By the end of 2018 more than 5.1 billion people were connected to mobile services according to the ‘Mobile Economy 2018’ report published by Groupe Speciale Mobile Association (GSMA). The report further suggests that these figures are expected to reach 5.9 billion by 2025
So it’s no surprise that the mobile economy has witnessed steady rise over the last few years. After all, you can complete most transactions from your phone these days – right from ordering a pizza to booking air tickets and so much more in between. Today consumers have come to expect the same level of convenience from every service provider, and most financial as well as non-financial service providers have developed apps that allow you to meet your basic needs through a few clicks on your mobile device.
Before we jump into the advantages of mobile banking, let’s first understand what is mobile banking?
What is the use of mobile banking?
Today, banks and financial institutions can offer a bouquet of services through the collective use of various mediums mentioned above. Mobile banking facilitates customers to leverage services beyond basic financial transactions like sending and receiving money. Now you can make all types of financial investments from term deposits to mutual funds, equity and even purchase insurance plans.
You can make loan applications, repay credit card dues and pay grocery and utility bills. You can even set up standing instructions for various payments and investments. Many banks also have tie-ups with e-commerce websites and service providers that will offer you discounts and cashback on usage. Whether you are trying to buy new clothes, watch a movie or book airline tickets, almost every financial transaction can be directly routed through mobile banking.
How mobile banking works?
The mobile banking facility works over multiple platforms, with the most basic use of technology for mobile banking being the SMS service. Customers can send a request via a predefined text code to a number specified by a bank, and the bank replies accordingly. This feature works on every mobile device, irrespective of the make, model or network carrier. This is especially useful for people who do not have smartphones or data connectivity.
Next, you have the Interactive Voice Response or IVR facility. Banks set up a helpline number (usually toll-free) which has an electronically stored menu of options that can be accessed in a text-to-speech format by pressing the number on the mobile keypad corresponding to the service. However, an IVR can usually only be used for enquiry or emergency based assistance.
Based on sophisticated technology, you have the Wireless Application Protocol (WAP) that is just like an internet banking system for mobile web browsers. The advantage of using mobile banking through a WAP architecture is that you can use all the services without downloading any proprietary software. Finally, there is the standalone mobile application, which is a highly customisable and secure channel that allows you to conduct a series of complex transactions.
So when you ask what is mobile banking? It is not just a banking app but a host of text, telephony and internet-based services that complement each other.
Advantages of mobile banking
If you still rely on traditional ways of banking, here are a few important reasons that will help clarify what is mobile banking and why you should consider joining the mobile banking revolution.
Convenience
Bank branches appear on high streets in most towns and cities, but most banking customers hardly step into one of these branches to manage their finances. The internet allows you to do most of your banking on a computer or laptop from the comfort of your home. Mobile banking, however, takes this convenience a step further. You can now log in to your account from your phone and access it wherever and – more importantly – whenever you need to. One of the most significant benefits of mobile banking is that it is never closed.
Easy access
Ease of access is one of the biggest advantages of mobile banking. You can carry out pretty much any financial transaction from your mobile bank app. So if you’re out and about and you want to transfer cash from one account to another, you don’t have to find a branch or wait until you get home. You can even send money overseas through banks. Another benefit of mobile banking is that you have 24/7 access to your accounts, which allows you to keep a watch on your finances, as you’re able to monitor your spending constantly.
Higher security
As discussed in one of our previous blogs on on mobile security, there are some innovative ways to protect your phone. One of these is multi-factor authentication (MFA) which involves logging into an account using two or more credentials – for example using something you know like a password; followed by something you have – like a token; or something you are, which is your biometric identification. Thanks to MFA, banks can link your account with your mobile device, so that they are alerted when someone else is trying to log in.
The importance of mobile banking?
Today your mobile device is literally your financial gateway to the world. Banks are divesting out of brick and mortar structures and making higher investments in financial technology to bring customised interfaces, provide enhanced security and introduce a larger bouquet of services in an effort to enhance customer stickiness.
As fintech companies and banks are tinkering with practical uses of Artificial Intelligence in the banking system, mobile banking channels may be able to provide many more services in the future, expeditiously and transparently.
Also read: Benefits of Transferring Money Abroad through Mobile Banking Apps
Thanks for explaining that mobile banking offers ease of access. My boss wants to improve the customer experience this year so they’ll tell their friends.
Useful information on advantages of mobile banking. Thanks for sharing this with us!