Introduction to Mobile Banking

Introduction

 

We all are heavily dependent on our mobile phones for virtually everything but who could have predicted even five years ago that we would be leveraging Information Technology to involve our mobiles in looking after our bank transactions. 

 

Basically, mobile banking comes into play when we make use of our mobile phone for a number of services related to our day to day banking needs. We can get unprecedented access to our bank accounts, investments, and support services just by a single tap on our devices. 

 

Not only these simple steps, you can also transfer money from the comfort of your home. Available anywhere and anytime, easy accessibility and hassle-free procedure form the most advantageous aspects of this service. 

 

Banks have been using both SMS, emails and apps in order to provide accurate information to their clients regarding their accounts. 

 

Thanks to mobile banking, you are also able to get timely alerts to clients in case of fraud or any account mishap. The incredible ease and comfort that these facilities provide us, really get us intrigued to find out about where all this started? Isn't it!

 

(Must Read: AI applications in financial services)

 

How has mobile banking evolved?

 

Mobile web didn't come into place until 1999, leaving only one viable option for mobile banking- SMS. 

 

• SMS banking in itself was led by European banks. 

• 2010 witnessed the rise of SMS banking and mobile web as the two most popular mobile banking facilities.

• As Android operating systems and iOS began to develop, apps soon arrived on the scene. This made the entire system a lot more quick, convenient and less time consuming.

• A customer can easily know well in advance about any forthcoming maintenance updates in banking systems like ATMs. 

 

A brief overview of mobile banking services 

 

1. Clients can effortlessly keep track of their account information 

 

A wide range of services that can be utilised by customers for their daily requirements include (but are not only limited to): 

 

• Checking account balances 

• E- statement of account 

• Account history and recent transactions 

• Loan and card statements 

• Equity financing or mutual funds 

• Term deposits 

• Handling of insurance policies 

 

2. Convenient transfers

 

Whether you are opting for a self-account transfer or running short of time on the last day of your bill payment, mobile banking proves to be quick and hassle-free for your last minute needs. 

 

3. Get a real-time view of your investments 

 

Mobile banking services enable you to manage your portfolios and term deposits without even a bit of stress. 

 

4. A variety of customer support services

 

Clients can keep a check on their loan or card approval status and even locate ATMs. 

 

Mobile banking services offer customers the ability to monitor all of their banking activities, just a single tap away. 

 

5. Clients are timely updated about new offers and policies 

 

Whether you are interested in news related to finance or wish to know about the latest offers a bank has got for you, mobile banking provides the key to staying at par with all the latest financial developments. 

 

After knowing about the multitude of advantages mobile banking has to offer, it is the right time to get a better understanding of some of the challenges or limitations involved in the quick and simple procedure of mobile banking.

 

(Suggested reading: Introduction to Investment Banking)

 

Limitations of mobile banking 

It is really not possible to enlist all the hurdles involved, but some of the most common ones which all of us frequently encounter and are thus worthy to be mentioned are :

 

1. Lack of accessibility 

 

As the entire mobile banking system is based on the type of device being used by the customer, these facilities are sometimes far away from the reach of some of the most needy customers.

 

2. Despite all the benefits, security concerns are hard to neglect 

 

As cybersecurity issues are on the rise, there has been an exponential rise in the number of customers who, despite acknowledging the wonders of mobile banking, still feel compelled to opt out of it. The bulk of banking frauds and hacking risks lay bare the complexities associated with mobile banking services. 

 

Sharing OTPs, passwords and other bits of sensitive information form the background to data breach and financial insecurity.  Further, losing your device can prove to be a nightmare as your sensitive information can be used by malicious hackers and scammers for malpractices.  

 

3. An array of downsides in the form of limited services and compatibility issues

 

Often, customers face delaying of mobile banking services in case of server breakdowns leading to extra consumption of time and efforts. 

 

Relevance of mobile banking in our everyday lives 

 

Mobile banking services are one step closer towards providing all our requirements at our doorstep. The ability to access banking services from anywhere and anytime around the world not only saves your time but also enables you to reduce the efforts you need to exhaust otherwise. 

 

Needless to say that mobile banking services are evolving in the backdrop of a win-win situation for everyone involved. Banks also benefit from providing the easily accessible banking facilities. They are able to reduce their operational costs but without compromising on their own efficiency and customer value.

 

Also, it is worth mentioning that when a customer tries to use an app for a service for managing their account or investment, this drives huge business growth. Small to medium-sized enterprises are able to save their time and resources by utilising fast payment services and managing funds.  This is indeed aimed by most of the Product Managers and the ability to account for larger transactional volumes serves this purpose.

 

According to recent statistics from the American Bankers Association (ABA), mobile banking was the most popular way people used for their day to day banking needs, surprisingly even well before the pandemic struck.  The most obvious reason behind this is that in today's fast-paced environment everyone wishes to conduct their important tasks without having to visit a physical location. 

 

(Recommended blog: Ethical Banking)

 

 

Ending note 

 

This blog ends here. While ending the blog, it can be successfully stated that mobile banking services have ample advantages to offer. 

 

The most crucial being that customers can think of utilizing the facilities provided by the bank without even visiting it physically. This comes as a boon for the customers who lack either the time or the enthusiasm to visit a bank personally. 

 

The most vital point that needs to be addressed amidst all the numerous advantages of mobile banking, remains the concern for financial security. Vulnerability to mobile banking frauds needs redressal at the earliest by all the stakeholders involved. 

 

Weighing all the risks and benefits can prove to be a significant way for making use of mobile banking services without having to compromise on security or any other concern.