In India, many people prefer using mobile phones than visiting banks. Mobile banking services like sms banking, phone banking and online banking are gaining increasing attention amidst huge number of Indian people in today’s world.
Let’s take a look at the various reasons for the need of these services in India. The various reasons are as follows-
#Huge costs involved in setting up of several bank branches
Setting up of bank branches is very expensive as well as time consuming. Various research studies state the impact of expensive process of setting up several bank branches. Studies also estimate that along with sky-rocket costs, it will take around 20 years to reach entire Indian population of 1.2 billion.
The only viable and cost-effective way out of this is providing mobile banking services to the people within minutes. This will enable people to retail online services benefit like sms banking and phone banking. Enable people to perform vital banking functions like payments and money transfer online easily through their mobiles.
Further described about the rational facts which reveal the need for bank services in India through mobile.
#Large population of India don’t have proper bank accounts
Mobile banking services like sms banking is the need of today. One of the striking facts which reveal this need is the fact that most of the Indian people don’t have banks accounts! Estimates state almost 60% of India’s population doesn’t possess banks accounts. Hence, they are not able to benefit from services like fund transfers. Sms banking and phone banking services will solve this problem giving additional benefits to customers.
#Limited number of bank branches existing in India
Another challenge lies in taking banking services to entire Indian population via setting up of several bank branches. As stated before, the huge costs and time involved make this an expensive process. Also the limited number of bank branches existing in India acts as another hurdle. There are just 90,000 branches of banks existing in India. In order to cover the entire population using physical bank branches is estimated to take 20 years or more!
#Cheaper transactions via mobile phones
As per Citibank, mobile banking costs are 10 times less expensive than transactions using bank branches.
#More people have mobile phones
Large sections of India’s population possess mobile phones but no bank accounts. Hence, it makes the case of utilizing mobiles for financial services such as payments more compelling.
Mobile banking presents great future prospects due to its cost effectiveness as well as ability to contact or reach customers in the remote areas.
#Ability to carry out Cheque truncation
Phone banking services will enable people to carry out cheque truncation using mobile phones.
#Greater efficiency to provide loans
Greater efficiency to provide loans presents another good reason for setting up of mobile banking services in India. This process will further decrease the need to visit branches of banks for any kind of transaction.
By adege from Pixabay