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Advantages And Disadvantages Of Mobile Banking
Advantages, disadvantages and challenges of mobile money banking
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The world has transitioned into the technological era where the use of mobile phone has become remarkably important to connect people globally. Referring to Aijaz and Heikki (2014), mobile banking is often defined as an enabler allowing banks and customers to interact, while mobile money involves peer-to-peer business. To give an example of what these services offer, it would allow for financial transactions such as balance inquiries, funds transfers, bill payments, and inquiries concerning account history. According to KPMG report (2015), the proportion of users in its service has grown rapidly over the past three years, with the number of global users of mobile banking projected to increase to 1.8 billion people by 2019 compared to 0.6 billion …show more content…
Concurrently, poverty and disparity still exist in the world, with Kenya being one of the countries that has a financial inclusion index rank 133 from 176 countries, meaning it has a low percentage of domestic credit at 13.12% based on the borrowers and depositors among the commercial banks as Park and Mercado (2015) researched. In addition, mobile payment service is one of the most successful tools for developing nations as Kenya, which has a population of only 1% of the world 's, as well as being a widely used service in the developed world as Winn (2015) explained. For example, M-Pesa, the mobile system in Kenya that used to send and receive the transactions in real-time, may help to reduce the gap between genders for instance, using mobile money as a replacement of requirement the security of husband’s signature at the bank, and allowing women who have literacy difficulties ease-of-access to the system rather than going through formal financial channels according to Yenkey et al (2015). As Morawczynski (2009) also stated that Kenyan women might receive funds from their counterparts in order to save the money immediately. It is more likely that mobile money assists poor financial women in rural areas because the mobile phone is portable, easy access, cost-saving for transactions between counterparties, resulting in …show more content…
A country which demonstrates the inclusiveness resulting from mobile banking India. Based on the findings of Srivastava (2013), who focused his research on this country, found that 41% of people living in urban areas and 60% of those living in rural areas still do not have the possibility to use traditional financial services. This will enable mobile banking to provide Indians with the opportunity to utilize the services, with the latter being of benefit to both customers and
The digital world is accelerating. New financial technologies (Fintech) will shape the future of domestic and international banking. According to the National Bureau of Economic Research, Fintech firms accounted for about one-third of shadow bank loan origination in 2015 (The National Bureau of Economic Research, 2017). Payment and settlements processes with abilities for a digital wallet, such as comparison & switching account, peer to peer credit, and algorithmic digital currencies are rapidly evolving. Blockchain usage is growing and testing will lead to routine use and drive efficiencies within the financial world.
For example, mobile banking is a benefit and very convenient to customers who don’t have the time to go to a bank or ATM. You can now take a picture of your check through your phone and deposit it through the app! We also always make 100.00 dollars of any check available immediately instead of the entire check being on hold. Another convenient service that we provide is having a debit card machine on hand. Reprints of debit cards are also free, and there is no wait!
The top banking trends are: Mobile banking: Since smartphones have become popular, the mobile phone apps became part of their lifestyle. Many people nowadays are demanding mobile-banking apps, especially the young generation. A survey conducted for Federal Reserve Board’s Division of Consumer and Community Affairs, 51% of smartphone users had used mobile banking apps in 2013, which increased from 3% from last year, and the number is increasing. Therefore, banks need to focus heavily in developing their apps in order to satisfy their customers. (http://www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201403.pdf (Page 1) 2.
Equity bank planned to bring future employees to work in its branch in Nairobi before working at new branches. This may be a challenge, as many employees may not be willing to come to Nairobi branch to work for long time periods. They may be fine for short periods for training. Equity bank needs to think of an employee friendly strategy in this case. Other banks may have entered into Zimbabwe with a similar business model that Equity bank was planning which will increase competition and could take away potential customers from Equity bank. Inflation fears and government’s budget, laws and regulations, approval from the associated authority to open the microfinance business model amidst political corruption, etc. also stand as challenges in front of them. Before entering they need to find out the appropriate medium-tier bank to
Walter (1996) shows that the total cost of buying multiple products from a single supplier will be less than purchasing services from separated providers. The author gives an example that a service provider offers the lower price, information, monitoring, and other transaction costs to a client. I think that when a customer gets a better price, indeed, the universal bank is needed. Furthermore, the universal bank could facilitate customers concerning a one-stop shopping providing what clients need to meet their increasing demand for a complementary range of financial products. Chan (2011) argued that these clients would enjoy the convenience of the one-stop shopping ranging from different services such as equities, unit trusts, insurance, and gold. Debt (2011) looks at customers ' perspective. He thinks that if there is no the universal banking system, clients must spend much time to find products and services from separate suppliers. The author further states that providing complete services, customers can save much time and get the cost of transactions at a lower price from the one-stop shopping. He gives an example that if clients who need to open a saving account and need to loan as well, the universal bank can provide everything what they need or if corporate customers need to initiate an account and need to issue share or bond, the universal bank also can help
In today’s world, a Smartphone has become essential part of daily life. There was a time when transactions happened through barter system. Thereafter was the emergence of notes and coins. And presently, the world is moving towards the “Digital Wallet”. Due to technology, mobile users can use their Smartphone to make money transactions or payments by using applications installed in their phone. Digital wallet system is an essential part of electronic commerce. E-commerce provides the capability of trading on the internet. A digital wallet is a virtual service used as a substitute for physical cash. The present study tries to study the various factors that can affect a consumer’s
Commercial banks are the most important savings, mobilization and financial resource allocation institutions. Consequently, these roles make them an important phenomenon in economic growth and development. In performing this role, it must be realized that banks have the potential, scope and prospects for mobilizing financial resources and allocating them to productive investments (Olokoyo , 2011). The importance of efficient financial system is mostly felt in developing countries since their financial markets are underdeveloped and not strong thus banks plays a crucial role of integrating the whole economic sector of a country by serving as a vital source of finance for the enterprises (Ntow–Gyamfi
users to send money, using computers. The same can be done by means of mobile phones that are support Web.
For instance, the seemingly innocuous mobile phone is actually playing an increasing role in facilitating monetary transactions, especially in Asia. Already, in Japan, large companies such as Coca-Cola have sanctioned vending machines that are not only compatible with common cell phones but also allow consumers to earn credits for using them (Kupetz). In this regard, the United States is strikingly behind the times when compared to other countries. Another new technology in the vein of mobile phones is no-contact cards. These innovative cards do not require a cashier to conduct a transaction; one simply holds a specia... ...
Communication modern technological tools that have been enhanced by Information Technology are having an impact on changing the very structure and communication of banking. That is, clients are enabled to make their banking transactions whenever and wherever they want. Bank clients, by just logging on their online account, can transfer any amount of money from their account to any other account, check their last processed banking transactions and apply for loans and other banking services. According to Keyes ( 2000, p.591) 'electronic checks provide consumers with the benefits of convenience and safety while allowing billers to maintain their existing depository relationships with their banks'. Further, e-mails has enabled bank employees to notify their customers of any new enhanced bankin...
The Negative Effects of Mobile Phones Voice mobile telephony has become widespread since the 1990s. The compass of the modern people is the mobile phone. It is used for expressing movement and its direction. For a mobile phone user, moving around in the city becomes a series of spaces used for keeping contacts and taking care of things ongoing. People call from certain places to certain other people without the fixed line.
Lack of adequate level of telecommunications infrastructure, human capacity building and capital are some of the challenges developing countries are facing in adopting mobile banking. However (Proenca and Rodrigues, 2011) posits that e-banking enable banks to scale borders, change strategic behaviour and create a lot of new opportunities that can significantly reduce the physical costs of the banking operations.
A cashless society will further improve the globalisation that characterise our present time. The computerised systems can be used to decrease the quantity of paper trail therefore substituting paper cash with cashless credits or electronic money transfers. However, in a cashless economy, this will change with certain crimes almost eradicated. It will also be faster to generate electronic payments than cash as Near Field Communications (NFC) chips make their way into more payments cards and mobile handsets as well providing protection not applicable to purchases made using cash. This technology is simple with low power wireless link evolved from radio-frequency identification (RFID) tech that can transfer small amounts of data between two devices identifying us and our bank account to a computer. Another benefit of drawing nearer to a cashless society is that other companies are providing pioneering cash-free solutions to the payment related problems we come across. For example, WisePay, a provider of e-payments services, is deploying technologies that ensure parents no longer have to worry about sending their children to school with cash to pay for meals, excursions and other fees that will eliminate the likelihood of being caught short for cash or children misplacing money. The Government also has valuable explanations why they may deem to turn away from cash. Due the main factor of printing and distributing cash, not to mention ensuring the economy is free from forgeries which are all costly endeavours estimating that the cost to society of using cash is between 0.5 and 1.5% of GDP annually. In addition, there are many technological innovations that propose there is a real enthusiasm for an alternative to cash with the upsurge...
Changing consumer behavior and rising expectations – Today’s customer is a lot more knowledgeable and demanding than he was a decade ago. He needs convenient access to banking through multiple channels, greater control over his personal finance and decisions through customized advisory services and data analytics tools and an optimal customer experience across channels. According to a survey of nearly 4000 retail banking customers in US and Canada conducted by Accenture in 2014, 71% consider their banking relationship to be transactional rather than relationship driven while 51% want their bank to proactively recommend products and services for their financial needs. Internet and mobile banking has long been considered as a differentiating factor and constitutes an integral part of every banks digital strategy. However, in today’s context, consumers just do not expect high quality service through these platforms but also seamless integration between
This is followed in section 5 by an analysis of the recent changes in the banking industry. With the development of the financial system, declining entry barriers and the deregulation of the banking industry make banks no longer the monopoly suppliers of banking services and reduce their comparative advantages which they usually hold in the past. Whether the reasons give rise to the existence of banks are still powerful will be examined here, while section 6 offers a way of considering whether banks are declining by looking at the value added by the banks. When the value added by banks is examined, banks are not a financial intermediation, which not only conduct the traditional services but also provide more diversified