What is Mobile Banking and What are the Types of Services Offered?

Mobile banking has made personal banking services more accessible and convenient. Over the past few years, banks and NBFCs have been coming up with customer-centric applications to simplify financial services.

Continue reading to know more about mobile banking and its impact in the financial services sector.

What is Mobile Banking?

Mobile banking is a service provided by your bank through which you can access financial products and services anytime, anywhere and on the go via your mobile device. Also known as mBanking, through mobile banking, you can apply for loans, credit cards, carry out transactions, make UPI payments, open or close accounts, etc.

Importance of Mobile Banking in India

Following points list the importance of mobile banking in India:

• Through mobile banking, customers would be able to conduct transactions safely
• You can transfer money digitally at any time and from anywhere
• Carry out unlimited transactions 24/7
• You can avail of a number of different banking services through internet banking
• Mobile applications save time and effort compared to traditional banking.
• Money transfers are done in a transparent way, with the source clearly defined through mobile banking.
• Mobile banking enables you to receive mobile notifications from time to time regarding the status of your account balances, money transfers, etc.
• mBanking facilitates larger transactions to be done within seconds.

Features and Benefits of Mobile Banking

Following are the features and benefits of mobile banking:

• Mobile banking enables you to pay your bills without the need to go out physically
• Allows you to view all your transactions clearly in one place so that you can keep a track of your finances
• There is no need to get your bank statements updated physically with internet banking
• You can get offers, discounts on purchases and transactions
• Internet banking works instantly, allowing you to conduct monetary transactions within seconds
• With 24/7 availability, mobile banking can be carried out anytime and anywhere
• You also get several value-added services with internet banking such as mobile recharges, bill payments, etc.
• You can also use mobile banking for investment purposes in the form of securities, pension accounts, etc.

Registration Process for Mobile Banking

Mobile banking registration is extremely simple and straightforward. Your bank or financial institution can be reached to learn more about the entire process. Let us know the basic steps involved in registering for internet banking.

1. The first step would be to download the internet banking app offered by your bank. Usually, banking apps are available for iOS and Android devices both. 
2. For registering yourself, fill in the details required on the app. Check the accuracy of personal and account details twice before submitting them.
3. The app will generate a login ID and password on your mobile number and email ID. 
4. Certain banks also employ OTPs for verifying user details and credentials. In such cases, you will need to enter the OTP received on your registered mobile number and email ID into the app to proceed forward.
5. Using the provided ID and password, log in to the app.
6. Using your credit card pin, enter into your account on the app.
7. You can now start using banking services available on the app.

Different Types of Mobile Banking Services

Following are the different types of banking services:

1. Online Transactions: First and foremost, internet banking’s main purpose for most people is digital transactions. To transfer funds from one account to another, you do not have to physically go to the bank. With mobile banking, this can be done on your smartphone or any other smart device. Transactional services include:

• Transferring funds to others
• Transferring funds to your own account/making payments to others
• Transferring funds from one bank to another
• Setting standing instructions for periodic transfer of funds
• Payments or money transfer through UPI/NEFT/IMPS, etc.

2. Investments: Mobile banking also allows you to invest in several different programs and schemes such as fixed deposits, recurring deposits, mutual funds, shares, etc. It can also be used to avail portfolio management and other consultancy services.
3. Account Details: You can check the status of funds in your account with the help of mobile banking. This helps you to keep track of your expenses and incomes from the comfort of your home. You can check your account balance from time to time through your smartphone. Other facilities include:

• Viewing your transactional history
• Digital account statements
• Digital passbooks
• Digital card statements
• Viewing and downloading loan statements

4. Additional Services: There are several other additional services coupled with your mobile net banking facility. They are as follows:

• Locating nearby bank branches 
• Lodging a complaint regarding banking services
• Applying for opening an account, FD, RD, etc.
• Tracking applications regarding complaints, account opening, etc.
• Applying for a new passbook
• Applying for a new chequebook
• To cancel a cheque issued by mistake

Mobile Banking via Applications

Mobile banking is most common with the help of banking applications. Banks and financial institutions develop high-end applications that assist customers in doing their banking tasks effortlessly. These applications can be easily downloaded online. The registration process for the same has been mentioned above.

Most mainstream banks offer personalised applications for their customers’ ease of managing their accounts. Remote banking has made such apps more and more customisable as per their users’ needs.

Mobile Banking via SMS

A lot of people still prefer SMS for doing their mobile banking activities. This is best suited for people who do not have smartphones and smart devices. Traditional mobile phones support SMS banking along with many perks and facilities.

• Enquiring account balances
• Receiving bank statements
• Receiving card statements
• Block existing debit/credit cards
• Receiving instant notifications regarding money transfer
• Receiving notifications for due bills and payments
• Receiving OTPs
• Tracking EMI due date

Mobile Banking via USSD

You can also avail of mobile banking services via Unstructured Supplementary Service Data or USSD. This facility allows people to conduct basic banking services only. There is no need for an internet connection or smartphone to avail of mobile banking via USSD. Other facilities under this include:

• Account balance inquiry
• Account statements
• Card statements
• Fund transfer
• Receive OTPs
• Change MPIN

Challenges with Mobile Banking

Despite being extremely helpful, mobile banking also poses certain challenges for its users. They are as follows:

• Challenging for people who are not that technologically savvy
• Subjected to digital fraud and several other risks due to rising digital frauds
• Virus and malware attacks are also common with mobile banking accounts.
• Most customers are still apprehensive about using mobile banking services. This lack of awareness is a major challenge in adopting this technique.

Important Tips for Safe Mobile Banking

Following are some important tips for conducting safe mobile banking activities:

• Password Updates: Make sure to update your password for the mobile banking account regularly. This gives you an added layer of security against fraudulent elements seeking to steal important information or even hack your account.
• Secure Network: Another important thing to remember is always to use a secure network to open your mobile banking account. Never use a risky or unreliable server to log in to your internet banking account.
• Avoiding Risky Sources: You must always avoid opening notifications or links from risky sources. Make sure to avoid such sources for any type of bank-related information. This is the most common source of fraud availed by unlawful elements.
• SMS Notifications: Always keep your SMS notification on for the purpose of monitoring your account activity. If any unknown transfer has happened in your account, you will be the first one to know about it. This way, issues can be rectified at the earliest.
• Clear Browser History: Make it a habit to regularly clear your mobile browser history and cache. Deleting temporary files and cookies from your system allows you to be safe from viruses and malware. It also provides security against fraudulent sources.

Final Word

Mobile banking, if used in a proper manner, can be extremely beneficial for customers as well as for banks. By employing this facility, you can exercise banking-related activities faster and in a more reliable way. As a free service, internet banking must be adopted by most people who want to save time and money in processing banking transactions.

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This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.