TCAP dialogue, sending MAP_PROCESS_UNSTRUCTURED_SS_ REQUEST return result ( Thank you for using XYZ).

This is the whole process how the system works: 2

Term paper on the Mobile Banking (E-business)

5. Security Issue

Term paper on the Mobile Banking (E-business)

This service much safer than SMS banking and other means. In SMS banking store and forward technique is used to deliver text messages: A text message is first sent to a senders Short Message Service Center (SMSC) before the SMSC tries to deliver the text message to the recipient. The sender receives an indication of whether the text was successfully received by the SMSC; however, the text message is not guaranteed to reach the recipient instantly. USSD is similar to IVR for to data security in that it opens a single session between the device and the USSD application at the network operator, processor, or bank. In other words the transaction is completed while the session is open and is not stored for subsequent completion.

The end-to-end transaction flow is across the encrypted GSM communication layer and the subscriber identity is also hidden. The data can also be encrypted as soon as it terminates at the USSD gateway sitting at the network operator, processor or bank, thus preventing any internal risk of misuse of data. Therefore the only risk is that the data carried within the communication layer is not itself encrypted. If someone were to be able to break the GSM encryption, they would have access to the data. In USSD the consumers sensitive data is typically kept on a server and not on the handset. This data is encrypted. The data entered into the handset is limited to authentication of the consumer (the PIN) and the banking instruction from the consumer, without having to enter account or personal details. The threat remains that if the handset and the SIM card and the authentication data is stolen, and used on the mobile banking channel to transact, then the consumer is at risk. The data is useless without these four elements. This is similar to the ATM Card and PIN environment.

6. Recommendations and Conclusions

2

Term paper on the Mobile Banking (E-business)

Mobile Banking has been in existence since more than a decade. However in the earlier phase of Mobile Banking was more used for quick reference to the banking transaction and balances esp. in SMS environment. However with the proliferation of multiple technologies in the hardware, infrastructure, network, software segments, the mobile banking has found its due recognition in last couple of recession. Less developed market could adopt transaction based mobile irrespective of the type of handset due to innovative products especially in fund transfer or remittances segment with collaboration between telecom companies, payment providers, banks etc and some of the selected features have been effectively utilized in these markets. In contrast to this, developed world excluding Far Eastern market could adopt the mobile Banking in a limited way especially due to multiplicities of the operators in this segment and heavily developed Internet Banking market. However with the high-featured mobile phones in Smart environment would definitely take mobile banking to the next height in next 3 to 4 years from now. Mobile Banking would be increasingly used from Building customer relations, reducing cost, achieving new revenue stream etc to that of connecting with the new customer segments, enhancing customer relationships to improve loyalty and reduce attrition, create new ways to generate lead in the process of prospecting, real time experience of bi-directional customer experience etc. And needless to say the technological revolution would play a major role in days to come.

7.0 References
www.standardchartered.com 2

Term paper on the Mobile Banking (E-business)

www.wikipedia.org www.netfors.com http://breeze.standardchartered.com/in