 "The age of mobile banking")
Faced with increasing challenges such as RBI regulations, demanding customers and recession over the past few years, the banking industry has been under considerable pressure to improve customer experience and reduce operating cost. They have responded to the market challenge by moving to a client-centric model by introducing innovative technologies to cater to the customer ranging from ATMs, SMS Banking, USSD banking etc.
With more and more smartphones coming in the market and applications having gained widespread acceptance, banks have quickly jumped on to the bandwagon and launched their own mobile banking applications. Today, majority of banks (which include even rural and cooperative banks) are using mobile banking as a channel to carry out financial transactions such as fund transfer, balance inquiry, last few transactions and bill payment. By leveraging the power of mobile, they have succeeded in greatly enhancing user experience as well as reducing their operating costs.
From the customer’s perspective, mobile banking has offered them efficient use of time, real-time tracking and control, convenience and ease of use. According to Cisco’s global Customer Experience Research, majority of customers are now comfortable opening bank accounts (60%) and servicing loans (57%) online. Customers are also comfortable receiving financial recommendations and advice based on location data from their mobile phones (59%), and would be happy to be sent real-time notifications that assist with financial or purchase decisions (54%).
However, mobile banking as with any other technology has brought its own set of challenges to both banks and subscribers alike. With increasing security breaches, and information theft, banks have been mandated to use double authentication like one-time password (OTP) and encryption algorithms to ensure that fraud is kept to a minimum.
From the customers’ perspective too, it is doubly important that they are aware of the possibility of fraud and take adequate safeguards. Mobile banking is much more secure than internet banking due to reduced malware in mobile operating systems and lower risk of viruses. However, it is important for customers to know and safeguard the basics – not using public WiFi or non-secured connectivity, not opening phishing emails, being familiar with your own banks look and feel and of course ensuring that the phone is not stolen will ensure that there is minimal risk of fraud.
In the times to come, banks will move away from using mobile banking as a tool to cut operational costs but try and leverage the social element of the mobile phone. Besides the basic services that exist today, banks will look to provide customised user experiences, shopping and additional value-added services. Consumers will use social networking features to accessing information on new products and share their opinions on a real time basis using chat or video. Retail banks will no longer adopt a one-size-fits-all approach but offer personalised VAS services such as shopping, bill payments, discounts, etc. These VAS services would be personalised based on data obtained from the mobile like location, nature of device used and customers’ online behavior.
The mobile phone will be the primary touch point between the customer and financial institutions. By improving security and leveraging the consumer’s inherent trust in banks and other financial institutions, banks can now use the mobile to not just stay relevant to the customer but also forge a deeper and longer lasting relationship.
Nester Dias is co-founder, Mobileware Technologies, a leading mobile software company
