Mobile banking can reach the unbanked

Considering that mobiles have become omnipresent in India, mobile banking is logically expected to become a successful medium for banking services. However, at the Mobile and Money India 2009 event held in Mumbai on Wednesday, Rajib Chatterjee, vice-president, ATM, net and mobile Banking, HDFC Bank feels Indian banking has not found a killer application for mobile banking. Chatterjee thought that providing a killer application of mobile banking to the age group of 21 to 40 would definitely give a boost to mobile banking.
He said, “ATM (automated teller machines) users were drawn to net banking and these in turn to the mobile banking. But we have found that only 10 per cent of the customers have been availing it.”
The event was chaired by Robin Roy, associate director at PricewaterhouseCoopers and the topic of the session focused on the opportunities of banks and mobile network operators in mobile.
Mobile banking is availing of banking services on mobile handsets. According to the Reserve Bank of India guidelines, providing the framework for enabling mobile payments services to banking customers would generally involve the collaboration of banks, mobile payments service providers and mobile network operators (MNOs).
In mobile payment systems, the banks provide the basic service framework, and the mobile payments service providers are intermediaries for providing the technology framework for the implementation of the mobile payments services. The mobile network operators provide the telecom infrastructure and connectivity to the customers.
However, mobile banking has not picked up as expected. The shortage of the number of bank accounts is among the few reasons. There are many districts and towns where people do not hold bank.
Diwarkar Goswami, executive manager, Deloitte research said at the event, “Mobile banking is not the pathway to revenues. Providing access to the unbanked people has to be in focus.” But Goswami said that in rural areas IVRS (Interactive Voice Response System) could be worked out as an option for mobile banking.
For mobile operators it could be difficult to provide mobile banking to low ARPU customers. Mohammad Jakirul Islam, business development and strategic initiatives, of the Bangladesh-based operator Citycell said, “How far can the banks reach?” In certain areas mobile banking service needs to step in, Jakirul added. Citycell is the fifth largest operator in Bangladesh and is the only CDMA service provider in the country with a subscriber base of around 20 million.
Jakirul cited an example of a pilot that Citycell has begun in Bangladesh. The company has introduced direct top-up cards for its postpaid customers. The service will enable users holding any bank account to pay their bills through mobile. “We are also in the process of seeking regulatory approval for the prepaid service,” Jakirul stated.
According to the RBI website there are currently 32 banks that have been given approval for mobile banking services in India of which only 21 banks have started providing services.