A STUDY ON CUSTOMER AWARENESS, OPINION, REASONS FOR OPTING MOBILE BANKING

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1 218 A STUDY ON CUSTOMER AWARENESS, OPINION, REASONS FOR OPTING MOBILE BANKING DR. (MRS.) N. YESODHA DEVI*; MRS. J. NANCY SEBASTINA**; DR. (MRS.) V. S. KANCHANA*** *Principal, PSGR Krishnammal College for Women, Coimbatore. **Ph.D Research Scholar, Department of Commerce,PSGR Krishnammal College for Women, Coimbatore. ***Assistant Professor, Department of Corporate Secretaryship, Government Arts College for Women, Krishnagri. ABSTRACT This study is carried on to find out the customers awareness about Mobile banking, their opinion regarding the problems faced and the reason for opting this technology in spite of other technologies. The study is based on primary data collected from 249 respondents by means of a questionnaire. Random Sampling Technique was applied and Statistical tools like Percentage Analysis, ANOVA and T-test, Kendall s Coefficient of Concordance was carried out in order to reveal the results of the study. INTRODUCTION With mobile technology banks can offer a wide range of service to their customers such as doing fund transfer while traveling, receiving online updates of stock price or even performing stock trading while being stuck in traffic. According to the German mobile operator mobile com, mobile banking will be the killer application for the next generation of mobile banking. Mobile devices especially smart phones are the most promising way to reach the masses and to create stickiness among current customers due to their ability to provide services anytime, anywhere, high rate of penetration and potential to grow. According to Gartner, shipment of smart phones is growing fast and had taped 20 million units in 2006 alone. The future of mobile commerce appears to be bright with strong hints of increasing comfort lend with mobile banking among American consumers. Here are some statistics on the subject released by mobile marketing association. 92% of American adult consumers own a mobile phone % of this population has performed a bank transaction via mobile phone. Most popular channels: 1. Mobile internet access 11% 2. SMS : 8%

2 Mobile App: 5.5% In terms of the evolution of services being offered on mobile applications, South Korea is showing the way. The big push came when LG Telecom Ltd., the smallest of Korea s three mobile service providers teamed up with the Kookmin bank to launch the bank on service. Under this scheme mobile users were able to use smart chips embedded in cell phones for accessing all the transaction and enquiry based services. The chip-based service automated the authentication of users when they access their bank s financial services to make the whole process much faster and convenient. The icing on the cake came with the ability of these chip enabled cell phones to be used simultaneously as cash cards. By October 4 th, there were already about 1,00,000 infrared readers adapted to take payment directly from mobile phone hand sets in Korea users can now use their cell phones to pay for everything, from restaurant bills, travel tickets, merchandise and even haircuts. The proliferation of the 3G ( third generation of wireless) and widespread implementation expected for will generate the development of more sophisticated services such as multimedia links to M-commerce services. TYPES OF M-BANKING Technically speaking most of these services can be deployed using more than one channel. Presently, mobile banking is being deployed using mobile applications developed on one of the following five channels. 1. IVR (Interactive Voice Response) 2. SMS- (Short messaging service) 3. WAP (Wireless Access protocol) 4. Standalone Mobile Application 5. Fast net Mobile banking. POTENTIAL OF MOBILE BANKING IN INDIA Even as we were marveling at the way internet changed our life style, the increasing popularity of the mobile phone (the number of tele com subscribers in India has crossed the 500 million mark as on September 30, 2009) and developments in mobile technology brought before the potential of this ubiquitous instrument as a tool for conduct of business including electronic money transfer and the terms mobile banking and MC acquired popularity. Recognizing the importance 56 this mode, the RBI issued guidelines for mobile banking transaction in October The guidelines permit banks to provide mobile banking transaction and mandates that all transaction has to originate from one bank account and terminate in another bank account. M-commerce (MC or MB) is an area that is rapidly changing the way people conduct financial transaction. While e-commerce has skipped the majority of the population due

3 220 to the cost of setting up such channels, M-commerce has the potential to be more inclusive due to the widespread use of MPs. As on December 2009, one year has lapsed since the insurance of the guidelines by the RBI. Thirty two banks have been given approval to provide Mobile banking facility in India of these, 21 have started providing these services. ICICI bank maintains its position as the country s biggest private lender on mobile screen as well with million users. HDFC accounts for second most subscribers with 9.1 million subscribes followed by SBI with 6.13 million subscribes. But transaction volumes are still very low. Here are some of the issues started by the banks for low uptake of mobile banking facilities. 1. The requirement of end to end encryption makes implementation costly. They feel low ticket transactions do not require end to end encryption. 2. The transaction limits of Rs.5000 and Rs needs to be revised upwards. Banks point out that these limits do not permit transaction, like airline ticket purchase. 3. Facilitation of mobile banking require tie-ups with individual services providers for enabling such services banks face difficulties in entering into such partnerships. 4. MSPs do not open up channels for facilitating mobile banking services by banks. They should open up USSD (Unstructured supplementary services data) channel for mobile banking and enabling the accessing of mobile banking facilities through all GPRS connections. RBI is examining these issues. The convenience of the mobile phone as an instrument for conducting of financial transaction and its immense potential in the process of financial inclusion and financial growth is well recognized. However, the extent and manner in which m-commerce should be facilitated needs a cautions and a well considered approach keeping in view the concerns on money laundering and financial terrorism and the stability of payment and settlement system. REVIEW OF LITERATURE 1. The study titled The Mobile Commerce Prospects : A Strategic Analysis of Opportunities in the German Banking Sectors (2006) 1 done by Dr.Stephan Buse and Rajnish Tiwari examined the viability of mobile financial services on both national and international level. Empirical surveys of more than 450 potential customers and over 50 banks world wide revealed that Mobile banking has gained increasing acceptance amongst various sections of the society in previous years. The reason for this growth can be traced back to technological and demographical developments that have influenced many aspects of the socio-cultural behavior in today s world. The study comes to the conclusion that mobile banking presents a sizable opportunity for banks to retain their existing, technology-savvy customer base by offering valueadded innovative services and to attract new customers from corresponding sections of the society. The customer survey provides evidence that such sections in the meanwhile include the affluent and financially relevant groups of the society. They seem to be ripe to convert this nonnegligible customer interest into business- driving customers demand. A proactive attitude on the part of the banks seems to be therefore recommendable.

4 Mobile banking users and non-users behavior study (2008) 2 done by Piya Baptista. This study involves a comparative study of m-banking user s and non user s behaviors in five countries, with particular focus on the BOP market, in order to draw general conclusions that will benefit a broad m-banking audience globally. The study will work with both MNOs and FIs to reach users and non-users. Simply put, users are expected to be individuals who are currently availing of m-banking services, mainly under additive models, while non-users are individuals who own a mobile phone but do not have bank account. 3. Measuring the Post- Adoption customer perception of Mobile banking services done by Tai-Kuei Yu and Kwoting Fang(2009) 3. With liberalization and internationalization in the financial market and progress in information technology, banks face dual competitive pressures to provide service quality and administrative efficiency. That these recent developments are fueled by technology might misleadingly suggest that the adoption of mobile banking is largely based on technological criteria. The purpose of this study is to establish a better measurement model for post adoption user perception of mobile banking services. Based on 458 valid responses of mobile banking users, the result shows that the instrument, consisting of 21 items and 6 factors, is a reliable, valid and useful measurement for assessing the post adoption perception of mobile banking. 4. Mobile Banking: Where's the Business Case? done by Hoffman, Karen Epper (2007) 4, At mid-2007, at least nine U.S. banks had begun to develop or had rolled out a mobile banking service to their customers, either through a proprietary mobile Internet banking site or via an application embedded into the handset. Proponents believe cell phone banking will grow quickly based on ubiquitous cell phone usage and consumers' growing expectation of anywhere/anytime access. Yet, with banks providing the service to customers for free and carriers clamoring for a piece of the action, a business case remains elusive. Banks say they will justify the investment based on strengthening customer relationships, lowering delivery channel costs and paving the way for more sophisticated mobile financial services in future years. 5. Stimulators of Mobile banking adoption in India done by Hundal.B.S & Abhay Jain(2005) 5, analyzed the forces that stimulate mobile banking service adoption in Northern India. The study made an attempt to identify various stimulators, viz exhilarator, ease and inquisitiveness, development pace, compatibility and perceived risk regarding the adoption of mobile banking services. The study found that the customers feel more comfortable with mobile banking and are likely to adopt it because mobile banking service facilitate customers to access their bank accounts from any location, at anytime of the day and it provide tremendous advantage, comfort and convenience to users. The author concluded that despite all the possibilities offered by the new electronic channels for banking services, there are various psychological and behavioral issues which appear to influence the acceptance of mobile banking and these need to be understood.

5 222 OBJECTIVES 1. To identify the reasons for preferring phone/ mobile banking. 2. To identify the awareness of phone/ mobile banking services and how frequently it is used by the respondents. 3. To find out the opinion of the respondents regarding the various problems of phone / mobile banking. METHODOLOGY The study is based on primary data collected from 249 respondents by means of a questionnaire. Random Sampling Technique was applied and Statistical tools like Percentage Analysis, ANOVA and T-test, Kendall s Coefficient of Concordance was carried out. The findings are given in the following paragraphs ANALYSIS AND INTERPRETATION PERSONAL INFORMATION Age Gender Education Marital status Occupation No. % Up to 25 yrs yrs yrs yrs Above 55 yrs Male Female School level Graduate PG Professional Married Unmarried Student Housewife Self-employed

6 223 Employed Retired persons No income Below Rs Monthly income Above mem Family size 5-6 mem Above 6 mem Family type Joint family Nuclear family TOTAL It is inferred from the table personal information that out of the total respondents taken for the study, 36.1 % of the respondents are in the age group of upto 25 yrs and 21.3 % of the respondents are in the age group of yrs % of the respondents are male and 30.1 % of the respondents are female. Out of the total respondents taken for the study 52.6% of the respondents are graduate and 37.3% of the respondents are post graduate.. When marital status is concerned 56.6% of the respondents are married and 43.4% are unmarried and 50.2% of the respondents occupational status is employed. 39% of the respondents belong to the monthly income and 25.7% of them belong to below as their income level and 72.7% of the respondents belong to the family size of 2-4 members 77.9% of the respondents belong to the nuclear family and 22.1% of the respondents belong to joint family. BANK RELATED INFORMATION No. % Public Bank in which you have account Private Both No. of years 5 yrs or below

7 224 Source of awareness 5-10 yrs yrs Above 15 yrs Friends & relatives Bank officials Agents Advts Others TOTAL It is inferred from table bank related information that out of the total respondents taken for the study, 40.6% of the respondents have their bank account in public sector banks, 53% of the respondents have their bank account less than 5 years, 47% of the respondents get to know about banks through advertisements. REASONS FOR ADOPTING PHONE / MOBILE BANKING FACILITY Mean Rank Saving of time 2.75 No need to visit the bank 3.38 Customer friendly 2.45 Convenience 2.72 Safety & Security 3.69 Kendall s Coefficient of Concordance Kendall's W.106

8 225 From the mean ranks it is seen that customer friendly gets the fore most priority, followed by convenience, saving of time, no need to visit the bank and the least for safety and security. Kendall s coefficient of concordance (W) was used to find whether there is similarity among the respondents in the order of assigning the ranks. Kendall s W indicates the extent of similarity among the respondents. Higher the value of W more will be the similarity. Kendall s (W) ranges between 0-1. From the above table it is seen that the W is which shows that there is low similarity among the respondents in assigning the ranks. FREQUENCY OF USAGE OF PHONE / MOBILE BANKING No. Percent Everyday Once in a week Once in a fortnight When required Total It is inferred from table Phone / Mobile banking frequency of usage that out of the total respondents taken for the study, 59% of the respondents use Phone / Mobile banking when required, 22.1% of the respondents use once in fortnight, 14.9% use once in a week and 4% use Phone / Mobile banking everyday. It is concluded that 59% of the respondents use Phone / Mobile banking whenever they require. AWARENESS AND USAGE OF PHONE / MOBILE BANKING AND AGE Awareness score on Phone/Mobile Banking usage Mean S.D No. Up to 25 yrs yrs Age yrs yrs Above 55 yrs TOTAL

9 226 ANOVA FOR AWARENESS SCORE ON PHONE/MOBILE BANKING USAGE Sum of Squares Df Mean Square F Sig. Between Groups ** Within Groups Total HYPOTHESIS There is no significant difference among the age group in the average awareness score on Phone / Mobile banking usage. Result: The ANOVA result shows that the calculated F- ratio value is is higher than the table value of at 1% level of significance. Since the calculated value is higher than the table value it is inferred that there is significant difference among the age groups in the average awareness score on Phone / Mobile banking usage. Hence the Hypothesis is rejected. Gender AWARENESS AND USAGE OF PHONE / MOBILE BANKING AND GENDER Awareness score on Phone/Mobile Banking usage Mean S.D No. Male Female TOTAL T-TEST FOR EQUALITY OF MEANS t df Sig *

10 227 HYPOTHESIS There is no significant difference between the male and female in the average awareness score on Phone / Mobile banking usage. Result: The calculated t-test value is which higher than the table value of at 5% level of significance. Since the calculated value is higher than the table value it is inferred that there is significant difference between male and female in the average awareness score on Phone / Mobile banking usage. Hence the Hypothesis is rejected. AWARENESS AND USAGE OF PHONE/ MOBILE BANKING AND EDUCATION Education Awareness score on Phone/Mobile Banking usage Mean S.D No. School level Graduate PG Professional TOTAL ANOVA FOR AWARENESS SCORE ON PHONE/MOBILE BANKING USAGE Sum of Squares Df Mean Square F Sig. Between Groups Ns Within Groups Total HYPOTHES There is no significant difference among the education group in the average awareness score on Phone / Mobile banking usage. Result: The ANOVA result shows that the calculated F- ratio value is which is less than the table value of at 5% level of significance. Since the calculated value is less than the table value it is inferred that there is no significant difference among the education groups in the average awareness score on Phone / Mobile banking usage. Hence the Hypothesis is accepted.

11 228 AWARENESS AND USAGE OF PHONE / MOBILE BANKING AND MARITAL STATUS Marital status Awareness score on Phone/Mobile Banking usage Mean S.D No. Married Unmarried TOTAL T-TEST FOR EQUALITY OF MEANS t df Sig ** HYPOTHESIS There is no significant difference between the married and unmarried in the average awareness score on Phone / Mobile banking usage. Result: The calculated t-test value is which higher than the table value of at 1% level of significance. Since the calculated value is higher than the table value it is inferred that there is significant difference between married and unmarried in the average awareness score on Phone / Mobile banking usage. Hence the Hypothesis is rejected. AWARENESS AND USAGE OF PHONE/MOBILE BANKING AND OCCUPATION Awareness score on Phone/Mobile Banking usage Mean S.D No. Student Housewife Occupation Self-employed Employed Retired persons TOTAL

12 229 ANOVA FOR AWARENESS SCORE ON PHONE/MOBILE BANKING USAGE Sum of Squares df Mean Square F Sig. Between Groups ** Within Groups Total HYPOTHESIS There is no significant difference among the occupation group in the average awareness score on Phone / Mobile banking usage. Result: The ANOVA result shows that the calculated F- ratio value is which is higher than the table value of at 1% level of significance. Since the calculated value is higher than the table value it is inferred that there is significant difference among the occupation groups in the average awareness score on Phone / Mobile usage. Hence the Hypothesis is rejected. AWARENESS AND USAGE OF PHONE / MOBILE BANKING AND MONTHLY INCOME Awareness score on Phone/Mobile Banking usage Mean S.D No. No income Below Rs Monthly income Above TOTAL

13 230 ANOVA FOR AWARENESS SCORE ON PHONE/MOBILE BANKING USAGE Sum of Squares df Mean Square F Sig. Between Groups Ns Within Groups Total HYPOTHESIS There is no significant difference among the monthly income group in the average awareness score on Phone / Mobile banking usage. Result: The ANOVA result shows that the calculated F- ratio value is which is less than the table value of at 5% level of significance. Since the calculated value is less than the table value it is inferred that there is no significant difference among the monthly income groups in the average awareness score on Phone / Mobile banking usage. Hence the Hypothesis is accepted. AWARENESS AND USAGE OF PHONE / MOBILE BANKING AND BANK ACCCOUNT Bank in which you have account Awareness score on Phone/Mobile Banking usage Mean S.D No. Public Private Both TOTAL ANOVA FOR AWARENESS SCORE ON PHONE/MOBILE BANKING USAGE Sum of Squares df Mean Square F Sig. Between Groups Ns Within Groups Total

14 231 HYPOTHESIS There is no significant difference among the bank account and average awareness score on Phone / Mobile banking usage. Result: The ANOVA result shows that the calculated F- ratio value is which is less than the table value of at 5% level of significance. Since the calculated value is less than the table value it is inferred that there is no significant difference among the bank account and average awareness score on Phone / Mobile banking usage. Hence the Hypothesis is accepted. PHONE / MOBILE BANKING PROBLEM SCORE AND BANK ACCOUNT Phone/Mobile Banking Problem score Bank in which you have account N Mean Std. Deviation Std. Error Mean Public Private T-TEST FOR EQUALITY OF MEANS t df Sig Ns HYPOTHESIS There is no significant difference between the public and private bank in the average problem score of phone / mobile banking. Result: The calculated t-test value is which less than the table value of at 5% level of significance. Since the calculated value is less than the table value it is inferred that there is no significant difference between public and private bank in the average problem score of internet banking. Hence the Hypothesis is accepted.

15 232 FREQUENCY OF USING PHONE / MOBILE BANKING AND PHONE / MOBILE BANKING PROBLEM SCORE Phone/mobile banking frequency. of using Phone/Mobile Banking Problem score Mean S.D No. Everyday Once in a week Once in a fortnight When required TOTAL ANOVA FOR PHONE/MOBILE BANKING PROBLEM SCORE Sum of Squares df Mean Square F Sig. Between Groups ** Within Groups Total HYPOTHESIS There is no significant difference among frequency of using Phone / mobile banking group in the average problem score of phone / mobile banking. Result: The ANOVA result shows that the calculated F- ratio value is which is higher than the table value of at 1% level of significance. Since the calculated value is higher than the table value it is inferred that there is significant difference among frequency of using Phone / mobile banking groups in the average problem score of phone / mobile banking. Hence the Hypothesis is rejected. SUGGESTIONS 1. The awareness about Phone/ Mobile banking has to be given before or once the technology is launched. 2. The merits and demerits of this technology should be revealed.

16 Proper security services should be provided because that is the main reason for not adopting this technology. 4. Processing should be still simplified. 5. Usefulness of Phone / Mobile banking should be taught to customers. CONCLUSION This paper explores the result as majority of the respondents use Phone / Mobile banking whenever they require. Further it is concluded that there is no significant difference among the education groups in the average awareness score on Phone / Mobile banking usage, there is no significant difference among the monthly income groups in the average awareness score on Phone / Mobile banking usage, there is no significant difference among the bank account and average awareness score on Phone / Mobile banking usage, there is no significant difference between public and private bank in the average problem score of internet banking. Hence the Hypothesis is accepted in all these cases. Hence in further the researcher can also conduct studies with larger samples to get relative importance in each dimension. REFERENCE 1. The Mobile Commerce Prospects : A Strategic Analysis of Opportunities in the German Banking Sectors (2006) by Dr.Stephan Buse and Rajnish Tiwari. 2. Mobile banking users and non-users behaviour study,by Piya Baptista, May 28, Measuring the Post- Adoption customer perception of Mobile banking services done by Tai-Kuei Yu and Kwoting Fang ( Cyber Psycology & Behaviour), Vol.12 Issue.1,(2009). 4. Mobile Banking: Where's the Business Case? done by Hoffman, Karen Epper (2007), Banking Strategies; Sep/Oct2007, Vol. 83 Issue 5, p Stimulators of Mobile banking adoption in India done by Hundal.B.S & Abhay Jain(2005), ICFAI journal of service marketing, vol.3,no.4, dec,pp MonaDave(2006), mobile banking, retrieved on jan 12, 2010 web: 7. Deputy Governor, RBI, potential of mobile banking in India, Edited excepts of speech delivered at India telecom 2009, conference at New Delhi on dec 4, published in business line, dec 19, 2009, vol.16, No.349.