CHAPTER 1: LITERATURE FRAMEWORK ABOUT MOBILE BANKING 4
1.5 Benefits of development of electronic banking services through Mobile Banking.15
When users want to interact with the bank, simply follow the desired menu option, enter the required data in the appropriate information. When all client information has been entered, the encrypted data will be converted to SMS and sent to the bank. This application works similar to SMS banking. The difference is that customers do not need to remember and prepare orders, therefore, STK is like a translator between the customer and the bank.
STK has the advantages such as do not require large memory, high processing speed mobile devices, complicated software to install; customers do not have to remember the structure of standard message according to bank‘s regulation.
However, due to specific mandatory requirement to use a special SIM, the biggest obstacle problem with STK is that the clients must change SIM if they want to use the services of many different banks. At the same time, the SIM will also need to be changed when a new application is installed on the SIM.
1.4.2.2 Mobile Application
Along with the development of the internet, mobile technology (GPRS/ wifi/
3G/ 4G,…), and especially the great growth of the mobile industry (smart phone) has created a strong improvement in mobile banking service . There are many possible ways to implement various services based on different technology applications as described above. Of course, each solution has its own advantages and disadvantages, however, mobile application up to the present, is regarded as more comprehensive in terms of convenience, security, diverse features, easy updates, ...For this reason, this technology is now being considered the first choice for development goals of mobile banking services in most banks in the world such as bank of America (U.S.), Citibank (U.S.), Barclays (UK),...
1.5 Benefits of development of electronic banking services through Mobile Banking
To explain the assessment of the economic experts about the inevitable trend of development of mobile banking services, in the following sections, this paper
will make an analysis of the benefits of mobile banking services brought to banks, customers, and telecommunication companies.
1.5.1 For banks
Banks can realize operational efficiencies by adopting an integrated channel strategy that includes mobile banking. As shown in Figure 1.1, the cost of processing a transaction via mobile phone can be as much as 10 times lower than via an ATM and as much as 50 times lower than via a branch.
1.5.1.1 Opportunities for operational efficiencies
The more transactions that banks can drive to mobile phones, the greater the possibility that they can close poorly performing branches and increase operating efficiencies by shifting the focus of branch employees from transactions to more advisory-type services that will lead to greater sales or cross-selling rates.
1.5.1.2 Opportunities for revenue growth
Mobile banking offers banks several opportunities for increasing revenues.
These include monetizing the value of customer analytics, delivering greater real- time access to products and services, and conducting targeted marketing campaigns based upon the knowledge of consumer preferences that banks collect.
+ Expanding distribution and coverage models
Mobile banking gives banks the potential to expand beyond their geographical footprint as well as ability to cross-sell and up-sell products to existing customers.
Banks that harness these additional mobile financial services capabilities can see a profound impact on the nature of the banking relationship.
+ Monetizing the value of customer analytics
Unlike supermarkets, department stores, and other businesses that see only one dimension of consumers’ spending habits, banks have a broader view of what their customers buy and where they like to shop. This puts banks in a specific position to develop a new line of business focused on bundling data analytics for retailers and other entities vying for customer intelligence — while maintaining the privacy of individual customers’ information. Merchants could employ such aggregated information to target customers more effectively than they might through other
means. In addition, banks could use this knowledge of their core customers to strengthen their own abilities to acquire new customers, cross-sell existing customers, improve decisioning capabilities, and provide better customer service — resulting in significant value streams for banks.
+ Delivering greater real-time access to products and services
Mobile banking could provide bank customers with the ability to compare options at time and place of purchase. At the same time, banks could offer these shoppers complementary services, such as financing or leasing options, insurance quotes (through partnerships), and more.
+ Offering discounts and purchasing incentives to bank customers
By establishing relationships with manufacturers and retailers that could offer bank customers discounts while they research product options at the point of sale, banks can position their mobile channel as something more than just a convenient way to pay.
+ Conducting targeted marketing campaigns
Similarly, banks could conduct a variety of targeted marketing campaigns to customers who use mobile banking. For example, banks could pinpoint shoppers’
physical locations to make relevant offers to their customers, such as offering them temporary line increases. In addition, banks could leverage the mobile banking interface as a real-time, tailored advertising engine by using behavioral analytics they compile to develop campaigns tailored to customers’ shopping preferences.
Additionally, banks might be able to offer their customers “smart” coupons while customers are in stores shopping for a flat-screen television or digital camera. The coupons would come from alliances banks form with the products’ manufacturers and/or retailers — and banks would receive a fee for each coupon used.
1.5.2 For customers 1.5.2.1 Convenience
Unlike Internet banking services, with which customers can only access services in locations with internet connection, Mobile banking services allow customers to perform any financial transactions anywhere with mobile connection.
With the widespread level of mobile network today, Mobile banking services can meet the needs of customers anytime, anywhere, not affected by the location and time. Therefore, only Mobile banking services can bring customers that convenience.
1.5.2.2 Time and Cost Saving
Instead of going to the bank, queuing to be served, customers perform all their transaction at one place that they want with mobile banking services. This with all transactions done at the place I want to help our customers can save huge amounts of time and travel costs to invest in the student other profits. In addition, the provision of standardized services, irrespective of the service attitude of the staff at Wet transactions, helping customers avoid psychological discomfort due to poor service attitudes - factors may lead to the decision to leave the bank.
1.5.3 For telecommunications companies
Mobile banking not only brings benefits to customers, banks, but it also benefits telecommunications companies, which cooperate with bank to adopt mobile banking services.
Due to the integration trend, in the competition war of market share, besides banks, telecommunications companies are not exceptions. Faced with difficulties and challenges, cooperation with banks to adopt mobile banking services helps telecommunications companies to increase high value added financial services for customers, which are supported with financial solutions, transaction management capacity and minimum arising risks by banks. In addition to diversification of services, telecommunications companies also benefits from the growth revenue from these services and build stronger competitive capacity. The cooperation with prestigious banks enhances the reputation and brand images for these telecommunications companies.