Introduction – Trends in Banking and technological advances
Rapid growth has increased job opportunities across the globe for the new generation and the profile for the working has changed considerably. The youth have the money to spend and they have become an economic force worth reckoning.
The young and affluent customer:
Ø Is more knowledgeable, tech savvy, demanding
Ø Would like to have a wider range of financial services and sophisticated products
Ø Look for convenience of anytime anywhere banking
Ø Demands a bouquet of financial services from banks and also,
Ø Demands financial advisory services to help choose from the large choice of product offerings by various service providers
Businesses can no longer ignore the younger generation and have to offer products and services that address the needs of the young
Technological advances – Multiple channels like phone banking, mobile banking, ATMs and internet banking have eroded the uniqueness and limitations of branches
Customers using these channels are now able to transact business anytime, anywhere. They have access to not only account information but also on investment opportunities at their convenience.
Mobile Banking
What is mobile banking – A system where customer can send the request for a standard product of the bank in the form of a standard SMS. This is referred to as Pull request where customer demands a service / product from the bank by sending SMS. The cost of sending the SMS is normally borne by the customer who is sending it. Another form of mobile banking is the Push SMS request sent proactively by the bank which informs the customer of the fulfillment of request and mentions the dispatch details of the physical product (if any). Apart from that, all sales and marketing request are covered under it.
How the SMS is sent by the customer – In case customer wants to send a mobile banking request for a deliverable (either in physical or softcopy form), then he / she can send it as follows:
ISOA LBMUM00000123456 ssc_1982@yahoo.co.in
Meaning of the above text – Customer is demanding a statement of account of a retail home loan (which contains details of bounces, paid EMIs) for his / her loan account number - LBMUM00000123456 (LB is a Home loan, MUM indicates loan has been disbursed from Mumbai) in soft copy at his / her email id which is ssc_1982@yahoo.co.in.
On receipt of the SMS, the bank’s system either sends back a delivery confirmation with a promise to deliver the required in next few days or a message stating that the code of request (which is ISOA here) is wrongly sent and does not exist in bank’s database.
Purpose of mobile banking –It aims to migrate customers to alternative banking channels (like internet banking) in order to reduce the branch walk-ins of the customer or their calls at the call-center. Other channels include Internet banking, Branch-free banking, use of i-mobile etc.
Whether mobile should be registered or not – Mobile banking services can be offered into 2 broad categories based on whether online requests are being received from registered or non-registered mobile
For registered mobile numbers - Cases where customer sensitive information relevant to customer assets (like Deposits, Demat A/c details etc) is sent from the bank, the norm is only to send it to the registered user of the facility, who have opted for mobile banking. For example – In case a customer types - IBAL 032301300551 and send it to the mobile banking number of the bank, the balance of the savings / current account will only be sent in case the request
Ø Is correct (correct code, proper bank account number)
Ø Is coming from the registered mobile number, which is registered for the same account
If above conditions are fulfilled, SMS will be sent to the registered mobile
In case, the user wants to change his / her mobile number, it takes atleast 3 working days to get the number reflective in mobile banking software due to security issues to avoid any fraudulent transaction. After 3 days, customer can then place request from the new mobile number.
For non-registered mobile numbers – Many retail loan products like Repayment schedule, statement of account, Income tax return form – Provisional and Final (Form 60/61) only contain information relating to loan repayment and is not prone to any fraudulent activity related to customer or bank. Hence, many banks accept requests from non-registered mobiles mainly to reduce the number of walk-ins into retail branches. The final deliverable though is dispatched to the address updated in bank’s records.
Services currently offered in Mobile Banking - Many banks offer services under mobile banking which are as follows:
| Type of Product | Asset / Liability product of bank | Whether Push or Pull Alert | Feature |
| Balance in Savings / Current / Demat / Credit Card Account | Retail Assets and Liabilities | Pull | Code used - IBAL, IBALDM, IBALCC |
| Account Credit / Debit / Salary credit / Bounce details / Debit card purchases | Push | As set by customer via internet banking or via placing request in retail branch | |
| Online Bill payment / status enquiry | Retail Liabilities | Pull | Code used - IVIEW |
| Cheque book request for Demat / Savings / Overdraft | Retail Assets and Liabilities | Pull | Code used – ICBR, ICOD |
| Marketing alerts | All products | Push | New product information |
| Payment Due date for loans / Credit Card / Overdraft | Retail Assets | Push | It is sent before 3 working days of payment due date |
| Transaction enquiry | All retail products | Pull | Gives details of last 3 transactions |
· All Push transactions are proactively pushed to customers, whereas all Pull requests are sent by customers for a service / product request
Advantages and disadvantages
Ø The advantage of mobile banking is the SMS, which is easily sent, immediately received & read and can be accessed even during a meeting without disturbing others.
Ø The length of SMS though poses a constraint (for old Nokia mobile models, it can be max 120 alphabets) which needs to be worked out by the bank (Else cost of 2 SMS needs to be paid instead of 1)
Challenges faced by banks
Ø The main drawback of this product is where customer mobile number is old, incorrectly updated or is not present in the bank’s record. Hence, the challenge for the bank is to make the customer update the contact details as and when it changes (good opportunity to execute the same when there is a branch walk-in)
Ø As on today, many customers have 2 mobile numbers instead of one and they want both of them to be updated with the bank under mobile banking (like in case of joint account holders). The challenge lies with the bank as to which number, SMS should be sent (they can give choice to customers when they visit the branch or when they call up the call-center)
Ø To what extent, banks can take up and pass on the cost of the SMS to the customers is a bigger challenge (in order to save on operating cost of the bank)
How to educate customers in mobile banking
Customer education is a must as customer tends to forget the code & prefers to walk-in into a branch for a standard request which can be fulfilled easily sitting at home.
Whenever a customer walks-in with a standard request, customer service officer should understand the purpose of visit. In case, it is a simple request for a standard deliverable (like cheque book), then customer service manager should check in the bank’s system whether customer is eligible for mobile banking (contact details are correctly updated). If not, activate the facility, capture customer’s latest mobile number (increasing contact-ability), place request for deliverable in the system for which customer has come and give a simple handout to make the customer familiar with the process of mobile banking.
New Services offered
Mobile shopping services, as offered by ICICI Bank, India is a unique way of making payments for the purchases from the mobile handset. The service though is only for registered mobile banking customers only.
Backend / Internal Process followed to cater to request received for account statement via mobile banking
Whenever a correct mobile banking request hits the banking database, the following steps are followed internally at the backend (most of them are done in excel, which can be automated)
Ø The processing team downloads the dump of requests from the server and sort it based on product line like savings account, home loan or a consumer loan product
Ø The downloaded requests are then checked in the system and all the repeat request which came in the last 7 days are removed (SMS is sent to all these customers stating that the request is duplicate and their original request is under process)
Ø For the rest of the requests, either physical copy (requested item like statements) is dispatched to the updated communication address in the bank’s system. In case, customer’s e-mail address is updated, only soft copy (mainly PDF) is sent. After sending, customer is informed via an SMS that the request has been fulfilled, giving the details of delivery
New Face of Mobile Banking (I-Mobile)
Main Theme – Doing a financial / non-financial transaction effortlessly with online security -anytime, anywhere - a feature similar to internet banking.
Services Offered currently in many Indian Private banks (ICICI, HDFC) are:
Ø Bank Account – Funds transfer, Bill payment, balance enquiry, cheque book request, last 3 transactions, stop cheque request, change primary account, cheque status enquiry
Ø Credit Card – Balance Details, Last payment details, Payment due date, Reward point status
Ø Loan – Final IT certificate, provisional IT certificate, ROI reset letter, Loan reschedulement letter, request for loan agreement copy, repayment schedule
Ø Demat – Holding enquiry, Transaction status, Bill inquiry, ISIN
Ø Other Services – Status of service request raised, prepaid mobile recharge, movie ticketing
Scope of the Project to be conducted for SBI
Ø To study the trends in mobile banking offerings in Singapore – The same can be achieved via
o Customer survey – Mostly Quantitative in nature (minimum 30 sample size). 4-5 in-depth interview can also enhance the project impact by gauging the expectations of the customer
o Studying the websites of banks in Singapore (Foreign and domestic)
o Studying the banks in India (Private banks like ICICI and HDFC, who have successfully implemented these ideas)
Ø To study the service offerings of SBI in Singapore – For the same, the team needs to understand
o For what all products, SBI Singapore currently offers mobile banking service
o Whether any new projects for the same is in pipeline for SBI
o What other products and services SBI offers in India or other foreign countries
Ø To recommend a detailed strategy to SBI for launching Mobile banking service offerings in Singapore
o Need to decide who all service providers can provide the best service at the cheapest price
o What are the regulatory limitations of implementing such a project
o Final decision on feasibility of the project to be taken by the mentor. The team will though give all the observations encountered during the course of the project
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