Mobile banking Trends in India and implementation strategies : Mobile banking Trends in India and implementation strategies Agenda: Agenda Channel conversion
Importance of mobile channel for banks
Mobile banking in the past and today
Customer needs and experience
Security concerns and measures
Mobile banking applications and implementation
Mobile channel integration: approaches
Partnership strategy ( Main Players/Stakeholders/ Partners )
Trends and Statistics
Scenario in India
M-Cheque Why Channel Conversion ?: Why Channel Conversion ? Control costs, removal of cost duplication
Cater to increasing online channel customers
Personalize customer interactions
Unparalleled convenience and proactive customer service
Cross selling Importance of mobile channel for banks: Importance of mobile channel for banks Proactive and simple alerting services reduces branch/ call center costs
M-Commerce is expected to account for an increasingly high proportion of transactions.
Mobile device can be an ideal POS device allowing transactions to be authorized in many more places than ever before
Mobile services are expected to generate access to new business opportunities & new alliances across business sectors
High market penetration (up to 80% in some countries) and still growing
Mobile Banking in the past: Mobile Banking in the past Mobile banking solutions were mainly reproduction of already existing web-based applications with less stress on its mobile aspects
Low bandwidth & latency issues
High communication costs
Low functionality and fewer capabilities in the mobile devices
Security concerns Mobile Banking Today: Fast data services (GPRS)
Low data transfer costs (e.g. flat rates)
More functionality possible (new devices with better displays and browser functionality)
Higher Security mechanisms
Applications capitalize on the mobile aspects and diversify from existing web-based solutions Mobile Banking Today Security Concerns: Security Concerns
Devices are easy to lose/ steal and get misused
Mobile communication being sent as clear text can be read or interrupted
Location-aware applications are considered to be invasion of privacy
Lack of standardizations in payment solutions
Security measures: Security measures SMS channels can be used with encryption by mobile payment applications to protect data integrity and security.
Use of crypto-Java SIM cards & PKI (Public Key Infrastructure) for establishing hierarchy of trust; non-repudiation.
Debit/Credit cards linked to a specific phone number of consumer for added transaction security
Implementation of secure PIN for transactions
For a financial application, gateways should reside behind your firewall instead of the carrier premises.
Mobile Banking Applications: M-payments (B2C) & Inter-personal (P2P) payments
Card based payments (Mobile debit/credit/pre-paid card)
Cash payments (Electronic purses/wallets)
Utility bill payments, Credit Card Payment, Mobile Top up
Alerting Services (Transaction alerts, reminders, Stock alerts, Offers & marketing promotions)
Mobile solutions for personnel servicing business customers e.g. mobile credit approval, mobile insurance assessment, mobile collections etc. Mobile Banking Applications Implementation strategy: Implementation strategy Corporate strategy should drive the use of mobile technology.
Determine which business processes or workflows would benefit most from being mobile-enabled Eg. Sales and field force automation
Mobile enable first, those processes that guarantee the best return on investment
Approach: Approach Identify the right processes
Define measurable outcomes
Implement integrated platforms
Mobile channel integration: 2 approaches: Mobile channel integration: 2 approaches Middleware - Separate channel-by-channel or application-by application integration
Enterprise - An Integrated middleware layer capable of connecting all delivery channels with all back end systems Main Players/Stakeholders/ Partners: Telco's
Financial services/ Card companies ( VISA, MasterCard …)
Payment service providers
Suppliers/ Solution providers
Customers/ users Main Players/Stakeholders/ Partners Marketing: Marketing Build up a database with high-quality and detailed information about customers in their target group.
Gaining an in-depth understanding about customers desires & building a means to address customers on a very personal medium such as a cellular phone
Launching marketing campaigns which are non-invasive and privacy-preserving
Position the products with a strong personal bond
Banking Focus: Banking Focus SMS alerts can disburden more expensive channels (e.g. contact centres).
Useful information can be transmitted to the client, and increase customer loyalty at low cost.
Research shows that the more services the customer uses, the higher the switching costs would be. Also, the more services the customer uses, the greater are the bank’s expected profits.
Mobile offers - e.g Apply for a Personal Loan today "&" get a chance to win a free dream holiday to Singapore. Just reply "Loan" Conditions apply
Broadcast to increase the usage of Credit card or debit card - e.g 10 days left for 5%Cash Back "&“ Bonus Reward Point! Use IDBI Bank Debit Card Now! *Conditions Apply
Trends: Trends Mobile devices are proving to be the most compact technological aid of the future, set to overtake PCs and laptops.
Use of mobile handsets as a payment device is already well established in Europe and the leading Asia-Pacific markets.
eg. Almost a million Koreans now do their banking via 3G cell phones (CNN report)
Services which link credit/debit cards with mobile hand held devices have started to pick up and are expected to play a major role.
Slide18: Mobile trends indicate the potential of m-Banking Statistics: Statistics
Cell phone teledensity is still very low in India at around 6%, In comparison, China’s cell phone density is at around 35%, while some of the European and Asia-Pacific countries have 100% teledensity or more in mobile telephony.
In the past two years, the number of people using mobiles has increased three times
Indian cellular services market is projected to reach $24 billion by the end of 2009, a CAGR of 35.6%, Gartner said. Indian cellular services market had recorded the highest growth in Asia Pacific and Japan region in 2004 with a CAGR of 67%.
India is all set to be among the top four countries in mobile phone subscriber numbers by the end of year 2005, from its current 8th position, according to industry analysts
As on August 31, 2005, There were 62.57 million mobile subscribers in India, according to data provided by the TRAI. Fixed Phone users already lag behind by 47.44 million
Communications Minister Mr.Dayanidhi Maran recently announced the objective of India reaching the top of the heap with 250 million phones by December, 2007 Indian Scenario: Indian Scenario Increasingly faster transmission via GPRS
3G technology to be launched soon in India, is expected to bring in a mobile revolution. Broad band Internet in India is expected to ride on a 3G backbone
Users are slowly getting used to the concept of a mobile hand held device as digital cash or wallet to carry out purchases
Presently in India low-value m-commerce transactions are happening.
High value mobile transactions would pick up once the concerns of mobile secure transactions are being addressed. mCheque: mCheque mCheque is a secure debit/credit card payment system using mobile phone SIM with security based on EMV 2000 specifications. CUSTOMER BANK MERCHANTS/SERVICES mCheque - Overview: mCheque - Overview mCheque is a secure card-present transaction system.
Acceptance of VISA/Visa Electron in mChq mode does not require a PoS terminal. Any GSM mobile phone (with an enhanced mCheque SIM) can be used to accept a VISA/Visa Electron payment in mChq mode.
Upto 16 different VISA or VISA Electron cards from different Banks can be securely personalized Over-the-Air (OTA) on mobile SIMs.
mCheque is inter-operable across multiple operators and banks.
Key management process is regulated by IDRBT-Hyderabad (subsidiary of Reserve Bank of India) in agreement with the participating Bank.
Product Benefits: Customer Benefits
Secure, Convenient and easy method of payment
Anywhere anytime payment
Additional payment method for customers
Small payment amounts can be accepted
Portable payment options for merchants on move (Taxis, Couriers, Doctors etc)
Additional channel for customer payments
Use of existing Infrastructure
Value added service to customers Product Benefits Slide24: Mobile devices will also be used to handle short distance payments and transactions enabled by the Blue tooth technology, for example Point of sale machines and parking meters
VPN – secured corporate network payments
m-Commerce – fully loaded including share trading (m-Trading)
India’s mobile market has grown to over 50 million subscribers and this number is constantly on the upswing. India is one of the world’s largest markets for mobile phones. – A fact acknowledged by Nokia, Motorola and LG among others. Future … Slide25: THANK YOU