48-nov-c122.pdf

A STUDY ON THE ROLE OF MOBILE BANKING IN ECONOMIC GROWTH
Dr. L. Solomon Raj S. Reshma
Assistant Professor M.Phil. scholar
Department of commerce Department of commerce
Loyola college, Chennai Loyola college, Chennai
E-mail- profsoloman@rediffmail.comreshmasamreen06@gmail.com
Mobile no: 9600990048
ABSTRACT
Mobile banking is a wireless banking system which came into existence after introduction of
Internet banking. M-banking system attracts large number of customers with its services like
24/7 any time access and to perform sophisticated transactions using their mobile devicessuch
as a smart phones or tablet. These services give a platform to commercial activities in a very
simple and transparent manner. M-banking is gaining wide range of acceptance among
various sectors and sections of society. The increasing adoption and ease of use of mobile
phones makes mobile banking an ideal mechanism to propagate financial inclusion as
opposed to any other technology. The shift from formal banking to m-banking has a
remarkable change in Indian banking history. This study is based on primary and secondary
data to signify that M-banking plays active role in Indian economic growth.
Keywords: Mobile banking, wireless banking, m- banking, formal banking, Indian banking,
economic growth.
INTRODUCTION
Mobile banking was established by the European organization called pay box assisted
monetarily by Deutsche bank, in 1999.SMS was the advance financial services offered. It is a
developing field in banking segment. The establishment of old model mobile phones had
constrained usefulness. Old model mobiles phones, palm PCs and PDAs were inadequate
with regards to equipment and programming support. The price of cell phones has been
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Volume 8 Issue 11 2019 458
ISSN NO: 1021-9056
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decreased gradually, yet there is rise of innovation. System speed is greatly improved and
data are not costly. All these progressions have given basic material to the development of
mobile banking and the quantity of individuals utilizing mobile banking is expanding step by
step. People, who were utilizing PCsfor web-based banking are moving towards mobile
banking on account of usability and quick access.
MOBILE BANKING IN INDIA
Mobile banking was introduced in the form of SMS alert automated call centre in year 2002.
ICICI bank launched the mobile banking in full-fledged manner in 2008.It integrated all the
main functionality thatare available todayin mobile banking application. M-banking started as
a branch of web banking to further guide us with convenience and simplicity in its entry. In
2018, practically all banks have cell phone applications for monetary exchanges. These
applications evacuate the necessity of having a PCs to move reserves, and made visiting to
the bank an irregularity. When a user downloads the mobile banking application on their
mobile, banking exchanges can be completed according to their benefit.
DIGITAL INDIA PLAN THROUGH MOBILE BANKING
The Government has taken steps for making India a “DIGITAL INDIA” in 2015.They
provide their services to citizens electronically by improved online facilities and internet.
Digital technologies includingmobile applications have emerged as catalysts for rapid
ECONOMIC GROWTH across the globe. Theyenvision transforming our nation and creating
opportunities for all citizens by harnessing digital technologies. Thevision is to empower
every citizen to access digital services, knowledge and information.
Computerized India is a crusade propelled to the administration of India to provide the
government’s service that are made accessible to natives electronically by improved web
availability, in orderto make the nation digitally enabled inthe field of technology. Digital
innovation isprogressively utilized by us in regular day to day existences from retail locations
to government workplaces.
Source: Secondary data
ADVANCEMENT OF MOBILE BANKING IN INDIA.
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Mobile banking services had a growth of 92% and 13% in volume and value terms. The
number of registered customers in M-banking is 163 million at end of march 2017 and raised
by 54%. i.e. 251 million at end of March 2018.
Source:Secondary data (RBI annual report 2017-2018)
OBJECTIVES OF THE STUDY
1.To studyabout mobile bankingactivities.
2.To know about government initiative towards mobile banking.
3.To analysedifferent preferences of users in mobile banking with respect to age, gender and
occupation.
SCOPE OF THE STUDY
This paper helps the reader to understand the activities of mobile banking in economic
growth. The reader also understandsindividuals’ preferences towards M-banking. Further, the
study will help telecom service providers, bank, government and digital wallet provider to
understand individual expectation and benefit they receive, also it’ll help tomake necessary
improvementto particular age group of people andpeople who do not use m-banking due to
various reasons.
REVIEW OF LITERATURE
Becirovic, S., Bajromovic, DZ., Ahmatovic, A.,(2011)determined there are1.3 billion
mobile phones around the world which have emerged in the past 20 yrs., compared to the
more than 2.5 billion landlines built over the last century. mobile banking seems to be big
trend after micro finance that has gathered 90 million customers in 30 yrs. The paper
analysed working of mobile banking can facilities economic development through micro
financial institutions.
Dikit S.V., Shringarpure A.A. and Pathan F.N.92 (2012)in his study entitled as, “It is a
new generation platform in India. It is considered as fastest, latest and easiest way to conduct
bank transaction. Arrival of smartphones devices, usage of internet and application-based
banking has emerged as a new concept with this space. Tari ensure fast and reliable
communication for enabling banking in handsets. As the users increase day by day, there is
scope for banking. Customers to be made aware of banking concepts through phone. To gain
wide usage banks should make tie up with service provider.
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Wambari Andrew (2009), has focused his study on providingbanking services to poor
people in rural areas is difficult and costly as branches need to be set up. Mobile banking act
as intermediate to connect to rural people and it is cheaper too. The researcher also discussed
about emergence of m-pesa and its impact toward small business in developing country like
Kenya.And had a major influence towards economic development.
Zahra Rahmani, Atusa Tahvildari, Hamideh Honarmand, Hoda Yousefi, Marjan
sadegh Daghighi, has determined that mobile banking promotes mobile commerce and its
evolution has given number of benefits to its customers by its services.
Simplice A. Asongu & Nicholas M. Odhiambo, (2017), has focusedthat mobile banking
will have inclusive development (quality of growth, inequality and poverty). And
encouraging mobile banking will substantial improve the challenges of quality of growth,
inequality and poverty in developing countries.
RESEARCH METHODOLOGY
In this study, descriptive method is used for collecting primary data by distributing
questionnaires through google forms. The users were from various age group, profession and
belong to various locations within Chennai city.
Sample size:Large Sample (100 respondents)
Data collection: Primary data are collected through survey obtained from a well-structured
questionnaire and Secondary data are through various sources like internet journals, articles,
and Rbi reports, etc.
Statistical tool used: Percentage analysis, Chi-square analysis
LIMITATION OF THE STUDY
The study was done in Chennai. The maximum number of respondents were from age group
of 18-45 only. The study is limited to those who use mobile banking.
THEORETICAL FRAMEWORK
Advancement in technology has changed the essence of banking sector on a worldwide scale.
The following are some of the enhancement in banking sector.
MOBILE BANKING SERVICES
Mobile banking can be divided in to three different concepts based on academic model
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1.Mobile accounting
2.Mobile brokerage
3.Mobile financial information services
These concepts include list of items
1.MOBILE ACCOUNTING
They include account operation and account administration.
2.MOBILE BROKERAGE
3. MOBILE FINANCIAL INFORMATION SERVICE
They include account information and market information
Some commercial banks providemobile banking apps to enable basic services to be done
through mobile.
Accounting
operation
•Fund transfer, Bill payment
Account
administration
•Ordering checks,personal inf, managing
lost, stolen cards, updating profiles.
MObile
brokerage
• Buying and selling of
stocks, securities, obtaining
current information about
securities.
Account
information
• Inf on branch and ATM
location,credit/debit
cards,statements,alerts,balance inquiries
Market
information
• Product and services,currency
exchange,interest rates.
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HDFC BANK MOBILE APPLICATION
HDFC Bank is one of the biggest banks. Its mobile banking app allows basic services like
account summary, transfer funds, make credit card payments and pay utility bills to its
customers. This app is also available in Hindi and has a “LITE” version with lower internet
speeds and covers the most regularly used services.
ICICI BANK’s–“IMOBILE APPLICATION”
ICICI Bank appsis versatile financial application in India. It enables users topay utility bills,
account summary, open fixed accounts and recurringaccounts, Life Insurance policies a/c.
This application enables clients to move reserves through UPI payments to an email id or
mobile number. It also helps tocheck loan eligibility and avail loans through credit and debit
cards.It provides smartwatch application. i.e.I-wear enables users to record data through their
smartwatches.
AXIS BANK’s –“AXISMOBILE APPLICATION”
The Axis Mobile application is known forbasic services it allows users to schedule credit card
payments dates according to their comforts, payment of credit card bills in EMI’s, block
cards, set limit to their purchases. Customers are allowed to give feed back to their banks.
SBI’s – “ANYWHERE PERSONAL APPLICATION”
SBI provides fundamental banking services through anywhere personal app is formerly called
the state bank freedom app available in Hindi and English. It allows user to transfer funds
through mobile number or email id with cash feature. Last 150 transaction information is
provided in mpass book option. SBI also supports smartwatches wear app to access their
account.
BANK OF BARODA’S –“M-CONNECT PLUS APPLICATION”
Bank of Baroda’s m-connect app is an upgraded version of m-connect plus app. This app
allows the user to perform basic banking services and card less cash withdrawals from bank
of Baroda ATMs. Users of this app is benefitted by viewing their account details and
transaction history and facilitates making requests for a new chequebook. This app provides
users with 7 regional languages.
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After the introduction of digital Indiaprogram, there was a vast emergence of digital wallet
technologies from petty shops to government sectors. They also perform similar services as
banksbut their exiting offers attract lot of customers. Some of mobile wallets are listed below.
1. Paytm
2. Phonepe
3. Payzapp
4. Mobikwik
5. Amazon Pay
DATA ANALYSIS AND INTERPRETATION
This study is based on qualitative research. Data is collected using structured questionnaire
and circulated through google form. The respondents of the study are selected on random
basis. Theyarefrom different occupations and with different age group. The sample size is
100 respondents. The following table shows the demographic characters of the respondents.
Table 1:Demographic background of the respondent
Demographic
feature
Variance Frequency Percentage
Gender Female 44 44
Male 56 56
Transgender 0 0
Age 18-25 24 24
26-35 34 34
36-45 26 26
46-55 10 10
56 and above 6 6
Marital status Single 48 48
Married 52 52
Occupation Govt employee 6 6
private employee 26 26
Retired employee 4 4
Student 24 24
Others 40 40
Source:Primary data
Table 2: Use of mobile banking for financial transaction
Particulars Frequency Percentage
Frequently 28 28
Very often 42 42
Often 18 18
Some times 10 10
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Source: Primary data
From the above table it is understood that majority of the respondent use mobile banking
frequently and very often in day to day life.ie. 70% of the respondent prefer mobile banking.
Table 3: Factors that promotes use of m-banking
Reduced time 14 14
Cost effectiveness 18 18
Easy to use 36 36
Innovative technology 18 18
Speed of transaction 14 14
Total 100 100
From the above table it is understood that majority of the 36% of respondent felt it is easy to
use, 18% of respondent felt it is cost effective and had innovative technology and 14 % of
respondent felt it reduces time and speed of transaction these are the factors that promotes use
of m-banking
Table 4: M-banking would make banking more comfortable to use
Frequently 18 18
Very often 64 64
Often 14 14
Sometimes 4 4
Never 0 0
Total 100 100
The above table describes that 64% of respondent very often, 18% of the respondent
frequently felt it is comfortable.14% and 4% of the respondent felt it is often and sometimes
only comfortable.
Chart 1:Balance inquiry facilities and stop payment service provided by m-banking
Never 2 2
Total 100 100
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HYPOTHESIS TESTING
Chi-square test was performed in order to analyse the above-mentioned objectives.
Question 1:
H0: There is no significant difference between gender and mostly preferred m-banking
service by customers.
H1: There is a significant difference between gender and mostly preferred m-banking service
by customers.
Gender/
Preferre
d m-
banking
service
Bill payment
Fund
transfer
Investment
Pension
funds
Recharge
Grand
total
Female 6 16 18 2 2 44
Male 18 26 4 2 6 56
Transgen
der
0 0 0 0 0 0
Grand
total
24 42 22 4 8 100
P =0.001174036< 0.05
From the above table it is obtained that the calculated value is less than the table value. Thus,
null hypothesis is rejected. There isa significant difference between gender and mostly
preferred m-banking service by customers.
Question 2:
0
10
20
30
40
50
60
Very good Good Average Poor Very poor
Chart Title
Balance alert Stop payment service
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H0: There is no significant difference between age and frequency in making m-banking
transaction
H1: There is a significant difference between age and frequency in making m-banking
transaction
Age / M-banking
transaction
Daily Weekly Bi-
Weekly
Monthly Occasionally Grand Total
18-25 6 12 4 0 2 24
26-35 4 14 12 4 0 34
36-45 0 16 6 2 2 26
46-55 2 2 4 2 0 10
56 and above 0 0 0 6 0 6
Grand Total 12 44 26 14 4 100
P =0.000143782< 0.05
From the above table it is obtained that the calculated value is less than the table value.
Thus, null hypothesis is rejected. There is a significant difference between age and frequency
in making m-banking transaction.
Question 3:
H0: There is no significant difference between occupation and total amount of transaction
made through m-banking in a month
H1: There is a significant difference between occupation and total amount of transaction
made through m-banking in a month
Occupation / Total transaction
amount made through m-
banking
Up
to
5000
5001
to
10,000
10,001
to
20,000
20,001
to
25,000
25,001
and
above
Grand
Total
Govt employee 2 0 4 0 0 6
Private employee 4 4 4 12 2 26
Retired employee 0 2 2 0 0 4
Students 6 10 6 0 2 24
Others 4 16 12 4 4 40
Grand Total 28 16 8 32 16 100
P=0.025420735< 0.05
From the above table it is obtained that the calculated value is less than the table value. Thus,
null hypothesis is rejected. There is a significantdifference between occupation and total
amount of transaction made through m-banking in a month.
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FINDINGS:
 Respondents of the mobile banking: male (56%) compared to female(44%).
 34% of respondent is between 26-35 years of age. The respondent of age group 56
and above is only 6%.
 40% respondent use mobile banking from others category excluding the govt
employee, private employee, student, retired employee.
 2% respondent never use m-banking for their financial transactions.
 36% of the respondent feel easy to use. 4% respondent use m-banking when no other
alternative is available.
 There is a significant difference between occupation and total amount of transaction
made through m-banking in a month.
 There is a significant difference between age and frequency in making m-banking
transaction.
 There isa significant difference between gender and mostly preferred m-banking
service by customers.
SUGGESTIONS:
 Awareness program to be conducted to the people who regularly perform transactions
through the tradition way of going to bank in person.
 Awareness programs to be promoted on Do and Don’t of mobile banking through
media, advertisements and social networking sites.
 Conducting Training programs on hacking, phishing, importance of antivirus
programs, maintaining secure passwords which will provide confidence (to overcome
the fear factor, insecure thinking etc) to the end users.
 Awareness session on importance of not save password/password sharing to avoid
misuse by unauthorised persons in case of mobile lost or mobile theft. Reachable
helpline numbers who can assist in case of emergencies.
CONCLUSION
After the introduction of digitalisation, smart phonehasimmense potential for movement of
financial transaction, thus leads to financial growth. For additional growth of economy, the
telecom service provider, banks, government and digital wallet provider should concentrate
on people aged 56 and above, people who do not afford to buy smart phone,farmers who
were not aware of mobile bankingshould be focused through awareness programs. This will
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lead to governments target to reach 5 trillion dollars economy and also to maintain
sustainable development.
REFERENCE
1. Becirovic, S., Bajromovic, DZ., Ahmatovic, A., The role of mobile banking in enhancing
economic development (2011) International conference communication and business
sector, Berane fmsk, pp.89-98.
2. Dikit S.V., Shringarpure A.A. and Pathan F.N.,2012. “Strategies to make mobile banking
popular in India,” Advances in management, Advances in management, vol.5(12),
December.
3. Simplice A. Asongu & Nicholas M. Odhiambo, Mobile banking usage, quality of growth,
inequality and poverty in developing countries (2017).
4. Wambari Andrew, Mobile banking in developing countries (a case study on Kenya)
(2009).
5. www.rbi.com
6. Zahra Rahmani, Atusa Tahvildari, Hamideh Honarmand, Hoda Yousefi, Marjan sadegh
Daghighi, Mobile banking and its benefits. Arabian journal of business and management
review (OMAN Chapter) vol.2, No.5, Dec 2012.
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