CHAPTER-1

OVERVIEW OF BANKING
Bank deals in money and credit. A bank is a factory manufacturer of credit. Bank get
money from the people on low rate of interest and gives loans to industrialists and
businessmen on high rate of interest. The difference between accepting deposits and
issuing loans is profit of the bank. The commercial banks work on commercial basis. The
aim of the bank is to earn profit. On the other hand the aim of central bank is not to earn
profit, but to regard the supreme interest of the country.
Finance is the blood of business. In modern time, it is not possible to start business
activities without the availability of adequate finance. Business enterprise requires funds
for the creation of fixed capital i.e. land, building, machinery and for the purchase of man
power, raw material, energy etc.
Business finance means anticipation acquisition and allocation of funds. Business finance
is defined as that business activity which is concerned with the acquisition and
conservation of capital funds in meeting the financial needs and overall objectives and
business enterprise.
The success and failure of business in private sector is linked with finance. Business
without finance is a just like a fish out of water. For proper working of assets, repair
renewal and maintenance is necessary. This work cannot be done without finance
Banking provides a safe place to save excess cash, known as deposits. It also supplies
liquidity to the economy by loaning this money out to help businesses grow and to allow
consumers to purchase homes, cars and consumer products.
Definition of Banking
A bank is a financial institution licensed by a government. Its primary activity is to
lend money. Many other financial activities were allowed over time. For example

banks are important players in financial market and offer financial services such as
investment funds.
Banking can also be defined as engaging in business of keeping money for saving
and checking accounts or for exchange or for issuing loans and credit.
Transaction business with banks; depositing or withdrawing funds or requesting
loans.
Banks a supply or stock held in reserve for future use (especially in
emergencies)
Meaning of Banking
An organization, usually a corporation, chartered by a state or federal government which
does most or all of the following:
Receive demand deposits and time deposits
Honor instruments drown on them and pay interest on them, discounts notes
Makes loans and invest in securities, collect checks, drafts and notes Certifies depositors
checks and issue drafts and cashier checks

Mobile Banking
Mobile Banking refers to provision and availment of 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 this model Mobile Banking can be said to consist of three inter-related
concepts:
Mobile Accounting
Mobile Brokerage
Mobile Financial Information Services
Most services in the categories designated Accounting and Brokerage are transactionbased. The non-transaction-based services of an informational nature are however
essential for conducting transactions - for instance, balance inquiries might be needed
before committing a money remittance. The accounting and brokerage services are
therefore offered invariably in combination with information services. Information
services, on the other hand, may be offered as an independent module. Mobile phone
banking may also be used to help in business situations
MOBILE BANKING TRANSACTIONS
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
Yorks Chemical Bank introduced to the American public in 1969. It did little more than
dispense c at first, but the ATM evolved over time to become a true bank-away-frombank, 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.
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. The biggest issue, however, is
mobility. Even with a laptop its 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. Worldwide there are more than 3.25 billion mobile phone subscribers,
with penetration topping 100 percent in Europe.
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.
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 Rs 100 -- and the

bank generates an automatic message any time that rule applies. 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.. The chart below
summarizes these various types of mobile banking services.
Push
Transaction

Inquiry

Minimum balance sheet

Credit/ debit alert
Bill payment alert

Pull
Funds transfer
Bill payment
Share trade
Check order
Account balance inquiry
Account statement inquiry
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
isnt always full service banking.
MOBILE BANKING SCENARIO
The growth of mobile banking technology is increasingly hard to ignore. Nearly 50
percent of all mobile users in the United States will be using mobile banking within four
years and that nearly 50 percent of iPhone and other Smartphone users already use
mobile financial services today.
With 2010 being the year in which mobile banking broke into the mainstream, 2011 will
be the year in which financial institutions will look to capitalize on the full potential of
the mobile channel -- moving from basic user functionality to full mobile finance; or,
Your bank in your pocket.

Where We Are Now

The majority of banks currently are in transition between their introductory mobile
solutions and a second generation of offerings with greater capabilities. The introductory
mobile offerings. most banks deploy closely mirror users online experiences. While this
is a fraction of the full potential of the mobile channel, it is an essential stepping-stone to
move users from the branch and online banking to their own handsets for financial
interaction.
While the mobile channel still is far from being definitively proven, consumers demand
it. Banks are moving from one-way alerts and simple notifications to proactive content in
the form of real time, actionable alerts. These are personalized, two-way alerts that
enable customers to quickly and easily take action directly on their mobile devices in
response to previously set alert thresholds or financial events as defined by the consumer.
For instance, if a customers account balance falls below a predefined threshold, an
actionable alert is sent to the customer, who can then instantly transfer funds by
responding to the alert.
Where Were Going
As mobile banking gives firms the ability to fully engage in conversations with customers
through their mobile devices, coordination of a business workflow across different
banking systems is required. In order to accomplish this, mobile banking providers must
establish open ways to access these different sources of information. This connectivity
is crucial to delivering fully mobile banking.
By opening up the mobile channel to multiple back-end and third-party systems or
networks such as Visa Net, mobile payments hubs such as Cash Edge or PayPal, remote
check-deposit capture technologies such as those offered by Mitek, or contextual
marketing systems capable of determining when to present offers, banks can capitalize on
the full capabilities of the mobile phone as a consolidation point of all other existing bank

channels -- e-mail, online, customer service, and mobile-specific SMS or push

notification alerts.
In order to provide authoritative value to customers and produce strong adoption (and
with it, definitive ROT), third-generation mobile banking solutions must empower
institutions to use the mobile channel as an extension of and integrative point for existing
technologies. This will instantly resolve consumer issues and complete tasks faster and
more economically -- making alerts fully actionable.
Many financial institutions and mobile vendors today, however, still are tied to basic core
functionality, either because they developed a non-scalable, non-adaptable elementary
mobile solution, or because they signed binding contracts with core financial technology
providers in order to rush a baseline mobile solution to market. The smart mobile banking
solutions of tomorrow must anticipate the future expectations of consumers and
recognize the potential that the mobile channel represents -- a technology set to increase
customer loyalty and satisfaction via conversation creation.
Trends in mobile banking
The advent of the Internet has enabled new ways to conduct banking business, resulting
in the creation of new institutions, such as online banks, online brokers and wealth
managers. Such institutions still account for a tiny percentage of the industry
Over the last few years, the mobile and wireless market has been one of the fastest
growing markets in the world and it is still growing at a rapid pace. According to the
GSM Association and Ovum, the number of mobile subscribers exceeded 2 billion in
September 2005, and now exceeds 2.5 billion (of which more than 2 billion are GSM).
With mobile technology, banks can offer services to their customers such as doing funds
transfer while travelling, receiving online updates of stock price or even performing stock
trading while being stuck in traffic. Smartphones and 3G connectivity provide some
capabilities that older text message-only phones do not.

All be using mobile banking till 2010. Upwards of 70% of bank center call volume is
projected to come from mobile phones. Mobile banking will eventually allow users to
make payments at the physical point of sale. Mobile contactless payments will make up
10% of the contactless market till 2010. Another study from 2010 by Berg Insight
forecasts that the number of mobile. banking users in the US will grow from 12 million in
2009 to 86 million in 2015. The same study also predicts that the European market will
grow from 7 million mobile banking users in 2009 to 115 million users in 2015.
Many believe that mobile users have just started to fully utilize the data capabilities in
their mobile phones. In Asian countries like India, China, Bangladesh, Indonesia and
Philippines, where mobile infrastructure is comparatively better than the fixed-line
infrastructure, and in European countries, where mobile phone penetration is very high
(at least 80% of consumers use a mobile phone), mobile banking is likely to appeal even
more.
Mobile banking business models
A wide spectrum of Mobile/branchless banking models is evolving. However, no matter
what business model, if mobile banking is being used to attract low-income populations
in often rural locations, the business model will depend on banking agents, i.e., retail or
postal outlets that process financial transactions on behalf Telcos or banks. The banking
agent is an important part of the mobile banking business model since customer care,
service quality, and cash management will depend on them. Many Telcos will work
through their local airtime resellers. However, banks in Colombia, Brazil, Peru, and other
markets use pharmacies, bakeries, etc.

A wide spectrum of mobile/branches banking models is evolving. These models differ

primarily on the question that who will establish the relationship (account opening,
deposit taking, lending etc)with the end customer, the bank or the non- bank
telecommunication company (Telco). Models of branches banking can be classified into
three broad categories bank focused, bank -led non bank led.
Bank focused model
The bank focused model emerges when a traditional bank uses non-traditional low cost
delivery channels to provide banking services to its existing customers.
Example Range from use of automatic teller machine (AIMs) to internet banking or
mobile banking to provide certain limited banking services to banks customers. This
model is addictive in nature and may be seen as modest extension of conventional branch
based banking
Bank-led model
The bank-led model offers a distinct alternative to conventional branch-based banking in
that customer conducts financial transactions at the whole range of retail agents (or
through mobile phone) instead of at bank branches or through bank employees. This
model promises the potential to substantially increase the financial services outreach by
using different delivery channels (retailer/mobile phone),a different trade partner (Telco
chain store) having experience and target market distinct from traditional banks, and may

be implemented by either using Correspondent arrangements or by creating a JV between

bank and Telco/non-bank, in this model customer account relationship rests with the bank
Non bank-led model
The non-bank-led model is where a bank does not come into the picture. (Except possibly
as a safe keeper of surplus funds) and the non bank (e.g. Telco) performs all functions.
Mobile banking in India
Over the last few years, the mobile and wireless market has been one of the fastest
growing markets in the world and it is still growing at a rapid pace. Mobile phones have
become an essential communication tool for almost every individual. Advent of m
Commerce has managed to take mobile VAS to next level, adding tremendous value to
telecommunication industry. Mobile banking which is an integral part of commerce has
become very popular among mobile users ever since its existence in 2007. It creates new,
convenient communication and fast financial transactional channel for mobile users
which is accessible from anywhere, anytime.
Checking account information, balance available, credit/debit card information, cheque
status, setting alerts, payment reminders, locating ATMs and bank branches, accessing
mini statement, accessing loan and equity statements, insurance policy management,
placing orders for cheque books etc via mobile phones are some of the services offered in
mobile banking. With multiple access channels such as SMS, downloadable client,
mobile Internet (WAP) mobile banking is encouraging mobile users more to explore the
service.
Mobile banking services
In April 2009 for Feb/March mobile banking urban Indian customers checking account
balance is the most frequently cited reason for using mobile banking. 40 million Urban
Indians used their mobile phones to check their bank account balances followed by
viewing last three transactions. ICICI bank continues to maintain its leadership extending

in mobile space, 42% of all mobile banking users bank with ICICI, followed by HDFC
(25.3%).
Mobile banking: Most popular services and income profile

Figure -1 Statistics on most popular mobile banking services

Filtering the data further to understand which income groups in urban India use mobile
banking more. As depicted in the chart below, mobile banking is most used by
subscribers falling in Rs. 1 Lakh to Rs. 2.99 Lakhs income bracket followed by less than
Rs 1 Lakh income bracket. Therefore it is observed, mobile banking is more popular
among low income group of mobile users than higher income group of mobile users.

Figure -2 Mobile banking users Income profile

Many believe that mobile users have just started to fully utilize data capabilities in their
mobile phones. Service providers are every day coming up with new services, providing
methods to make the solution more easy to use, implementing techniques to improve
security, launch of 3G is providing higher data transfer rate and invention of new phones
more frequently is driving mobile users towards subscribing to mobile banking services.
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 today. Various players involved in providing mobile
banking services (banks, financial institutions, service providers, operators etc) are
therefore expecting a potential growth in mobile banking industry in India.

MOBILE BANKING GLOBAL PROSPECTIVE

Mobile banking has come in handy in many parts of the world with little or no
Infrastructure development, especially in remote and rural areas. This part of the mobile
commerce is also very 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.
Countries like Sudan, Ghana and South Africa received this new commerce very well. In
Latin America countries like Uruguay, Paraguay, Argentina, Brazil, Venezuela, Colombia,
Guatemala and recently Mexico started with a huge success.
In Colombia was released with Redesign. In Iran banks like Persian, Tejarat, Mellat,
Saderat, Sepah, edbi and bankmelli offer this service. Guatemala have the support of
Banco industrial. Mexico released the mobile commerce with Omnilife, Bancomer and a
private company (MPower Ventures). Kenyas Safaricom (Part of the Vodafone Group)
has had the very popular M-Pesa Service - mainly used to transfer limited amounts of
money, but has been increasingly used to pay utility bills. Zain in 2009 launched their
own mobile money transfer business known as ZAP in Kenya and other African
countries.

Telenor Pakistan has also launched Mobile banking solution, in coordination with
Taameer Bank, under the label Easy Paisa. Telenor rolled out its Mobile banking
solution in Q4, 2009. It was a huge success and customers embraced the wide set of
services offered. Eko India Financial Services the is business correspondent of State Bank
of India (SBI) and ICICI Bank, Indias top two largest banks, and provides no-frills bank
accounts and deposit, withdrawal and remittance services to customers (nearly 80% of
whom are migrants or the unbanked section of the population) through mobile banking.,
and also offer micro-insurance and micro-finance facilities to its customers.

Technologies Behind Mobile Banking

Technically speaking most of these services can be developed using more than one
channel. Presently, mobile banking is being deployed using more than one channel.
Presently, Mobile
Banking applications developed on one of the following four channels.
1. IVR(interactive voice response)
2. SMS(short messaging services)
3. WAP(wireless access protocol)
4. Standalone Mobile Application Clients
IVR (interactive voice response)
TVR or interactive voice response services operate through pre- specified numbers that
banks advertise to their customers. Customers make call at the IVR number and are
usually greeted by stored electronic message followed by a menu of different options.
Customers can choose option by pressing the corresponding number in their keypads, and
then read out the corresponding information, mostly using text to speech program.
Mobile banking based on IVR has some major limitation that can be used only for
enquiry based services. Also, IVR is more expensive as compared to other channels as its
involves making a voice calls which generally more expensive than sending an SMS or
making data transfer(as in WAP or Standalone clients).

One way IVR is by deploying a PBX system that can host IVR dial plans.
Banks looking to go the low costs way should be considering evaluating asterisk, which
is an open source Linux PBX system
SMS- Short messaging service
SMS uses the popular text messaging standard to enable mobile application based
banking. The way this works is that the customer request for information by sending an
SMS containing a service command to pre-specified number. The bank responds with a
reply SMS containing the specific information.
For e.g. customers of the HDFC bank in India can get their account balance details by
sending the keyword HDFCBAL and receive their balance information again by SMS
However there have been few instances even transaction based services have been made
available to customer using SMS. For instances, customer of the centurion bank of
Punjab can make fund transfer by sending SMS TRN (A/C NO) (PIN NO)
(AMOUNT). One of other reason the transaction based services have not taken of on
SMS is that almost all mobile phones are SMS enabled.
An SMS based services is hosted on SMS gate way that further connects to the mobile
services providers SMS centre. There are a couple of the hosted IP based SMS gateways
available in the market and also some open source ones like kennel

WAP- Wireless Access Protocol

WAP uses concepts similar to that used in the internet banking. Banks maintain WAP
sites which customers access using a WAP compatible browser on their mobile phones.
WAP sites offer the familiar form based interface and can also implement security quite
effectively. Bank of America offers a WAP based services channel to its customers in
Hong Kong. The banks customers now have anytime, anywhere access to a secure
reliable services that allows them to access all enquiries and transaction based services
and also more complex transactions like trade in securities through their phone.
A WAP based services requires hosting a WAP gateways. Mobile Application users
access the banks site through the WAP gateways to carry out transaction, much like
internet users access a web portal for accessing the bank services.
The following figure demonstrates the framework for enabling mobile application over
WAP. The actually forms that go into a mobile application are stored on a WAP server,
and served on demand. The WAP gateway forms an access point to the internet from the
mobile network.

Standalone Mobile Application Clients

Standalone Mobile Application is the ones that hold out the most promises as they are
most suitable to implement complex banking transactions like trading in securities. They
can be easily customized according to the user interface complexity supported by the
mobile. In addition, mobile applications enable the implementation of a very secure and
reliable channel of communication.

One requirement of mobile application clients is that they require to be downloaded on

the client device before they can be used, which further require the mobile device to
support one of the many development environments like J2ME or Qualcomms
BREW,J2ME is fast becoming an industry standard to deploy mobile application and
requires the mobile phone to support java.
The major disadvantages of mobile application clients are that the applications to be
customized to each mobile phones on which it might finally run. J2ME ties together the
API for mobile phones which have the similar functionality in what it calls profiles
Out of J2ME and BREW, J2ME seems to have edge right now as Nokia has made the
development tools open to developers which has further fostered a huge online
community focused in developing application based on J2ME. Nokia gone an additional
mile by providing an open online market place for developers where they can sell their
application to major cellular operators around the world.
Quite a few mobile software product companies have rolled out solutions, which enable
J2ME mobile application based banking. Once such product is wireless 1-banco. The
mobile user downloads and installs the wireless 1-banco server through the services
providers GSM networks to enable users to access information about their accounts and
perform transactions. One of the other big advantages of using a mobile application client
is that it can implement a very secure channel with end-to-end encryption.
However country like India faces a serious obstacle in the proliferation of such clients as
few users have mobiles, which support J2ME or BREW However, one of the biggest
CDMA players in Indian telecom industry, Reliance infocomm has about 7.01 million
users all which have handsets, which support J2ME. Reliance has unveiled one of the
most ambitious data services deployment program in the country. On the other hand a
country like South Korea with its tech savvy population has widespread adoption of the
higher-end mobiles, which support application development.

Lists of banks provide this facility

Allahabad bank
Andhra bank
Axisbank
Bank of India
Bank of maharastra
Bank of rajasthan
Canara bank
Central bank of India
Corporation bank
Dena bank
Deutsche bank

Dhanlakshmi bank

Hdfc bank

Federal bank

ICICI bank

IDBI Bank

Indian bank

Indian overseas bank

Ing vysya bank

Jammu & Kashmir bank

Karnataka bank

Karur vysya bank

Kotak mohindra bank

Lakshmivilas bank

Oriental bank of commerce

Punjab national bank

Standard charted bank

State bank of Hyderabad

State bank of India

State bank of my sore

State bank of Patiala

State bank of Travancore

South Indian bank

Syndicate bank

Uco bank

Union bank of India

United bank of India

Vijaya bank

Yes bank

Mobile Banking Services

Mobile banking can offer services such as the following:
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 I equity statements
7. Insurance policy management
8. Pension plan management
9. Status on cheque, stop payment on cheque
10. Ordering cheque books
11. Balance checking in the account
12. Recent transactions
13. Due date of payment (functionality for stop, change and deleting of payments)
14. PIN provision, Change of PIN and reminder over the Internet
15. Blocking of (lost, stolen) cards
Payments, Deposits, Withdrawals, and Transfers
1. Domestic and international fund transfers
2. Micro-payment handling
3. Mobile recharging
4. Commercial payment processing
5. Bill payment processing
6. Peer to Peer payments.
7. Withdrawal at banking agent
8. Deposit at banking agent

A specific sequence of SMS messages will enable the system to verify if the client has
sufficient funds in his or her wallet and authorize a deposit or withdrawal transaction at
the agent. When depositing money, the merchant receives cash and the system credits the
clients bank account or mobile wallet. In the same way the client can also withdraw
money at the merchant: through exchanging sms to provide authorization, the merchant
hands the client cash and debits the merchants account.

Strategy
Dual Strategy for Rural and Urban Segments
Indian mobile banking has two major segments: the urban segment and the rural segment.
Celent estimates that urban mobile banking subscribers will reach 65 million by 2012.
The rural mobile segment represents a huge opportunity to bank the unbanked
population, thereby adding a revenue stream.
In a new report, Mobile Banking in India; Dual Strategy for Rural and Urban
Segments, Celent explains the mobile banking ecosystem in India and looks at the trends
driving the growth in its urban and rural sub segments. The report looks at the prospects
of mobile banking from both a regulatory perspective and an industry perspective.
In Indias urban segment, mobile banking is an enabling fifth channel, and in the rural
segment, mobile banking is a primary mode of financial inclusion. In both segments, the
two fundamental factors affecting the growth of mobile banking are regulations and
technology. No transactional users will remain the majority in India because they will
continue to use online banking and other payment mechanisms. Government-to-person
(G2P) payments will be the major growth driver for rural mobile banking. Regulatory
changes are also a big driver. Celent believes that, by 2012, over 60 million rural users
will be beneficiaries of mobile banking through business correspondence.

While the urban banking market is dominated by information services, the payment
transactions segment has not picked up mainly due to regulatory limitations, says Rajesh
M R, an analyst with Ceient and coauthor of the report. However, recent relaxation of
payment norms by RBI has presented a huge opportunity for this segment.

Advantages
Huge subscriber base across India of approximately 400 Million: A Banks mobile
banking Sales & Marketing plan will certainly cover almost all of a banks customers
and it is certainly a large prospect base. Even a city or region-based Sales &
Marketing plan will cover a huge number of prospects. Today banks and other retail
industries are heavily using SMS for promos. Even your local insurance agent may be
using some form of bulk SMS service for new schemes or promos
Utility: Users are familiar with a cell phone and will probably adapt quickly to mobile
apps and mobile banking apps. Note that there are so many people in India using a
mobile and not the Internet (Mobile: 400 Million, Internet: 50 Million).
Rural Reach: Coming to last mile connectivity which is more difficult in rural areas
(maybe due to technological limitations like wire length of not more than 2.5 kms

from the Telephone exchange to a consumer) the Mobile channel may offer better
reach
Bringing costs down for other channels: If one can access bank services on the
mobile banking application, he or she would not call the Call Center or log on to
Internet Banking
Business Channel: This is a completely untapped business channel for banks that
have already launched Mobile Banking, probably due to a combination of reasons
including lack of real estate (or screen space) on the Mobile Banking screen, the
primary outlook of the bank of this being a Service Delivery Channel or user nonfamiliarity with mobile applications. There is also huge cross-sell leverage that may
be obtained by integrating Mobile Banking with Mobile Commerce
Customer Adoption Plan: There are vast challenges involved. Most banks dont
even have the Mobile numbers of all their customers. Do they get the customers to
adopt when they walk into a branch otherwise is there an alternate route? There is also
an RBI requirement here

CHALLENGES OF THE M-BANKING REVOLUTION

Operational Risk:
Operational risk, also referred to as transaction risk the most common form of risk
associated with mobile banking
Its takes them from inaccurate processing of transaction, non-enforceability of
contracts, compromise in data integrity, data privacy and confidentiality,
unauthorized access/ intrusion to bank system and transaction, etc.
Such risks can arise out of the weakness in the design, implementation and
monitoring of banks information system
Besides inadequacies in technology, human factor like negligence by customer and
employee, fraudulent activity of employee and crackers! hacker, etc can become a
potential source of operational risks

Reputation Risk:
Reputation risk is the risk of getting significant negative public opinion, which
may result in a critical loss of funding or customer. Such risks arise from action
which causes a major loss of public confidence in the banks ability to perform
critical function or impair bank-customer relationship. It may due to banks own
action or due to third party action.
The main reason for this risks may be the system or product may not be working
to the expectation of the customers, significant security breach (both internal or
external attack), inadequate information to the customer about the product use and
problem resolution procedures, significant problems with communication
networks that impair customer access to their funds or account information
especially if there are no alternative means of account access]
Legal Risks:
Legal risks arise from violation of, or non confidence with laws, rules, regulations,
or prescribed practices, or when the legal rights and obligation of parties to
transaction are not well established.
A customer inadequately informed about his rights and obligations, may not take
proper precaution in using mobile banking products or services, leading to
disputed transaction, unwanted suits against the bank or other regulatory sanctions.
Strategic Risk:
For reducing such risks, banks need to conduct proper survey, consult experts from
various fields, establish achievable goals and monitor performance.
Also they need to analyze the availability and cost of additional resources,
provision of adequate supporting staff, proper training of staff and adequate
coverage.
Risk of unfair competition:

 Mobile banking is going to it the competition among various banks. The open
nature of mobile may induce few banks to use unfair practices to take advantages
over rivals.
Thus, one can find that along with the benefits mobile banking carries various
risks for bank itself as well as banking system as whole.
Security Risk:
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.
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.
Authentication of the device with service provider before initiating a transaction.
This would ensure that unauthorized devices are not connected to perform
financial transactions.
User ID / Password authentication of banks customer.
Encryption of the data being transmitted over the air.
Encryption of the data that will be stored in device for later / off-line analysis by
the customer.
Other risk:
Focus: Insufficient attention is being given by a banks business and IT on the
potential of this channel
High GPRS based Internet cost for the User: The application should use
minimal bandwidth to provision for maximum savings to the end-user
Targeting the right customer for the right product: Should the bank target their
own customers or should it target other banks customers. This needs extensive
customer profiling of back end bank applications for targeted campaigns
Lack of mass adoption: There are large as well as niche product companies in
this space offering Mobile Banking Applications. However, the apps can be
completely developed and tested only under mass usage conditions and over time

 Lack of support for all handsets: There are many handset models across 5-10
mobile manufacturers, there are also Mobile Operating System variants
Regulatory restrictions on limits on transactions: This is of course necessary
till security evolves

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.
One-time password (OTPs) is 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 is received
the password is sent to the consumers 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.

Top 9 Security Threats of 2011

Mobile banking and social networks are expected to pose new security threats in the
payments space in 2011. But security experts say those threats wont displace the Zeus
botnet, malware attacks and phishing threats, which for years have plagued banking
institutions. Fraud attempts will escalate, not diminish, as new threats and channels
blossom in 2011.

The top 9 threats of 2011 include:

1. Mobile Banking Risks
Mobile phones used for banking are on the rise, but mobile security is proving
increasingly challenging for banks and credit unions, as controls put in place to protect
traditional online banking do not translate well when applied to mobile.
Mobile banking applications from Bank of America, Chase, Wells Fargo and TD
Ameritrade have all suffered from security flaws, and CitiGroup in 2009 noted
vulnerabilities when it learned some banking apps stored sensitive user details in hidden
files on smart phones.
Until recently, functionality for mobile banking was fairly limited. But as mobile
application robustness has increased, so, too, have security risks. McNelley, an analyst at
Aite Group, says, Many banks seem to be reliving all the hard lessons of the early days
of online banking. Mobile malware is an emerging threat, and Zeus attacks, such as
Mitmo aimed at mobile, have already been identified.
But RSA security researcher Rivner slightly disagrees. Mobile banking apps will not be
a primary target for fraudsters, he says. Instead, he believes mobile browsing will be
more targeted in the coming year, since most mobile users continue to use their online
banking sites to conduct banking functions.

2. Social Networks and Web 2.0

The connection between mobile phones and social media is growing, with Twitter and
Facebook apps offered for mobile users. Institutions embracing mobile also are
embracing social networking, says Rasmussen, Internet Identitys chief technology
officer. With more banks on social networks, expect to see more fake sites using social
networks, like Twitter and Facebook, to try and trick people into giving up vital personal
information, including banking login credentials and Social Security numbers, he says.
But external threats arent the only risks. Social networking sites are also a venue for an
institutions own employees to intentionally or inadvertently expose sensitive
information. To mitigate internal risks of data leakage, its important for organizations to
spell out social networking policies to employees. They must know when and how to use
social networks in the course of their jobs, as well as what information is/is not ap
3. Malware, Botnets and DDoS Attacks
Distributed denial-of-service or DDoS, attacks, as seen in the wake of the recent
WikiLeaks incidents are likely to increase. In fact, the WikiLeaks-inspired attacks against
leading e commerce sites have fueled interest among fraudsters, says RSAs Rivner.
Botnet operators now see opportunity for additional income.
Even with the takedown of the Mariposa Botnet earlier this year, banking institutions are
expected to face growing challenges in the fight against DDos attacks.
Attacks are also getting more sophisticated. The No. 1 banking-credential-stealing Trojan,
Zeus, is used by hundreds of criminal organizations around the world, so add-ons are
prevalent. This year alone, Zeus has been linked to some $100 million in financial losses
worldwide, according to the Federal Bureau of Investigation. Rasmussen says Zeus
anonymous programmer, who launched the Trojan in 2007, is likely to come out with a

new and improved Zeus variety in 2011. There is a good chance that he will soon
emerge with even more powerful ways to steal, he says.
Concerted attacks launched against online banking sites will likely make stronger
authentication a necessity, says Eisen, founder of 41st Parameter. The amount and
velocity of fraud could force new and stronger authentication methods and more stringent
procedures, such as dual- signatures and dual authentications, he says.
4. Phishing
Sophistication in phishing, smishing and vishing attacks also is increasing, Fraudsters
now create very polished messaging that targets everything from bank accounts to
Amazon accounts, In fact, respondents to the recent Faces of Fraud survey say
phishing/vishing attacks rank No. 3 among fraud threats.
To fight these incidents, inroads in consumer educatipn have been made, but the social
engineering techniques that have made phishing a success are now trickling down to
land-line and mobile phones. Phishing will be used as a general purpose tool that
leverages a recognized brand, but doesnt try to attack them directly, Rivner says.
Nonetheless, the damage to the brands reputation (in the eyes of the victimized
consumers) could be costly.
5. ACH Fraud: Corporate Account Takeover
In 2010, ACH fraud resulting in corporate account takeovers saw a dramatic increase and
made for some of the years most compelling reading. We witnessed banks suing
customers and customers suing banks over the responsibility for fraud incidents and
losses.
In 2011, commercial banking attacks are expected to rise, experts say, especially as manin- middle or man-in-the-browser, also known as MitB, schemes increase.
MitB attacks targeting two-factor authentication intensified in 2010, requiring
commercial banks to deploy additional lines of defense, such as out-of-band
authentication, desktop hardening and anti-Trojan services. .With some gangs stealing

millions from just a few victims, expect more and more criminals to pile on the easy
money bandwagon, Rasmussen says. As the MitB attacks get easier, less sophisticated
criminals are expected to target consumer accounts, too, despite smaller returns.
6. Cloud Computing
Cloud computin2 is touted for its ability to curb fraud, but fraudsters are working
overtime to create new threats in what Rivner calls the Dark Cloud. He predicts
fraudsters will hone their ability to exploit new and yet-unknown cloud vulnerabilities.
Rivner says institutions can expect in 2011 to see cloud-targeted Trojans, like Oakbot that
focus on a geographic region and/or specific banking sectors.
But movement to the cloud is definitely on the horizon, as more financial institutions
gradually warm to non-localized content management. Jeff Reich director of the Institute
of Cyber Security at the University of Texas in San Antonio, says the biggest barrier to
cloud computing has been the fear of data security. Now that fear is diminishing, the use
of cloud computing by banks and credit unions is expected to take off. But, like any new
or emerging technology, the cloud will face challenges, Reich says.
Cloud computing, in particular, is thought to be failsafe, he says. People sometimes
think there is no hardware involved ... and, as a result, it will never fail. So its one thing
to keep in mind: Cloud computing is not limitless. Every cloud has its own boundaries.
7. Inside Attacks
Malicious attacks or hacks are often launched inside an organization by a disgruntled
employee. But the inside threat also may be posed by an outside person who uses false
credentials to pose as an insider to illegally gain access to internal servers and systems.
Kirk Nahra a privacy expert and attorney, says most compromises of internal data can be
traced back to an employee. Thats especially true when the information thats been
compromised involves the theft of an identity. But Nahra is quick to point out that not all

compromises are intentional and malicious. The problem: companies and financial
institutions have not properly limited access to databases and files that contain sensitive
information.
Go into your company and does a real thorough audit or a review, he says. Doing that
kind of a survey or audit, I think, can really do a very significant job of reducing -- not
eliminating, but reducing -- these problems, because it cuts down so many of the places
where information just simply doesnt need to be.
WikiLeaks serves as a prime example of how insider threats can pose significant security
risks. The controversy brewed when an Army private allegedly accessed and downloaded
classified information that he later sent to WikiLeaks. Though the private had some
security clearance, he did not necessarily have authorization to access and download the
classified files he leaked.
Aites McNelley says its often all too easy for employees to illegally grab sensitive
information. Its the little things that lead to most internal compromises, like walking
away from your desk and not locking your. screen, she says. A lot of that kind of thing
slips through the cracks. Internal fraud is still one of the biggest issues in financial
services, she says, especially since the embezzlement of funds and the compromise of
consumer financial information is so tempting.
As RSAs Rivner points out, the challenges posed by outsiders are just as alarming, since
many take aim at government and bank employees. Noting Operation Aurora as an
example, Rivner says insiders can unknowingly pose threats, especially when they are
targeted by sophisticated hackers. Some of those affected were from the financial sector,
which shows bank employees are a valid target for cybercriminals, he says. At times, I
see these hijacked resources communicating with the Trojan mother ship, while within
the corporate firewall.

8. First-Party Fraud
First-party fraud continues to pose security challenges. Also known as advances fraud,
out fraud, application fraud, friendly fraud and sleeper fraud, first-party crime
typically involves a customer applying for and accepting credit with no intention of
repayment. First-party fraud applicants can use synthetic identification or misrepresent
their real identities.
Jasbir, Anand, a senior solutions consultant and security expert at AC Worldwide, says
the British Bankers Association estimates between 10 percent and 15 percent of bad debt
losses may result from first-party fraud. Specialized criminal gangs now target financial
institutions with counterfeit identification and advanced knowledge of lending practices,
he says. Once an identity is established, the fraudster builds credit and applies for
multiple financial products.
9. Skimming
in 2010, card skimming of all types took off, including traditional ATM skimming and
new incidents at merchant point-of-sale systems and self-service gasoline pumps. Even
though skimming incidents are localized, they represent a growing problem. The advent
of ATM or flash attacks reveals growing sophistication and coordination among
counterfeit-card operations. Blitz or flash attacks involve the simultaneous withdrawal of
funds from multiple ATMs in different locations, sometimes scattered throughout the
world.
Avivah Litan, vice president and distinguished analyst at Gartner, says flash attacks will
pose increasing challenges, since they fly under the radar of most fraud-detection
systems. Banks can stop it if they can figure out the point of compromise, but many
have a hard time doing that with current fraud-detection solutions, she says.
The technology behind skimming is reaching new levels of sophistication, says Jeremy
King European regional director for the Payment Card Industry Security Standards

Council. Fraudsters throughout the world rely more on wireless communications to

transmit skimmed card data. Improving awareness is important, King says, and the
PCI PED standard is addressing some of the global card skimming trends we are seeing.
Stronger cardholder authentication through contactless radio-frequency identification
payments or contact chip technology such as EMV could address some of these emerging
fraud concerns, says Chuck Somers, vice president of ATM security and systems for
Diebold Inc. Anything beyond better authentication would involve changing the whole
infrastructure, Somers say

SUGGESTION TO OVERCOME CHALLENGES

Stock up on passwords...
When considering using a mobile payment system, look for as many security features as
possible, says Ondrej Krehel, an information security officer for Identity Theft 911, an
identity- theft resolution service in Scottsdale, Ariz. For instance, a mobile-payment app
that offers protection through a PIN number and password can be more secure than an
app that requires only one of the two. Users should make sure their phone and its
subscriber identity module, or SIM, card -- a chip that houses a phones subscriber
information and vital numbers -- are protected, as well. What can happen is even if
cant use your phone, they can use your account via your phones SIM card, Krehel
says. All they need to do is put it into another phone and access your information.
Make sure theyre strong
Consumers often use the same password for multiple applications, including email,
Facebook, retail web sites and banking applications. Thats a mistake, Krehel says.
Instead, users should keep their mobile device separate from their personal life by using
separate credentials for each platform, he says. Also, users should select passwords that
are comprised of at least eight random characters including capital letters, lower-case
letters, numbers and special characters. He also recommends changing them often. Users
who think they might forget multiple passwords might try encrypted password
management programs, such as Bruce Schneiers Password Safe or KeePass Portable, the
mobile version of KeePasss open source password manager.
Dont store sensitive information
Avoid storing sensitive information on your phones. In addition to passwords, some
people store their Social Security numbers on their phones, says Krehel. Revealing too
much personal information can also put users at risk. For instance, programming the
word home into a phone can have negative consequences if a purse is lost with house
keys inside, he says. Thieves can use that information and enter a home easily.

Remove data remotely

Consider using technology that allows you to wipe out your phones data remotely.
Account holders will need to check with their carriers for options applicable to their
phones. Two options include MobileMe, which is a service for the iPhone, and Motorblur,
a service for Motorola phones. These programs can also help locate a missing phone.
Vet the service provider
Make sure you can trust your mobile payment provider, says Lillie Coney, the associate
director of the Electronic Privacy Information Center, a research center in Washington,
D.C. When it comes to sharing bank account or credit-card information, find out if the
company providing that app is a known entity, she says. If youre dealing with another
entity, will you be able to go back to them if there is a problem? Users should find out
who to contact if security vulnerabilities or other issues arise, says Coney.
Know the protocol for fraud
Find out if youll be on the hook for fraudulent purchases, says Coney. Right now creditcard holders are legally obligated to pay up to $50 of fraudulent purchases. However,
since these programs are so new, the law may not protect mobile payment transactions.
Laws are written out to cover current credit-card transactions, she says, adding: This
is a new one; until these issues are addressed through state law or federal legislation,
consumers are exposed. To find out how fraudulent charges will be treated, consumers
should call the app provider and their credit- card issuer, Coney says. They could also
look to the terms and conditions for the application. See what it says about obligations
and anything they say about disputes on financial transactions, she says. See what they
put in there to protect the consumer,
Any time you log into SMCU Mobile Banking, be sure to be aware of the people
around you. Dont disclose personal information, including account numbers or
social security numbers, if someone else can read your screen or hear your voice.

 Always secure your phone with a password to prevent unauthorized access. It may
be a bit of a hassle, but if your phone is ever lost or stolen, youll be glad you took
this extra precaution.
Be sure to log out completely every time you finish a Mobile Web Banking
session. This will prevent someone from having easy access to your information if
they get hold of your phone. Also, dont save any financial or personal information
on your phone, including Pins and Online Banking login information. If you lose
your phone, not only have you lost that information, but it could fall into the hands
of someone with bad intentions.
Some web browsers have an auto-fill function that remember your username
and password, and pre-fill these fields for you the next time you log in. If you are
prompted, tell your phone NOT to remember or auto-fill this information.
Beware of third-party applications (apps) for your phone. There are some
programs that you can download that claim to organize your various online
banking accounts or other passwords. Many of these are basically phishing scams
designed to steal your information and send it to fraudsters. Only access your
accounts through our official website www.smcu.com or the mobile site
m.smcu.com. Seattle Metropolitan Credit Union does not currently have or
endorse any downloadable application.
If you do lose your phone and you are worried about your Online Banking
information being compromised, log into your account from another computer and
reset your password right away. If you cant get to a computer, call our Contact
Center at 206-3 98- 5500 or 800-334-2489.
If you use SMCU Mobile Text Banking, know that we will never send you an
unsolicited message or ask you for a password or personal information via text. If
you get a message requesting such information, do not respond.
While SMCU will never send personal or account identifying information via text, being
in the habit of periodically deleting your archived texts will help ensure there is never
information on your phone that might jeopardize your accounts security.

Top 10 telecom service providers

1. Bharti Airtel
Bharti Airtel retained its leading position among telecom service providers and posted a
growth of five per cent to end 2009-10 fiscal with revenues of Rs 38,800 crore (Rs 388
billion).
2. BSNL
Bharat Sanchar Nigam Limited saw a drop in its revenue for the second consecutive year
to post Rs 30,240 crore (Rs 302.4 billion), a drop of 14 per cent, even though it retained
the number two position among telecom players.
3. Vodafone Essar
The Indian subsidiary of Vodafone Group, Vodafone Essar recorded 13.7 per cent growth
to emerge as the third largest player with revenue of Rs 23,200 crore (Rs 232 billion).
4. Reliance Communications
Reliance ADA Groups flagship company, Reliance Communications reported a negative
growth of 3.5 per cent with revenue of Rs 22,130 crore (Rs 221.3 billion).
5. Idea Cellular
Idea Cellular is part of the Aditya Birla Group and has bagged fifth position with a
revenue of Rs 11,390 crore (Rs 113.9 billion).
6. Tata Communications
Tata Communications reported revenue of Rs 11,000 crore (Rs 110 billion).The Tata
Global Network includes one of the most advanced and largest submarine cable
networks, a Tier-i IP network, with connectivity to more than 200 countries across 400
PoPs, and nearly I million square feet of data center and collocation space worldwide.

7. Tata Teleservices
Tata Teleservices spearheads the Tata Groups presence in the telecom sector. It has
posted revenue of Rs 6,900 crore (Rs 69 billion). Established in 1996, Tata Teleservices,
one of the 96 companies of Tata Group, has its network in 20 circles. It is the first
company to launch CDMA mobile services in India.
8. Aircel
Aircel recorded the highest growth of 37.2 per cent among operators in 2009-10. The
company posted revenue of Rs 4,700 crore (Rs47 billion) to move to the number eight
slot.
9. MTNL
Mahanagar Telephone Nigam Limited (MTNL)s revenue dropped nearly by a fifth
highest among the top 10 players -- to Rs 3,650 crore (Rs 36.5 billion). The company has
achieved a customer base of 8.06 million in the two metro cities of Delhi and Mumbai.
The government currently holds 56.25 per cent stake in the company.
10. TTML
The third Tata group company this arena, Tata Teleservices Maharashtra Limited (TTML)
is ranked number 10, among the top ten telecom players in India, with revenues of Rs
2,300 crore (23 billion. This helped the groups earning go past the Rs 20,000 crore (Rs
200 billion) mark.

I think the heartening factor here is that there is over 30% rise in users who log on to
internet to view multimedia content (From 32% in 2008 to 45% in 2009), which
indirectly also means that Internet speeds are getting better in India:)
MOBILE PENETRATION
India adds 19.90 million mobile users
Total Telephone subscriber base reaches 581.81 Million
Wireless subscription reaches 545.05 Million
Wire line subscription declines to 36.76
Wire line subscription declines by 0.31 Million
Overall Tele-density reaches 49.50
Broadband subscription is 8.03 million
The number of telephone subscribers in India increased to 581.81 Million at the end of
January- 2010 from 562.21 Million in December-09, thereby registering a growth rate of
3.49%. With this, the overall Tele-density in India reaches 49.50.
Wireless Segment (GSM, CDMA & FWP)
Wireless subscriber base increased from 525.15 Million in December-09 to 545.05
Million at the end of January-2010 at a monthly growth rate of 3.79%. Wireless Teledensity stands at 46.31.
Wireless Service: Service Provider wise net additions during the month

BSNL; 11% Stel; 2%

Uninor; 7%
MTNL; 0%
Vodafone; 14%
Aircel; 10%
Loop; 0%
Idea;
11%
Tata; 15%
Sistema; 1%
Reliance; 14%

Bharti; 14%

CHAPTER-2
OBJECTIVE OF THE STUDY
To understand the concept of mobile banking
To know the various trends in mobile banking in India
To know the customer satisfaction level from Mobile Banking Services.

CHAPTER-3
RESEARCH METHODOLOGY
Research methodology is the way to systematically solve the research problem. When we
talk about research methodology we not only talk about research methods but also talk
about the logic behind the method we use in the context of our research that why our
research results are capable of being evaluated either by the researcher himself or by
others.
The purpose of this section is to describe the methodology carried out complete the work.
The methodology plays a dominant role in any research work. The effectiveness of any
research work depends upon the correctness and effectiveness of the research
methodology.
Research Design:
A research design is an arrangement of conditions for collections and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in
procedure, it constitutes the blueprint for collection, measurement and analysis of data.
The research design for the research is exploratory and descriptive.
Data collection:
For our research study the data has been collected by both the primary and secondary
means.
(a)

Primary data I have adopted the structured questionnaires, which were filled
by the 100 respondents.

(b)

Secondary data the data has been collected through various magazines,
journals and websites.

Sampling Design:
A sample design is a definite plan for obtaining a sample from a given population. It
refers to the technique or procedure the researcher would adopt in selecting items for the
sample. The sample design used in this project is:
(a) Non-Probability sampling
Convenient sampling
Judgmental sampling
Sampling Size:
Sample size for the research report is 100 respondents of Ludhiana city.

Obtaining information regarding the company

Sampling design
Preparation of schedule
Field work (survey)
Editing and analysis
Preparation of report

CHAPTER-4
DATA ANALYSIS AND INTERPRETATION
Q.1

In which bank do you have your account?

Particulars
Axis Bank
ICICI Bank
HSBC Bank
HDFC Bank
State Bank of India
Any other bank

No. of Respondents
10
32
5
16
37
0

%age
10%
32%
5%
16%
37%
0%

Account in Respective Bank

Axis Bank

10%

ICICI Bank
HSBC Bank

37%

HDFC Bank
32%

State Bank of India

Any other bank

16%

5%

INTERPRETATION:
It was witness that today public sector bank state bank in India ha largest customer base but the
private bank are also catching up and after state bank in India, ICICI has highest customer base.
And on the other side multinational banks are also making their presence noticeable in the Indian
scenario.
Q.2

How frequently you visits your bank branch monthly?

Particulars

No. of Respondents

%age

Never
1 to 4 times
5 to 8 times
9 to 12 times
Over 12 times

9
45
16
20
10

9%
45%
16%
20%
10%

No. of Times

10%

9%

Never
1 to 4 times

20%

5 to 8 times
45%

16%

9 to 12 times
Over 12 times

Interpretation:
As per survey most of the customer that is 45 customers visits their branch 1-4 times in a month
and we can see there is a segment of customers that is 9 customers who are busy enough that
they do not get time to visit their bank even once in a month.

Q.3

How frequently do you avail the services of mobile banking?

Particulars

Daily
Weekly
Monthly

No. of Respondents
10
10
20

%age
10%
10%
20%

Depends

60

60%

Frequency of Availing Mobile Banking Services

10%
10%

Daily
Weekly

60%

20%

Monthly
Depends

Interpretation:
Maximum people that 60% people use the services depends on the factors and there are 10% of
the people who use mobile banking on daily and more of the category consists of businessman
who use mobile banking for their daily business transaction.

Q.4

Are you satisfied with your banking mobile banking services?

Particulars

Yes
No

No. of Respondents
80
20

%age
80%
20%

Satisfaction with banking services

17%
Yes
No

83%

Interpretation:
It is very interesting to see that most of the respondents are happy with the services their
respective bank is providing, the rest of the respondents felt there is scope of improvement.

Q.5

Rank the following advantages of mobile banking according to your choice?

Particulars

Ranking

No. of Respondents

%age

Convenience

40

40%

Safety

10

10%

Transparency

35

35%

Quick transaction

15

15%

Ranking

20%

Convenience
40%

Safety
Transparency
Quick transaction

30%
10%

Interpretation:
Most of the people prefer mobile banking because of convenience 2 nd preference is given to
transparency provided by mobile banking 3rd preference to time saving and safety was given least
preference because anywhere still customer feels that mobile banking is unsafe as compare to
traditional banking.

Q.6

Do you feel safe in disclosing your credit card and purchase information over
the mobile when this information is encrypted?
No. of Respondents
35
15
15
25
10

Strongly agree
Agree
Neutral
Disagree
Strongly disagree

%age
35%
15%
15%
25%
10%

Safety in Using Mobile Banking Services

10%
35%
25%

Strongly agree
Agree
Neutral
Disagree

15%

15%

Strongly disagree

Interpretation:
Out of the respondents who were using mobile banking services 35% of the respondents were
strongly agreed that they feel safe in disclosing their credit card and purchase information over
the mobile when this information is encrypted where as 15% respondents were neutral and 10%
strongly disagree on it.

Q.7

What are the main transactions you would prefer to do through mobile
banking?

No. of Respondents
15
25
15
25
20

Money transfer
Checking your current balance
Mobile Cheque
Pay bill
Stop payment

%age
15%
25%
15%
25%
20%

Preferences of transactions

Money transfer
20%

15%

Checking your current

balance
25%

25%

Mobile Cheque
Pay bill

15%

Stop payment

Interpretation:
It is interesting to see that a respondent would like to do all the transaction which one does on
personal visit to a bank. Thus, mobile banking has promising future ahead.
Q.8 Are you aware about possibility of fraud?
Particulars
Yes
No

No. of Respondents
30
70

%age
30%
70%

Awareness About Fraud

30%

Yes
70%

No

Interpretation:
Its party tragic but most of the respondents are unaware of the techniques which can be taken up
for any type of fraud and they are not aware of the measures that can be taken to avoid those
frauds.

Q.9

Does Bank educates you about the measure which you can take to secure your
mobile banking transaction?
Particulars

No. of Respondents
45
55

Yes
No

%age
45%
55%

Awareness about security measures

45%
55%

Yes
No

Interpretation:
Some of the respondents that are 45 respondents were not given any sort of education regarding
what are the various measures available to secure their mobile banking transaction but 55 of the
respondent were taught about measures by their respective banks.

Q 10 With Which factor you are uncomfortable with the mobile banking transaction you
do?
Particulars

No. of Respondents

% age

Security issue

42

42%

Availability

19

19%

About the ability bank to maintain confidentiality

11

11%

Its techniques

28

28%

Uncomfortable with the

mobile banking

28%
42%
11%
19%

Security issue
Availability
About the ability bank to
maintain confidentiality
Its techniques

Interpretation:
Above table revealed the fact that 42 % of the respondents are uncomfortable with the mobile
banking services because of Security issues after which they are uncomfortable with its
techniques used for it besides some other factor also with which respondent are unhappy.
Q.11

Why do you use mobile banking services?

Particulars
Time-saving
Confidentiality
Clarity of transaction

No. of Respondents
20
25
55

%age
20%
25%
55%

Reasons for Using Mobile Banking

20%
Time-saving
Confidentiality

55%
25%

Interpretation:

Clarity of transaction

As 55% of the respondents are in favor of Clarity of transaction it can be concluded Clarity of
transaction is very important aspect of mobile banking besides this confidentiality is also the
reason why respondent want to use mobile banking.

CHAPTER-5
FINDINGS
AN old Chinese saying goes: If you dont know where you are going - you will never get
there.
Public sector bank state bank of India has the largest customer base but the private
banks are also catching up and after state bank of India ICICI bank has highest
customer base.
Most of the customers visits their banks 1-4 times in a month.
ATM transaction costs at 45 paise, mobile banking at 35 paise, debit card at 20
paise and internet banking at paise per transaction so in this internet banking has
edge over mobile banking
Banks are very much working on to remove the hacking problems and other flaws
in the way of mobile banking
Compared to foreign countries Indian banks offering mobile banking services still
have long way to go of customer who dont prefer mobile but prefer traditional
banking only.
10% customer use mobile banking services weekly, 20% uses it monthly and there
is a segment of 10% people who uses mobile banking services daily basis and this
segment consists of more of businessmen who uses it for their business transaction
80% of the customers are satisfied with the mobile banking services but 20% still
think that there is a scope for improvement.
Most of the people prefer mobile banking because of clarity of transaction 2nd
preference given to confidentiality provided by banks in mobile banking and
3rd preference to time saving.

35% respondent were strongly agreed that they feel safe in disclosing their credit
card and purchase information over the mobile when this information is encrypted
whereas 15% respondent were neutrals and 25% disagree on it.
Respondent would like to do all the transaction which one does personally on a
visit to the banks but most of the people use it to enquiry there balance in their
account.

 70% of the respondents are unaware of the techniques which can be taken up for
any type of fraud and they are not aware of the measures that can be taken to avoid
those frauds whereas 30% respondents were aware.
55% respondents were not given any sort of education regarding what are the
various measures available to secure their banking transactions but 45% of the
respondents were taught about these measures by their respective banks.

SUGGESTIONS
The banks should take up the responsibility of educating the customers and all the
benefits of mobile banking.
There is need felt for the banks to promote mobile banking services and proper
promotional activities are not taking place.
Banks need to appeal the customers who may not be technologically sophisticated,
and should not require an engineering degree to get started or use this service.
Banks need do tie ups with mobile service provider do to make this service more
popular.
Banks should try put their security standard up to mark so that they cannot be
easily hacked.
Mobile service provider companies also should take mobile banking as more
serious aspect than now in future.

CHAPTER-7
LIMITATINS OF THE STUDY
Sincere efforts have been made to collect authentic and reliable information from
respondents however the report is subject to following limitations:
1.

The study was limited to Ludhiana city only. Wider coverage has made the study
more reliable and representative.

2.

Sample was drawn by convenience sampling, so possibility of sampling error

cannot be ruled out.

3.

Response of respondents was biased based on their personal preferences.

4.

Due to time and costs constraints, study could not be carried out on large scale.

CHAPTER-8
CONCLUSION
The cutthroat competition and the fear of losing customer are compelling the banks to
formulate mobile banking strategies. Expansion of the market is the need of the hour. To
expand market awareness has to be created amongst the user that mobile banking is safe
and secure to use. The scope is large first today more than 200 million Indians use
mobile phones as compared to 20 millions who have access to computer and the
population of mobile phone user is expected to grow at 25-30 percent. Second, Indian
demographic profile-mare than half the population is under 35 years old which are more
receptive to new age technologies and application. Mobile banking also helps banks
reach out to unbanked areas. It is fairly certain that given the market and potential mobile
banking will go a long way in the Indian banking sector.
Increasing satisfaction with, and usage of, mobile banking presents both an opportunity
and a challenge for banks. The opportunity lies in driving more customers to the mobile
banking channel to take advantage of the convenience and efficiency of the mobile
channel while continuing to meet their need and exceed their expectation. If banks
continue to satisfy customer with the mobile banking while increasing usage, the end
result should be larger number of satisfied and loyal customers. This will help banks
attract a higher share of wallet from existing customers and increase penetration thanks to
stronger recommendation from existing mobile banking customers to prospects.
In addition, increasing adoption of the mobile banking channel will reduce the cost
required to service customers. Banks will be able to provide a more satisfying experience
by delivering services through a lower cost channel. This improves operational efficiency
and reduces costs to banks. The challenge lies in changing customer behavior to embrace
the mobile channel. There will always be holdouts for whom mobile banking is not viable
channel due to perceived security risks, lack of comfort with latest technology and a host

of other reason. Once prospective mobile banking customers try mobile banking, they
may experience a lessening of security concerns and increase satisfaction resulting from
convenience and accessibility of banking services. Banks that figure out how to
maximize the mobile channel will be rewarded with greater loyalty and financial success.

BIBLIOGRHAPHY
BOOKS
R.K. Uppal (2009), future scenario of Indian Banking, MAHA MAYA
Publication, pp.1-11.
R.K. Uppal & Rimpi Jatana( 2007) E-banking in India - Challenges and
Opportunities
Jayshree Bose (Author)
E- Banking in India: The Paradigm Shift
JOURNALS/MAGAZINES/NEWSPAPER
HINDUSTAN TIMES
THE TIMES OF INDIA
WEBSITES

WWW.GOOGLE.COM
WWW.WEKIPEDIA.COM
WWW.INFOGILE.COM
WWW.MMAGLOBAL.COM

QUESTIONNAIRE
Name

:______________________________

Age

:______________________________

Occupation :______________________________
Income

Q.1

Q.2

Q.3

:______________________________

Which bank do you have your account?

(a)

Axis Bank

(b)

ICICI Bank

(c)

HSBC Bank

(d)

HDFC Bank

(e)

State Bank of India

(f)

Any other Bank

How frequently you visit your bank branch monthly?

(a)

Never

(b)

1 to 4 times

(c)

5 to 8 times

(d)

9 to 12 times

(e)

Over 12 times

How frequently do you avail the services of mobile banking?

(a)

Daily

(b)

Weekly

(c)

Monthly

(d)

Depends

Q.4

Q.5

Q.6

Are you satisfied with your banking mobile banking services?

(a)

Yes

(b)

No

Rank the following advantages of mobile banking according to your choice?

(a)

Convenience

(b)

Safety

(c)

Transparency

(d)

Quick transaction

Do you feel safe in disclosing your credit card and purchase information over the
mobile when this information is encrypted?

Q.7

Q.8

(a)

Strongly agree

(b)

Agree

(c)

Neutral

(d)

Disagree

(e)

Strongly disagree

What are the main transactions you would prefer to do through mobile banking?
(a)

Money transfer

(b)

Checking your current balance

(c)

Mobile Cheque

(d)

Pay Bill

(e)

Stop payment

Are you aware of method which can be undertaken to make any kind of fraud?
(a)

Yes

(b)

No

Q.9

Does your bank educate you about the measure which you can take to secure your
mobile banking transaction?
(a)

Yes

(b)

No

Q.10 With which factor you are uncomfortable with the mobile banking transaction you
do?
(a)

Security issue

(b)

Availability

(c)

About the ability bank to maintain confidentiality

(d)

Its techniques

Q.11 Why do you use mobile banking services?

(a)

Time-saving

(b)

Confidentiality

(c)

Clarity of transaction