Mobile banking is now being identified as the new frontier in banking technology, thanks to the ubiquitous use of mobile telephones in urban and rural areas.

What makes mobile banking an attractive proposition for all stakeholders is the fast-paced technology convergence which is currently underway. Mobile-banking traction should be seen in two ways — there could be just a facility to receive SMS alerts on transactions (debits and credits) and — high technology-driven transactions such as payments and transfers.

After making a beginning in the former, now mobile banking allows financial transactions like bill payment and fund transfers.

In the last one year, some leading mobile telephone service providers have entered into partnerships with banks to offer transaction-based services, not just SMS-based updates.

According to the latest data available with Reserve Bank of India, in the first five months of 2012, there was a significant increase in the value of mobile banking transactions at Rs 1,140 crore, against Rs 209 crore in the same period the previous year.

In terms of transactions too, there was an increase to 1.5 crore from 0.5 crore. The growth in transactions has been driven by major banks in the public and private sector, especially State Bank of India, ICICI Bank and HDFC Bank.

State Bank of India, for instance, reported that the registered mobile-user base went up to 48 lakh in September 2012 from 36 lakh in March 2012.

Huge potential

Though the growth figures cited above look attractive, they also show that there is immense potential for expansion of mobile banking, both in terms of transactions and value. While the situation in urban areas is far better, bankers feel that in rural areas, customers are not forthcoming to register their mobile numbers with the bank as a first step in mobile banking. But, this is bound to improve in days to come, they hope.

The renewed focus of the Government and Reserve Bank of India on financial inclusion through Business Correspondent model would mean a fillip to mobile banking as well.

Further, there have been some new initiatives in bringing mobile banking along with mobile-book-keeping to the poor women members of Self-Help Groups.

In Andhra Pradesh, due to a recent initiative, poor women are able to access their financial transactions on mobile phones.

About 90 lakh women members of Self-Help Groups (SHGs) in Andhra Pradesh can look forward to this facility, thanks to a mobile book-keeping project being launched by the State Government.

As centre meetings are the cornerstones of SHG activity, data on repayments made and loans disbursed will be uploaded to mobile phones by the record keepers in about 15 minutes.

The records capture all the existing loans of individual members, insurance details, old loans, details of assets and repayment dates in Telugu.

Under the project, village organisations are being provided mobile handsets uploaded with the book-keeping software to begin with, which will be extended to others.

If this kind of fusion of mobile-banking and related services is done on a large-scale, it will be easier to fast-pace the service of mobile banking, not only to the rich in urban areas, but also to the poor in rural areas.

With the cost of mobile-handsets coming down, the access to handsets which are aptly enabled to take up banking transactions, is also increasing. This will also drive the growth in mobile banking.

Above all, it is the utilitarian value that brings people closer to mobile banking. In the days to come, there is no doubt that instead of leather wallets, most of us will have mobile wallets in our pockets!

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