Led by the rising penetration of smartphones and increased prevalence of cheap data plans, India is undergoing a digital revolution which is impacting banking more than any other industry. With financial inclusion on the rise, customers are increasingly showing a preference for digital banking channels, forcing financial institutions to rethink their strategies to connect and serve the population. The impetus on banks to adopt technological innovations is also being propelled by the government’s push towards creating a less-cash economy, with an aim to provide all with access to affordable and efficient digital payment and settlement facilities. Moreover, nearly half of India’s population is young and progressively tech-savvy who prefer online interactions and digital services over traditional mediums. After taking all these factors into consideration, it is no surprise that Indian banks have taken to mobile banking in a big way. Mobile banking systems have also helped in overcoming the hurdle of physical access to branches for availing banking services, becoming a key tool for improving the active financial participation in the country. According to the 2017-18 annual report of the Reserve Bank of India (RBI), mobile banking services registered a year-on-year growth of 92% in volume terms and 13% in value terms during the year. During the same period, the number of registered mobile banking customers jumped by over 54% to 251 million. By all means, the era of mobile banking has arrived and looks like it’s here to stay.
The rising popularity of mobile banking is not just due to the policy focus on Digital India or the improved connectivity infrastructure but also because of the inherent benefits it brings to the table – both for users and banks. First of all, the mobile-banking model is more efficient and cost-effective than branch banking and the agent model. According to a report by Observer Research Foundation, the cost of a transaction through branch banking is estimated to be between Rs. 70-75, while that of mobile banking is less than one rupee. In addition to that, mobile banking is the most convenient mechanism to enhance financial inclusion compared to any other technology due to the increasing adoption and ease-of-use of mobile phones. Furthermore, with the increasing demand for integrated financial solutions platforms, mobile banking services are expanding their reach beyond fund transfers. By leveraging the mobile application-based digital ecosystem, banks are offering online facilities for bills and credit card payments, account and loan statements, request for chequebooks, grievance redressal, and investment management, among others.
Enabling the future
Within a few years, mobile banking services have come a long way, with almost every financial institution having its own app, giving access to a variety of fintech services to customers. Nevertheless, we live in the times of digital disruptions, where technological innovations can change the overall market dynamics and user preferences in the blink of an eye.
As a result, at RBL Bank, we have strived to develop and evolve our banking services in sync with the advancements in technology.
- We have partnered with a variety of non-banking service providers to supply last-mile execution for merchants as well as customers on our mobile banking app
- Apart from offering general banking services, the MoBank 2.0 app also provides Aadhaar lookup and seeding facility, integration with Unified Payments Interface (UPI) and Bharat Bill Payment System (BBPS), and investment tracker with an ability to purchase and redeem Mutual Funds
- The app’s ChatPay payment keyboard lets users transfer funds while texting, which helps it stand out from the crowd of mobile banking apps and is a perfect example of the integration of digital transactions in the day-to-day lives of customers
As the digital trend gathers further steam, we will continue to explore new ideas and innovations to bring integrated and customised financial solutions to our customers within the touching distance.
Going by the sectoral outlooks, digital banking will be the most preferred channel as we move forward. Strong initiatives have been taken by the RBI in strengthening the payment and settlement systems in banks and the regulator is injecting more dynamism by allowing banks and financial companies to offer different classes of services. Over the past few years, India has witnessed a rapid expansion of its digital economy. The financial services sector needs to invest significantly and equip themselves with the latest technological advancements to building on this further. Consequently, the massive incentives – in the form of ample government support and access to the ever-growing digital community – can help banks improve their services, reduce costs and foster loyalty and commitment within an ever-more fickle banking customer base. But above all, digital and mobile banking can help millions of Indians to become active financial participants in the fastest growing economy of the world.