M-banking in India: A strategic analysis of issues and challenges

Technology has, for better or worse, undeniably brought about a change, hitherto unimagined, in our life styles. The transformation brought about by technology in the area of delivery of financial services has, thankfully, only been for the better. Internet Banking complemented by core banking solutions implemented by banks, mobile banking, card based electronic transactions at any bank ATM and merchants locations (both physical and through e-commerce sites) have offered a variety of channels to bank customers to conduct their payment transactions. During the last one decade, things have changed and changed at a rapid pace and all because of technology. The initial steps of tapping technology came in the form of adoption of the Core Banking Systems (CBS) which led to near collapse of geographical location of parent branch. Most of the customers would be tapping the technology led internet banking and interconnected ATM network. The desktop PCs became our anytime bank branches. Then came the next revolution – mobile banking which added anywhere to the truly anytime banking. Weaning the customer from physical banking and building customer awareness and confidence in these non face-to-face modes of banking has been a herculean task for the banking industry. In this exciting and challenging journey, the Reserve Bank, as a pro-active regulator, has defined enabling policies and, at times, has goaded the industry in achieving the desired results. The Governments, both at the central and the state levels, have also been taking measures in encouraging electronic payments and receipts, such as, electronic benefit transfers and e-mode of transactions for their receipts and payments. This paper highlights the payment system industry to introspect the conceptual view, issues and challenges in confronting customization of mobile banking in India with all the stakeholders.