Your mobile phone – The hub of all things digital

The mobile smartphone is now everything at once – companion, personal banker, shopper and entertainer. Are you using your mobile phone to its fullest potential?

You forgot that today was the last day for your insurance premium payment. While you wait for the traffic lights to change, you quickly pull out your phone and make the payment from your mobile banking app…

Your sister wants to go shopping – it’s her birthday next week and she’s really excited! So like a doting older sibling, you transfer money to her account during your coffee break at work…

You are on holiday in Italy and you just spent an afternoon drinking coffee and eating cookies at a café. But your account balance is running low – so you quickly transfer funds from another account to maintain the minimum balance…

You are reading a news article on your phone when an ad for a cute pair of shoes appears on your screen. What the heck, your anniversary’s coming up – why not gift yourself a nice pair of shoes? So you quickly order the shoes online and then continue reading the article…

All of these situations – and more – are plausible in each of our lives today. We just casually whip out our phones for everything we need. Last minute shopping, ordering groceries, booking movie tickets, watching your favourite show on Netflix…the list of things you can do on your mobile phone are endless. And now, with so many new mobile banking apps out in the market, your smartphone is also your personal banker.

A brief history of mobile banking

Using your mobile phone to bank – it’s such an exquisitely simple idea, we’re surprised it wasn’t thought of much sooner! The first instances of banking using mobile phones were seen in some European countries in 1999 – they used an SMS banking modality that was later refined when WAP-enabled smartphones were introduced in the market. However, before the year 2010, most mobile banking usage was restricted to accessing the bank’s desktop website on the phone. It was only after the year 2010 that mobile apps downloaded directly on the smartphone began to be used for banking in the West.

Today, mobile banking apps are available for both Android and iOS platforms and can be downloaded for free.

Anytime, anywhere…just bank!

If you think mobile banking is not about to become the definitive game changer in the banking arena, think again and ponder this statistic: as many as 1.75 billion smartphone users around the world will use their mobile phones for banking by the end of the year 2019, says a Juniper Research report. This is a rise from 800 million mobile banking users in the year 2014.

Plus, the report adds that though the maximum banking transactions are still taking place over desktop PCs and laptops than mobile phones, this picture is set to change with the numbers of mobile banking users far exceeding those of PC banking users.

So why are people this enamoured by mobile banking? For one thing, it gives you quicker access to your personal and business finances. For another, you can use your phone’s functions for a more personalised banking experience. A third factor is the gamut of functionalities that mobile banking provides, such as:

  • Online money transfers using peer-to-peer transfer protocols, to receiver’s mobile number or email ID.
  • Opening fixed and recurring deposits online
  • View account balances and last transactions.
  • One-touch access to all important banking data.
  • Pay bills and get instant receipts

…and so much more

The genius of mobile banking lies in its simplicity. You may not have an Internet connection on your laptop wherever you go, but you will certainly have a mobile signal. And as long as you have a mobile signal – whether in the middle of a lake or on top of a mountain – you can bank.

Carrying your bank in your pocket

The question naturally follows: if your mobile phone is your pocket bank, will you need a physical bank branch at all?

With mobile banking capabilities evolving at tremendous speed every year in India, we could very well be looking at a time when banks do not need to be present at all – the banking app would be the bank’s virtual equivalent and it would perform every single monetary function you would ever need. In fact, it would include a wide range of functionalities – banking among them – and would be a one-stop money managing and expense account.

But all fantasising about the future aside, could this really happen? Not so fast, say banking experts. The proliferation of mobile banking technology, and indeed, mobile phones, has not been as widespread in India as it has in countries such as the US, but when it does, the picture may change dramatically. In 2015, more than 1,600 bank branches shut down in the US while many branches reduced their staff strength – and these developments were all linked to the increased use of mobile banking apps. Digital experts content that these developments are taking place at a time when the US and Europe’s digital prowess has not yet hit peak disruption levels.

However, the new phenomenon of ‘payment banks’ being set up in India – 11 private companies were given licenses by the RBI a few months ago – is likely to cause a big disruption in the way banks operate. Since these payment banks can do everything that other banks do, except for lend money to users, and since they can become an important linkage for customers remotely located from the nearest bank branch, there are signs that India may race towards a ‘fully banked’ status in a decade’s time. Mobile phones are projected to do everything for customers except for depositing cash in the bank and opening a bank account. Many more such payment banks are expected to open in the coming months in India.