Mobile Banking: The bank in your pocket
When have you visited your bank last? Is it a week back or two or you do not remember? Well, certainly it is not surprising. The modern banking methods discourage you visiting your bank. With the advent of mobile banking and internet banking, visiting the bank for a service is becoming a thing of past. Mobile banking gives you convenience of reaching to your bank and banking services from anywhere in the world without having to visit the bank. If you have not started yet to avail the mobile banking facility, you would be missing out the convenience and simplicity. In this article, let us understand the concept of mobile banking from the first principles.
What is Mobile banking?
In banking parlance, mobile banking or m-banking is making banking services available on a communication device such as mobile and then availing such facility for accessing financial services and conduct financial transactions. To conduct mobile banking you need to have the support of a telecom company. Further, in India mobile banking is regulated by Reserve Bank of India (RBI). From the academic interest point of view, there are about four models covering all kinds of mobile banking transactions being conducted today. They include the basic conceptual model covering basic mobile banking transactions such as fund transfer, service requests, account statement, balance enquiry etc. Banks, depending upon their structure, come with mobile banking model that suits them. They include, “Bank Focussed Model” wherein only the basic essential services are covered. In the model led by the bank, the management tries to reach their customers far and wide through mobile banking with several services. In the “non-bank” led model, only the services are typically outsourced to a third party.
Mobile Banking Services:
Typically mobile banking is used for knowing account related information and conducting banking transactions.
1) Account information: In the account related information service, the tasks include, requesting for mini statement detailing, say, last 10 transactions, balance enquiry, service request for detailed statement, mobile alert on banking transactions from the account. You may even monitor your loan statement, term deposit receipt, debit card statement, credit card statement or your mutual fund statement.
2) Manage Investments: You can use mobile banking to manage your pension plans, insurance policies.
3) Support Services: Further you can alert your bank to stop payment to the cheques issued by you or get status on cheque payment and you may even order cheque books. Some internet banking related tasks such as requesting PIN, updating PIN can also be carried out. Most importantly, you use mobile banking to block lost debit or credit card instantaneously and request for fresh card issuance.
4) Payments and Fund Transfers: One of the most convenient ways of transacting your business is to use mobile banking service for banking related transactions. You do not have to go to bank or you do not need internet connection to conduct transactions. Banks today offer services such as funds transfer using your mobile. You can transfer funds for either domestic or international business deals or your personal deals. There is a facility called “Cash-in and Cash-out transactions” at automatic teller machines for cash related tasks. You can do your prepaid mobile recharging or account top-up. You can pay your bills like electricity bills, insurance premiums instead of standing in long queues. You handle your micro payments through your mobile banking service. General commercial payment processing is a time taking task at regular banking in the banking for that it requires many verifying tasks. On the other hand your mobile saves lot of heart burn with its easy approach. There are some special transactions called “peer to peer” payments, withdrawal and depositing as banking agent are conveniently handled using mobile banking.
How mobile banking works?
Mobile banking is based on using short messaging service or popularly known as SMS. For each of the transactions there is a sequence of sending SMS which will enable you to conduct the required transaction. For example, while depositing the amount, the user authorizes the transaction and receives the credit and while withdrawing, the user receives the debit in his mobile wallet.
How secure is Mobile banking?
It is natural for you to doubt the security of mobile banking in the open domain. The threat of hacking always looms large over open domain transactions such as mobile banking and internet banking. All the security issues are well addressed by the bankers and service providers. Each and every transaction involves authorization and authentication. The data is transferred over a secure network and gateway. Further, data is encrypted while being transferred over the open domain. The recent phenomenon of using one time password has made all the mobile banking very secure.
Mobile banking has revolutionized the way banking transactions are performed. The days are not very far, where customers are met over the virtual space for conduction of banking business.