Are we ready for m-banking?

I became the proud owner of the coveted iPhone and straightaway got down to business, enabling M-banking on my bank account. After installation I was mighty pleased at the prospect of being able to transact from the comfort of my home or office. The actual experience, however, was a different story altogether.  The extremely classy and stylized WP7 app doled out information on branch locations and foreign exchange rates with élan, but when it came to basic account balance information, it was back to the drab old browser screen.
I decided to check out the prowess of my M-banking by paying my electricity bill; it was the last day for payment. If I was dismayed by the overall “look and feel,” the functionality left me thoroughly disappointed.  Inadequate “help” options made navigation cumbersome and I never did manage to figure out the “Utility Bill Payee” names.
Attributing this to issues with the handset, I then switched to the tablet.  The complex security features made the use of the phone and the tablet mutually exclusive, i.e., the pass code did not work in parallel on the phone and tablet both. I fiddled around for an hour with no luck, when a power cut- a direct consequence of the unpaid electricity bill – added to my woes. It was at this point that I discovered the most useful iPhone feature – its flashlight! By the time I could focus on my unfinished business, the session had logged out. Re-login required a separate “SecureKey” card to generate a PIN for use with existing login credentials – with security interests in mind, no doubt. However, the idea of fishing for it in the dark was not very appealing.  I therefore channelized my energies into convincing the electrician to arrange for temporary power to see me through the night.
The evening’s events set me thinking about whether enough was being done to equip customers to optimally use this niche channel, which could empower branch-less banking. Undoubtedly, marketing is the key to popularizing M-banking but banks should not undermine the need for customer education. In the absence of end-user (customer) training, banks may end up addressing all queries, mobile banking or otherwise, in the branches, which defeats the whole purpose of M-banking.
A bank’s mobile banking application should mirror its net banking portal in terms of utility and ease of use. Step-by-step instructions, from the time of app download until the end of the desired transaction, can prove useful.
It’s time banks woke up to reality and addressed these vital issues hindering the optimal use of M-banking.

Diversified Channels in Rural Banking Worldwide

Contrary to popular belief, rural financial institutions worldwide are generally profit-making ventures, regardless of size or scale of operation.There are 4,500 cooperative banks in Europe with more than 60,000 branches with a strong rural presence. Raiffeisen Zentral Bank, Austria, is a pioneer in German rural banking with over 12 million clients. France’s Crédit Agricole, which merged with CréditLyonnais in 2003, is a global, full-service universal bank, with a stronghold in rural France.
The Norinchukin Bank in Japan, through a multi-level system of 16,000 outlets, regulates the banking functions of nearly 5,000 cooperative organizations. Agricultural Bank of China has nearly 25,000 branches across rural and urban areas.
Emerging markets like India and China hold huge potential for rural banking as a sizeable chunk of their population lives in rural areas. In India, SKS Microfinance has nearly 700 branches and has covered 1.6 million customers in 20,000 villages and slums since its launch in 1998. It sustains a monthly growth of 30 branches and 1,30,000 customers.
A three-way mantra for rural success goes somewhat like this:

  • Renewal of sustainable community-focused banking.

  • Expansion and enhancement of network value.

  • Evolution from basic banking to broader financial solutions.

Rural markets pose several challenges, including low consumer awareness of banking, and high cost of reach. Financial institutions need to veer away from branch banking in a rural set up and channelize investments towards developing alternative methods of banking.  New age channels can take banks to the doorstep of the rural customer, as the following examples show:

Mobile Banking:

Mobile telephony has penetrated the remotest corners of the world with banks and telecom companies experimenting with mobile banking models, especially in developing countries.  In Kenya, Vodafone has attracted 2.3 million customers to its M-Pesa service, which enables customers to transfer money via mobile phone and agent network.  In developing countries, in the absence of branch infrastructure in rural areas, high volumes of low-value transactions are facilitated through mobile banking and non-bank retail agents.
Low levels of income and literacy both, limit the rural users’ exposure to digital technology.  It is therefore important to simplify rural banking technology and make it user friendly.  Some desirable features are:

  • Use of voice biometrics for authorization.

  • No text input.

  • Output display in local language.

  • Low-cost basic mobile phone on which external applications cannot be installed.

  • Use of audio-based interface for instructions.

  • Use of Voice + Green Key + Red Key + Numeric Keypad as input.

  • Design for small screen sizes like 128 x 128, 128 x 160, 176 x 220.

Some other channels relevant to the rural scenario are:
Biometric Enabled Handheld Devices:
With this handheld device, agents can collect cash and process other transactions like loan disbursement. Even an uneducated customer can authenticate the transaction by swiping a finger on the device, to decrease the likelihood of fraud.
Voice-enabled and biometric, interactive ATMs can be customized to guide users with images rather than text, to deposit and withdraw low denomination currency.


Like most of my peers, I follow the “self-service way” to complete most routine transactions. Whether it’s a holiday or a night out at the movies, I do the booking online. No standing in line, no waiting. The same phenomenon is now taking over banking, with an increasing number of customers branching away from branches. While they would like face to face or assisted service to be at hand when needed, the option of self-service is one of their most important demands.
As per a recent survey, about 35% of customers of US banks don’t visit branches for their day-to-day needs. With banks investing in innovative technologies and channels like image-enabled ATMs and RDC on smartphones, branch transactions have declined at the rate of 4 to 5% over the last 3 years.
Another survey showed that 48% of customers preferred ATM banking to teller services, the reasons being 24*7 availability, speed, convenience, anonymity and security.
ATMs were introduced more than 40 years ago and since then, their features have been regularly enhanced. Today’s ATMs provide a wide range of banking services, yet customers want something more. Banks have responded by introducing self-service banking kiosks that give users greater choice, flexibility and convenience of transaction.
SBI was the first bank in India to open kiosk branches by hooking up Internet-enabled retail stores to their core banking software to convert the stores into touch-points for basic banking services like cash deposit, withdrawal, and fund transfer within a daily limit of Rs. 10,000, and other financial products like micro-credit and insurance.
The Citibank Touch Screen Kiosk, a self-service banking terminal, is capable of fulfilling non-cash banking service requests for account/ card statements, demand drafts and check books, mobile recharge, credit card/bill payment, fund transfer, ATM PIN change and stoppage of cheques .
With a third of its customers using online banking, ICICI Bank launched 24×7 electronic branches in August this year – one-stop shops for all banking transactions, and 100 % self-service driven. Customers can transact at any time using various automated devices and kiosks. The electronic branch boasts of a cheque deposit machine, a cash deposit machine which offers instant credit (you can deposit upto Rs. 100,000 in 200 currency notes at a time), an interactive kiosk for facilitating Internet banking services and 24-hour video chat with customer care personnel. Customers can even print out their bank statements on A4 sheets.
It is only a matter of time before banks enable not only basic banking transactions but also complex ones through self-service kiosks. This would not only benefit customers; features like stored value card top-up and bill pay from such kiosks would also generate additional revenue for the banks themselves.
What’s more, by migrating routine branch banking transactions to “do it yourself” channels, branches can focus on providing excellent customer service and pushing high value sales.

From increments to exponents: 13 banking trends for 2013

Even as the banking industry grapples with sweeping changes in policy, regulation and customer expectations, a ‘big bang’ transformation in strategy or host systems may not be on the cards this year. A peripheral, step-by-step, incremental agenda will be beneficial for banks in 2013. But don’t be swayed by the word ‘incremental’. Each of the trends in this infographic has the potential to deliver significant business value.