SWAMI VIVEKANAND COLLEGE OF ENGINEERING, INDORE SCHOOL OF MANAGEMENT

A PROJECT REPORT ON

A Comprehensive Study of Customers Preferences Towards Traditional Banking Services and Mobile Banking Services, in Indore Region

Submitted to Devi Ahilya Vishwavidyalaya, Indore for the partial fulfillment for the degree of Master of Business Administration (2009-11)

Guided by: Prof. Pallavi Sharma

Submitted by: Ankit kanugo M.B.A. IV Semester Enroll. No: D09MBA1440023 Roll No: 09170131

Declaration
I, Ankit Kanugo, hereby declare that the Project Report entitled A Comprehensive Study of Customers Preferences towards Traditional Banking Services and Mobile Banking Services, in Indore Region is an authentic work done by me under the supervision of Prof. Pallavi Sharma. The Study was undertaken as a part of the course curriculum of MBA IV Sem. (Full Time) of Swami Vivekananda College of Engineering affiliated to Devi Ahilya Vishwavidyalya, Indore. I further declare that to the best of my knowledge, this project work does not contain any part of any work which has been submitted for the award of any degree either in this university or in any other University/ Deemed University without proper citation.

Ankit Kanugo MBA (IVth Semester)

Certificate
This is to certify that the Project Report entitled A Comprehensive Study of Customers Preferences Towards Traditional Banking Services and Mobile Banking Services, in Indore Region, which is being submitted herewith for the award of the degree of Master of Business Administration of DEVI AHILYA VISHWAVIDHYALAYA, INDORE is the result of the original research work completed by Mr. Ankit Kanugo under my supervision and guidance. To the best of my knowledge and belief, the work has been duly completed and is up to the standard both in respect of contents and language for being referred to the examiner.

Signature of Supervisor (Prof. Pallavi Sharma)

Signature of the Principal/Director (seal)

Acknowledgement
I would like to thank my project guide Prof. Pallavi Sharma for guiding me through my research project. Her encouragement, time and effort are greatly appreciated I would like to dedicate this project to my parents. Without their help and constant support this project would not have been possible. I would like to thank all the respondents who offered their opinions and suggestions through the survey that was conducted by me in Indore Region. Last but not the least; I would like to thank my college Director Prof. Axay Dube and all those who supported me directly or indirectly in completing my Major research project. Ankit Kanugo M.B.A. IV Semester

TABLE OF CONTENT S .No. 1 2 3 4 5 6 7 Particulars Declaration Certificate Acknowledgement Table of Content Index of Tables Index of Graph and Picture Chapter 1 Introduction 1.1 History 1.2 Traditional banking services 1.3 Functions of Commercial Banks 1.4 Economic functions 1.5 Mobile Banking Chapter 2 Review of Literature 2.1 Excerpts from related Literature 2.2 Problem Statement 2.3 Rationale of study Chapter 3 Research methodology 3.1 Objectives 3.2 Research Design 3.3 Type of Research Study 3.4 Sample size 3.5 Tools used for data collection 3.6 Tools used for data analysis Chapter 4 Data Analysis and Interpretation Chapter 5 Finding and Discussion Chapter - 6 C on clu s ion and S u gges tion Chapter 7 Implication of study 7.1 Limitation of research 7.2 Direction For Future Research References Annexure Questionnaire Page. No. I II III IV V VI

10 11 12 13

14 15

Index of table S.NO

Tab-4.1 Tab-4 .2 Tab-4.3 Tab-4.4 Tab-4.5 Tab-4.6 Tab-4.7 Tab-4.8 Tab-4.9 Tab-4.10 Tab-4.11 Tab-4.12 Tab-4.13 Tab-4.14 Tab-4.15 Tab-9.1 Target Respondents Awareness of Mobile Banking Availability of Mobile Banking Services Availability of instrument/ medium Future scope of mobile banking services Facility from bank to customer Usage of Mobile Banking Convenience to use technology Security factor in Mobile Banking Usage of Traditional Banking Service mostly use in Traditional Banking Services Telephonic use in Banking by respondents Use of ATM by respondents Use of internet banking by respondents Use of mobile banking for trading and shopping Failure bank list

Table

Page No.

Index of Graphs and Pictures S.NO

Graph-4.1 Graph-4 .2 Graph-4.3 Graph-4.4 Graph-4.5 Graph-4.6 Graph-4.7 Graph 4.8 Graph-4.9 Graph-4.10 Graph-4.11 Graph-4.12 Graph-4.13 Graph-4.14 Graph-4.15 Pic-9.1

Graphs and pictures

Target Respondents Awareness of Mobile Banking Availability of Mobile Banking Services Availability of instrument/ medium Future scope of mobile banking services Facility from bank to customer Usage of Mobile Banking Convenience to use technology Security factor in Mobile Banking Usage of Traditional Banking Service mostly use in Traditional Banking Services Telephonic use in Banking by respondents Use of ATM by respondents Use of internet banking by respondents Use of mobile banking for trading and shopping Mobile Banking Process

Page No.

Chapter 1
1. Introduction

1. Introduction
This research report is on topic A comprehensive study of customers preferences towards traditional banking services and mobile Banking Services, in Indore region. This research study shows the factor influencing customer preference towards banking services.To explore the opportunities and challenges present for banking sector. Banking is a system of trading in money which involved safeguarding deposits and making funds available for borrowers. Traditional banking services means the old way or process of the banking services which is fallowed from several years. It means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, and order. The terms mobile banking refer Collectively to a set of applications that enable people to use their mobile telephones to manipulate their bank accounts, store value in an account linked to their handsets, transfer funds, or even access credit or insurance products. Limitation of Internet Banking, as it reduces the customer requirement to just a mobile phone. Mobile usage has seen an explosive growth in Indian economy. The main reason that Mobile Banking scores over Internet Banking is that it enables Anywhere Anytime Banking'. Customers don't need access to a computer terminal to access their bank accounts, now the can do so on-the-go Internet Banking helped give the customer's anytime access to their banks. Customer's could check out their account details, get their bank statements, perform transactions like transferring money to other accounts and pay their bills sitting in the comfort of their homes and offices. However the biggest limitation of Internet banking is the requirement of a PC with an Internet connection, not a big obstacle if we look at the US and the European countries, but definitely a big barrier if we consider most of the developing countries of Asia like India. Mobile banking addresses this fundamental while waiting for the bus to work, traveling or when they are waiting for their orders to come through in a restaurant.

1.1 History
Banking in India originated in the last decades of the 18th century. The first banks were The General Bank of India, which started in 1786, and Bank of Hindustan, which started in 1790; both are now defunct. The oldest bank in existence in India is the State Bank of India, which originated in the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of Madras, all three of which were established under charters from the British East India Company. For many years the Presidency banks acted as quasi-central banks, as did their successors. The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's independence, became the State Bank of India. The Reserve Bank of India, India's central banking authority, was nationalized on January 1, 1949 under the terms of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948 (RBI, 2005b). In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Puducherry, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center. The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India. During the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for Indian banking. The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to war-related economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the table (appendix 1).

1.2 Traditional Banking Services

Retail

Wholesale
Business loan Cheque account Credit card Home loan Insurance advisor Mutual fund Personal loan Savings account

Capital raising (Equity / Debt / Hybrids) Mezzanine finance Project finance Revolving credit Risk management (FX, interest rates, commodities, derivatives) Term loan

1.3 Functions of Commercial Banks The functions of commercial banks are divided into two categories: 1.7.1 Primary functions, and 1.7.2 Secondary functions including agency functions.

1.3.1 Primary functions The primary functions of a commercial bank include:

a) Accepting deposits; and b) Granting loans and advances. a) Accepting deposits The most important activity of a commercial bank is to mobilize deposits from the public. People who have surplus income and savings find it convenient to deposit the amounts with banks. Depending upon the nature of deposits, funds deposited with bank also earn interest. Thus, deposits with the bank grow along with the interest earned. If the rate of interest is higher, public are motivated to deposit more funds with the bank. There is also safety of funds deposited with the bank. b) Grant of loans and advances The second important function of a commercial bank is to grant loans and advances. Such loans and advances are given to members of the public and to the business community at a higher rate of interest than allowed by banks on various deposit accounts. The rate of interest charged on loans and advances varies depending upon the purpose, period and the mode of repayment. The difference between the rate of interest allowed on deposits and the rate charged on the Loans is the main source of a banks income.

1.3.2 Secondary functions

Besides the primary functions of accepting deposits and lending money, banks perform a number of other functions which are called secondary functions. These are as follows a) Issuing letters of credit, travellers cheques, circular notes etc. b) Undertaking safe custody of valuables, important documents, and securities by providing safe deposit vaults or lockers. c) Providing customers with facilities of foreign exchange. d) Transferring money from one place to another; and from one branch to another branch of the bank. e) Standing guarantee on behalf of its customers, for making payments for purchase of goods, machinery, vehicles etc. f) Collecting and supplying business information. g) Issuing demand drafts and pay orders. h) Providing reports on the credit worthiness of customers.

1.4 Economic functions

The economic functions of banks include: 1. Issue of money, in the form of banknotes and current accounts subject to cheque or payment at the customer's order. These claims on banks can act as money because they are negotiable or repayable on demand, and hence valued at par. They are effectively transferable by mere delivery, in the case of banknotes, or by drawing a cheque that the payee may bank or cash. 2. Netting and settlement of payments banks act as both collection and paying agents for customers, participating in interbank clearing and settlement systems to collect, present, be presented with, and pay payment instruments. This enables banks to economies on reserves held for settlement of payments, since inward and outward payments offset each other. It also enables the offsetting of payment flows between geographical areas, reducing the cost of settlement between them. 3. Credit intermediation banks borrow and lend back-to-back on their own account as middle men. 4. Credit quality improvement banks lend money to ordinary commercial and personal borrowers (ordinary credit quality), but are high quality borrowers. The improvement comes from diversification of the bank's assets and capital which provides a buffer to absorb losses without defaulting on its obligations. However, banknotes and deposits are generally unsecured; if the bank gets into difficulty and pledges assets as security, to rise the funding it needs to continue to operate, this puts the note holders and depositors in an economically subordinated position. 5. Maturity transformation banks borrow more on demand debt and short term debt, but provide more long term loans. In other words, they borrow short and lend long. With a stronger credit quality than most other borrowers, banks can do this by aggregating issues and redemptions, maintaining reserves of cash, investing in marketable securities that can be readily converted to cash if needed, and raising replacement funding as needed from various sources (e.g. wholesale cash markets and securities markets).

1.5 Mobile Banking

Mobile banking (also known as M-Banking, mbanking, SMS Banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant (PDA). The earliest mobile banking services were offered over SMS. With the introduction of the first primitive smart phones with WAP support enabling the use of the mobile web in 1999, the first European banks started to offer mobile banking on this platform to their customer Mobile banking has until recently (2011) most often been performed via SMS or the Mobile Web. Apple's initial success with iPhone and the rapid growth of phones based on Google's Android (operating system) have led to increasing use of special client programs, called apps, downloaded to the mobile device 1.5.1 A mobile banking conceptual model In one academic model, mobile banking is defined as: Mobile Banking refers to provision and availment of banking- and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information." According to the model Mobile Banking can be said to consist of three inter-related concepts:

Mobile Accounting Mobile Brokerage Mobile Financial Information Services

1.5.2 Trends in mobile banking

The advent of the Internet has enabled new ways to conduct banking business, resulting in the creation of new institutions, such as online banks, online brokers and wealth managers. Such institutions still account for a tiny percentage of the industry. Over the last few years, the mobile and wireless market has been one of the fastest growing markets in the world and it is still growing at a rapid pace. According to the GSM Association and Ovum, the number of mobile subscribers exceeded 2 billion in September 2005, and now (2009) exceeds 2.5 billion (of which more than 2 billion are GSM). According to a study by financial consultancy Celent, 35% of online banking households will be using mobile banking by 2010, up from less than 1% today. Upwards of 70% of bank center call volume is projected to come from mobile phones. Mobile banking will eventually allow users to make payments at the physical point of sale. "Mobile contactless payments will make up 10% of the contactless market by 2010.Another study from 2010 by Berg Insight forecasts that the number of mobile banking users in the US will grow from 12 million in 2009 to 86 million in 2015. The same study also predicts that the European market will grow from 7 million mobile banking users in 2009 to 115 million users in 2015. Many believe that mobile users have just started to fully utilize the data capabilities in their mobile phones. In Asian countries like India, China, Bangladesh, Indonesia and Philippines, where mobile infrastructure is comparatively better than the fixed-line infrastructure, and in European countries, where mobile phone penetration is very high (at least 80% of consumers use a mobile phone), mobile banking is likely to appeal even more.

1.5.3 Mobile Banking Services

Mobile banking can offer services such as the following: a.) Account Information 1. Mini-statements and checking of account history 2. Alerts on account activity or passing of set thresholds 3. Monitoring of term deposits 4. Access to loan statements 5. Access to card statements 6. Mutual funds / equity statements 7. Insurance policy management 8. Pension plan management 9. Status on cheque, stop payment on cheque 10. Ordering cheque books 11. Balance checking in the account 12. Recent transactions 13. Due date of payment (functionality for stop, change and deleting of payments) 14. PIN provision, Change of PIN and reminder over the Internet 15. Blocking of (lost, stolen) cards

b.)

Payments, Deposits, Withdrawals, and Transfers

1. Domestic and international fund transfers 2. Micro-payment handling 3. Mobile recharging 4. Commercial payment processing 5. Bill payment processing 6. Peer to Peer payments 7. Withdrawal at banking agent 8. Deposit at banking agent

A specific sequence of SMS messages will enable the system to verify if the client has sufficient funds in his or her wallet and authorize a deposit or withdrawal transaction at the agent. When depositing money, the merchant receives cash and the system credits the client's bank account or mobile wallet. In the same way the client can also withdraw money at the merchant: through exchanging sms to provide authorization, the merchant hands the client cash and debits the merchant's account. c.)Investments 1. Portfolio management services 2. Real-time stock quotes 3. Personalized alerts and notifications on security prices

d.)

Others

1. Status of requests for credit, including mortgage approval, and insurance coverage. 2. Check (cheque) book and card requests. 3. Exchange of data messages and email, including complaint submission and tracking. 4. ATM Location. 1.5.4 Process of mobile banking services The process of mobile banking is of XMS Mobile Banking Solutions which provide mobile banking setup to various banks in different country is shown in appendix 2.

Chapter 2
Review of Literature
2.1 Excerpts from related Literature 2.2 Problem Statement

2.3 Rationale of Study

2.1 Excerpts from related Literature Jonathan Donner (2008) This paper calls attention to this gap in the research Literature, emphasizing the need for research focusing on the context(s) of m-banking/mpayments use. Presenting illustrative data from exploratory work with small enterprises in urban India, it argues that contextual research is a critical input to effective adoption or impact Research. The paper identifies three crosscutting themes from the broader literatureamplification vs. change, simultaneous causality, and a multidimensional definition of trusteach of which can offer increased theoretical clarity to future research on m-banking/m-payments systems. Rajnish Tiwari, Stephan Buse (January 2006) an empirical survey of customer acceptance conducted within the frame of our research clearly reveals a major, growing interest in Mobile Banking. However, since the degree of interest and the willingness to pay vary for individual services, it seems to be necessary to design specific services taking the needs and wishes of relevant target groups into consideration. Banks ought to therefore employ mobile channels with a clear business-focus. This paper examines the opportunities for banks to generate revenues by offering value-added, Innovative mobile financial services while retaining and even extending their base of technology-savvy customers.

Rasheda Sultana(2009) A study states the biggest share of mobile payment users will be in the Asia/Pacific region by 2012(Gartner, 2008). In the context of being the most promising ICT market and the largest inbound remittance receiver2, this region is expected to be the hub of mbanking transactions. The paper starts with an overview of existing models of m-banking and then examines the m-banking regulations in some South Asian. Michael Klein, Colin Mayer (2011) Mobile banking is growing at a remarkable speed around the world. In the process it is creating considerable uncertainty about the appropriate regulatory response to this newly emerging service. This paper sets out a framework for considering the design of regulation of mobile banking . Since it lies at the interface between financial services and telecoms, mobile banking also raises competition policy and interoperability issues that are discussed in the paper.

F.I. Anyasi and P.A. Otubu (August 29, 2009) This paper outlined vividly the use of mobile phone in the banking industry, its economic implications, and in general a systematic look into the various forms of mobile banking with emphasis on the security measures that makes the whole process safe for adoption . The emergence of mobile banking technology systems has implications for the general discussions about mobile telephony in the developing world. Existing theory about the significance of mobile communications in the developing world has focused on voice and text messaging. More so, the emergence of mobile banking also underscores how, occasionally, innovations emerge from unexpected places and have the capability of reconfiguring the significance of a technology to its users, offering a way to lower the costs of moving money from place to place and opening a way to bring more users into contact with formal financial systems. Supathanish Termsnguanwong (2010) in a modernization epoch, strategic marketing management and marketing information technology plays a major role in shaping industries all over the world. Apparently, banks depend on information technology in conducting their businesses and spend huge amounts of money on such technology to reduce operation costs and gain competitive advantage over their rivals by offering customers better services through ATMs machines, telephone banking internet banking and more obviously in the last decade the mobile

banking. This study have found that a significant number of customers are either not aware of the mobile banking services or do not trust the mobile banking as a channel to conduct their banking transactions, and have found that customers may adapt the mobile banking technology only if they perceive the technology to be useful. This research paper examines customers' discernment of using mobile banking in Northern Region of Thailand. The paper can be a very useful reference for the banking industry to improve the level of mobile banking services

R. K. Uppal (6 January, 2010) In present day banking, total automation of banking operations is an imperative need for all banks to attract more customers, provide efficient services, and survive in the emerging new competition, apart from the profit motive which is the primary objective of the business. In order to achieve these goals of business, various channels have been developed through technology. Mobile banking is one of the best alternative channels available to customers for quick, correct and efficient service at anytime and anywhere. The present paper is devoted to explore the extent of mobile banking in Indian banking industry where cell phone users are increasing at unexpected rate. Time period taken for study is 2000 2001 to 2006 - 2007 because this period is the eye-witness of infant condition of IT and during the same period IT became mature. Simple statistical tools like average, standard deviation, coefficient of variation are used to calculate the efficiency of various bank groups providing the service of M-banking. On the basis of analysis, the paper concludes that the private sector banks are on the top in providing the M-banking services to their customers and have high profitability as compared to other bank groups under study except foreign banks. The paper also highlights the benefits of M-banking to customers as well as to bankers and suggests some strategies with their possible solutions like to spread awareness regarding M-banking and to increase its area and scope to enhance M-banking services in India, particularly in rural and semi-urban areas.

Indrani Medhi, Aishwarya Ratan, Kentaro Toyama(2009) Due to the increasing penetration of mobile phones even in poor communities, mobile-phone-enabled banking (m-banking) services are being increasingly targeted at the unbanked to bring formal financial services to the poor. Research in understanding actual usage and adoption by this target population, though, is sparse. There appear to be a number of issues which prevent low-income, low-literate populations from meaningfully adopting and using existing m-banking services. This paper examines variations across countries in adoption and usage of existing m-banking services by low-literate, low-income individuals and possible factors responsible for the same. It is observed that variations are along several parameters: household type, services adopted, pace of uptake, frequency of usage, and ease of use. Each of these observations is followed by a set of explanatory factors that mediate adoption and usage.

2.2 Problem Statement

While keeping below points in the consideration, this research has been done. i. What will be the preference of the customer toward the mobile banking services. ii. What is the process of mobile banking services. iii. What are advantages of mobile banking services. iv. What are different services which can be use by mobile banking.

2.3 Rationale of study

Information technology and mobile has brought vast change in the working of banks. They have made work more easy made time saving then the traditional banking. In Indore also many nationalized and private bank such as SBI, ICICI, ING are providing mobile banking services. A Research on mobile banking is being prepared in attempts to interpret in-depth study of concept of banking services in Indore. This research will help us to understand various terminologies in the mobile banking services. This research will suggest the alternatives of

banking services in the Indore city and preference of customer towards traditional banking services and mobile banking services

Chapter 3
Research Methodology

3.1 3.2 3.3 3.4 3.5 3.6

Objectives Research Design Type of Research Study Sample Size Tools used for Data Collection Tools used for Data Analysis

3.1 OBJECTIVES OF RESEARCH

3.1.1 Primary objective
Main objective is to study theThe Preference of customer toward traditional baking services and mobile banking services in Indore region 3.1.2 Secondary objective a) To understand the advantage of mobile banking b) To analyze the working and process of mobile banking c) To analyze how the mobile banking is different from traditional banking d) To known Customers preference toward mobile banking services then the traditional banking services.

3.2 Research Design

The objective of the problem to be studied. The nature of the problem to be studied. The availability of time and money for the research work. The skills of the researcher.

3.3 Type of research study

Under this research descriptive research study is used.

3.4 Sample size100 for primary data

3.5 Tools used for Data collection

3.5.1 Primary source - Primary Data is collected with the help of research tool like questionnaires from the individuals and consumers. 3.5.2 Secondary source - Secondary data is collected from the various bank and financial institution magazines, journals, and books which are related to mobile banking. Sampling will be simple random sampling

3.6Tools use for data analysisGraphs, Charts, bar chats, Pie charts, Percentage Analysis

Chapter 4
Data Analysis and Interpretation

4 Data Analysis and Interpretation

1.

Do you have a bank account?

Yes No

100 0 Tab-4.1

Target Respondents

Graph -4.1 Interpretation: The data was collected from those respondents who has there bank account or customers of different banks of Indore city because such respondent only can tell about there preference among the traditional banking services and mobile banking services. The respondents where having bank accounts in nationalized banks, private banks and co operative banks.

2. Did you known about mobile banking services?

Yes No

91% 9%

Tab-4.2

Awareness of Mobile Banking Target Respondents

Graph 4.2

Interpretation: The above bar graph shows that most of the people of Indore city know about the mobile banking services. We can also say that banks of Indore city have successfully given the information about mobile banking services through advertisement of various schemes so that 91% of respondents were aware about the mobile banking services.

3. Did your bank provide mobile banking services?

Yes No

91% 9% Tab-4.3

Availability of Mobile Banking Services

Graph-4.3

Interpretations:

For this question the 91% of the respondents bank are providing the mobile bank services. Which also tell us that most of the banks are providing mobile banking services or cutomers are looking for such bank which provide mobile banking services and with the refrence of question no. 2 results. we can also say that customer of banks which provide mobile banking services has knowledge of mobile banking services and other cutomers whose banks does not provide mobile banking services dont have knowledge of mobile banking services.

4. Did you have GPRS/3G support mobile phone? Yes No 75% 25%

Tab-4.4

Availability of instrument/ medium TargeRespondents

Graph-4.4

Interpretations:

Yes No

89% 11%

To use mobile banking services person should have GPRS/ 3G suppotrs mobile phone, they enable mobile phone to use internet and banking application from the mobile. It was found that 75% of respondets were having such kind of mobile phones. So accordingy to todays situation only 75% of pepole can only use the mobile banking services and if customer want to use the mobile banking services then they have to turn to GPRS/ 3G mobile phone otherwise they will only gets updates and alerts message on the name of mobile banking services.

5. Are you looking to use mobile banking services in future?

Tab-4.5

Future scope of mobile banking services

Yes No

89% 11%

Graph-5

Interpretations: While doing survey it was found that 89% respondets are looking to use the mobile banking services in future. Which also shows that in future use of mobile banking services can be increase. and 11% of respondents dont want to use mobile banking services in future reason may be be because of not available of proper facility or lack of knowledge. 6. Did you get mobile SMS updates and alerts from your bank?

Tab-4.6

Facility from bank to customer

Graph-4.6

Interpretation:

As per survey it was found that 87% of respondents get the mobile SMS updates and alerts from their bank. And 13% of respondents do not receive any SMS from their banks. This means that banks of Indore city also looking to provide fast services like balance enquiry without going to bank or ATM and to increase use of mobile banking services by the customers.

7. Did you have browse internet banking from your mobile phone?

Yes No

55% 45%

Tab-4.7

Usage of Mobile Banking

Graph-4.7

Interpretation:

55% of respondents has use internet banking or has done banking through internet it may be for balance enquiry, online trading etc. and 45% of the respondents has not use internet banking it may be because of lack of infrastructure and lack of knowledge. It is possibility that respondent which are using internet banking services may also use the mobile banking services.

8. Do you feel more convenience to use mobile banking services then the traditional banking services?

Yes No

80% 20% Tab-4.8

Convenience to use technology

Graph-4.8

Interpretation:

80% of respondents feel that its convenience to use mobile banking service than the traditional banking services, as mobile banking services save time and travelling cost of the customer. On other hand 20% do not feel mobile banking services convenience than the traditional banking services. It may be because of lack of mobile banking knowledge.

9. Is security is the factor for using traditional banking?

Yes No

80% 20% Tab-4.9

Security factor in Mobile Banking

Graph-4.9

Interpretation:

While survey it was found that 61% of the respondents feel security is the reason for not using mobile banking services as compare to traditional banking services. Respondent feel that their money may not be in safe hand while using mobile banking services. On other hand 39% do not agree with this point.

10. How frequently do you visit your bank branch per month?

Never Respondent 20%

1 to 4 times 57%

5 to 8 times 15%

9 to 12 times 3%

over 12 times 5% Tab-4.10

Usage of Traditional Banking

Graph-4.10

Interpretation:

The survey shows that 20%of respondents never visit their bank. 57% respondents visit their bank one to four times, 15% of respondents visit their bank five to eight times, only 3% of respondents visit bank nine to twelve times and only 5% of respondents visit their bank more than twelve times. Which also shows that 80 % of the respondent have to visit bank for several activates or for traditional banking services. 11. What is the main reason that you typically visit your bank branch (please choose the single most important reason)

Make a deposit Respondent 57%

Investment advice 6%

Balance inquiry 5%

Cash withdrawal 10%

Other 22% Tab-4.11

Service mostly use in Traditional Banking Services

Graph-4.11

Interpretation:

The main reason to visit the bank is to deposit money in the bank has been found during the survey.57%of the respondents visit bank for this reason. This proves that other activities of the bank like balance inquiry, cash withdrawal outside the bank branch it may possible by mobile banking services, ATM and net banking. And other 22%of respondent visit bank for other reason which can be for building healthy relations with bank, use of locker facility etc. on other hand 5% and 10% respondents like to visit bank for balance inquiry and withdrawal of money respectively. 12. How frequently do you use telephone banking services per month (for example, balance Inquiry, fund transfer between accounts)?

Never Respondent 46%

1 to 4 times 40%

5 to 8 times 7%

9 to 12 times 4%

over 12 times 3% Tab-4.12

Telephonic use in Banking by respondents

Graph-4.12

Interpretation:

It was found that 46% of the respondents dont use the facility of telephonic banking services. Which also show that respondents do not like telephonic services. And 40 % of respondents use he telephonic services for 1 to 4 times in month it may be for the general inquiry with the bank representative. 13. How frequently do you use an Automated Teller Machine (ATM) per month?

Never Respondent 6%

1 to 4 times 32%

5 to 8 times 22%

9 to 12 times 13%

over 12 times 27% Tab-4.13

Use of ATM by respondents

Graph-4.13

Interpretation:

It was found that 94% of the respondents use the Automated Teller Machine (ATM) to withdrawal of money. It may be because that not only in Indore city but in whole county person requires the hard cash for trading in local market. Only 6% of respondent do no use the ATM.

14. Approximately how many times have you purchased any product through the Internet in the last 12 months?

Never

1 to 4 times

5 to 8 times

9 to 12 times

over 12 times

Respondent

55%

36%

9%

0%

0% Tab-4.14

Use of internet banking by respondents

Graph-4.14

Interpretation:

The result of above question state that the user of doing internet trading or purchasing product through internet banking is less than the non user of online trading or purchasing. 55% of

responded has never purchase product through internet. And 45% of the respondents have purchase the product through internet.

15. Approximately how many times have you purchased any product through the mobile banking in the last 12 months?

Never Respondent 4.15 77%

1 to 4 times 19%

5 to 8 times 3%

9 to 12 times 1%

over 12 times 0% Tab-

Use of mobile banking for trading and shopping

Graph-4.15

Interpretation:

The above chart shows that many of the respondents have not use the mobile banking to purchase the product. 77% respondent has never used the mobile banking to purchase the product only 33 % has use to purchase the product by mobile banking. This means that respondents are only use mobile banking services for the services like balance inquiry and SMS alerts.

Chapter 5
Findings and

Discussion

5.1 Findings
In my research study I came to know about the following points. 1. Awareness of Mobile Banking People of Indore are well aware about the mobile banking services 91% of the people known about the mobile banking services and only 9% dont know about the mobile banking services.

2. Availability of Mobile banking services From the targeted respondents bank 91% banks provide mobile banking services and only 9% of the banks are not providing mobile banking services

3. Availability of instrument/ medium There were 75% of the people which use mobile which support the function of mobile banking services. 25% of the people dont have such kind of phones.

4. Future scope of mobile banking services 89% of the respondents have shown positive attitude toward using of mobile banking services and 11% of the respondents may not be using mobile banking services in future.

5. Facility from bank to customer 87% of the respondents bank provides the primary mobile banking services and 13% of the respondents bank does not provide primary mobile banking services.

6. Convenience to use technology 80% of the respondents know to use the mobile banking services and 20% of the respondents and 20% of the respondents dont know how to use mobile banking services.

7. Security factor in Mobile Banking Security factor is considered by the 61% of the respondents and 39% of the respondents does not consider it.

5.2 Discussion

This research report is on topic A comprehensive study of customers preferences towards traditional banking services and mobile Banking Services, in Indore region. Under this research descriptive research study is used. This research study shows the factor influencing customer preference towards banking services.To explore the opportunities and challenges present for banking sector. A Research on mobile banking is being prepared in attempts to interpret in-depth study of concept of banking services in Indore. This research has helped us to understand various terminologies in the mobile banking services. The research also goes under to know the process, function and products of the mobile banking services. This research has suggested the alternatives of banking services in the Indore city and preference of customer towards traditional banking services and mobile banking services. The preference of the customer was analyzed by the primary data which was collected by conducting survey, where questionnaire was filled by the hundred respondents. The target respondents are the customers of the banks in Indore. Which include the professionals, business men and students of Indore city. The data was analyzed through bar graphs and pie charts. The result of research is that the public of Indore city has adopted the mobile banking services for the primary use of banking services such as balance inquiry, cheque clearance report etc. the customers has not adopted all facilities which is provided by the mobile banks such as transfer of fund, purchase of products etc. There are many banks in Indore city which include nationalized, private and co-operative banks. With the change and upgrade in the technology in the country the banks has also match their technology with current trend. This includes the facility of mobile banking services too. The mobile or cell phone has become very important gadget in the life of people of Indore city. The mobile phone has been used for the various other than communication such as for social networking site, Emails and banking also. In Indore city many banks are providing mobile banking services and they are looking as the most emerging technology in the banking sector. Every bank which is providing the mobile banking services are spending lots of money in the advertising of the mobile banking services. We can see lots of television advertisement, outdoor advertisement in the Indore city. And the

result is that most of the prospect customers are well known about the mobile banking services. Whenever person goes to bank to open a new bank account with the cheque book, ATM card, Pass book customers also get the id to us the mobile banking services. The use of mobile banking will helps bank to reduce the cost like cost infrastructure, paper work cost etc. The busy schedule of the public of Indore city, the use of mobile banking services is increasing day by day. People are not only having time to visit bank but they also dont have time to login there account on their net banking account in PC and laptops. Mobile banking services also proved as the very economy services as compare to internet bank services. As internet banking require internet connection. It is costly then the cost of SMS of mobile phone. And few services are provided free in mobile banking services such as message alert for the balance inquiry, payment clearance and deposits information. The customer has shown the positive attitude or perception towards the mobile banking services

Chapter 6
Conclusion and Suggestions

6.1 Conclusion
While doing the research it was found that there is a need for providing better and cost-efficient banking services to masses. The mobile phone has emerged as a medium for solving this problem. There exists not much difference in the basic mobile banking services offered by various banks. A careful analysis of the mobile phone application of the various banks revealed that the design of the process, technological up gradation, security features, consumer friendliness, and value-added services varies from bank to bank. There is a lot of emphasis on the concern for security by all the banks. They have taken steps to educate the customers regarding security. The customers look for ease in performing banking transactions along with more and updated information when adopting mobile banking services. Those banks whose policies and websites are complex will face a setback. Customers do not use all services equally. The users weight different reasons before choosing a particular mobile banking service. Users of mobile banking give more importance to traditional bank account for depositing the money in the bank. Lack of time is one of the prime reasons for using mobile banking services. There is a greater concern for security among the non-users and need to introduce such security measures which are valued more by the customers, such as high security password on mobile, tips on the website, and automatic lock out on multiple incorrect password entry. There is a need to assuage the concern for security among non-users by increasing the strength and number of security features offered by the banks.

6.2 Suggestions

People should grab the new opportunity in the banking services. It will help people to save their time and will make banking easy for them.

Customer or people should ask to their bank about the uses and methodology to use the mobile banking services.

People of Indore city should be more computer and mobile literate to use the mobile banking services.

People should have GPRS or 3G support mobile to use Mobile banking services.

People have to understand that mobile is not only for the communication purpose but mobile is the multipurpose device and mobile banking services are the one of the feature of the mobile.

Banks should run the campaign to make people aware more about mobile banking services and make their customer mobile banking literate.

Banks have to make mobile banking services process more effective and safe so that customer feel confidence while using mobile banking services.

Banks should add feature like withdrawal ATM address which will help us customer to locate their ATM card if they have lost or if their ATM card is stolen.

Chapter 7

Implementation of Study
7.1 Limitation of the research 7.2 Direction of future research

7.1 Limitation of the research

Due to limitation of time and cost constrains a sample size of respondents in only 100.

Data Analysis and interpretation done may not be that strong due to small sample and Convenience Sampling Method.

The sample extent for research is only Indore City.

Some of the respondents may be biased in giving responses.

My inexperience in research area might have affected results.

The figure use in the research is the present data and it can be changed with time.

7.2 Direction of future research :This research will help to banks as well as customers also. In respect of banks they can improve their mobile banking services more efficiently. So that they can avail more customers for mobile banking and in respect of customers internet facilities offered by banks and usage of internet facilities.

The research is limited to Indore region. It can be further expanded to state level. Only 100 samples were used in this research. The sample size can be increased to at least 500 samples for more accurate and generalized result.

The research related to scope of mobile banking adoption in Indore city can use for future purpose. Since internet mobile is demanding among customers so that they can fulfill their immediate requirement for any legitimate purpose, so a scope of mobile banking is necessary so that can choose their facilities as according to their purpose and requirement

Chapter 8
References

References
1. Customers' discernment of mobile banking business by Supathanish

Termsnguanwong, DBA, 2010 2. New Research Reveals Untapped Market for Mobile Banking Among Offline Consumers, Syniverse Technologies, 2009 3. Mobile Banking and Financial Inclusion, Michael Klein, Colin Mayer, May 2011 4. Mobile-Banking Adoption and Usage by Low-Literate, Low-Income Users in the Developing World, Indrani Medhi, Aishwarya Ratan, Kentaro Toyama. 2009 5. Mobile Banking Notifications and Transactions, Eric Lim , Anurana Saluja(Nov 2005) 6. Emerging issues and strategies to enhance M-banking services, R. K. Uppal, (Feb 2010) 7. Mobile banking and economic development: Linking adoption, impact, and use, Jonathan Donner (2008) 8. Mobile banking: Overview of Regulatory framework in emerging markets, Rasheda Sultana (2009) 9. Mobile Banking As Business Strategy: Impact Of Mobile Technologies On Customer Behaviour And Its Implications For Banks, Rajnish Tiwari, Stephan Buse, Cornelius Herstatt (January 2006) 10. Mobile Banking For Inclusive Growth, Pratima Trivedi (March 2010) 11. Mobile Phone Technology in Banking System: Its Economic Effect F.I. Anyasi and P.A. Otubu (August 2009) 12. Innovations in Bank by Katuri Nageswara Rao 13. Telecom Technologies emerging trends by Ravi Kumar Jain B 14. IT @ Financial Services Banking Industry by Satish D 15. www.rbi.org.in

16. www.mobile.prepaidsbi.com 17. www.icicibank.com/Personal-Banking/onlineservice/mobile-banking/mobile.htm 18. www.hdfcbank.com/.../mobilebanking/mobilebanking_faqs.htm 19. www.wikipedia.org 20. www.indusind.com/indusind/wcms/en/home/.../mobile-banking 21. www.india-cellular.com/Lets-Learn/Mobile-Banking.html 22. www.bankingtech.com/bankingtech.htm 23. www.mobilepaymentsworld.com 24. www.mbanking.blogspot.com 25. www.telecompaper.com/background/mobile-banking

Chapter 9
Annexure
9.1 Appendix 1: Table 1 9.2 Appendix 2: Diagram 1 9.3 Appendix 3: Questionnaire

APPENDIX
9.1 Appendix 1

The following table shows the data of India bank failed between 1913 and 1918.

Years

Number of banks that failed

Authorized capital (Rs. Lakhs)

Paid-up Capital (Rs. Lakhs)

1913

12

274

35

1914

42

710

109

1915

11

56

1916

13

231

1917

76

25

1918

209

Tab-9.1 Failure bank list

9.2 APPENDIX 2

The following is the process of mobile banking is of XMS Mobile Banking Solutions which provide mobile banking setup to various banks in different country.

Mobile Banking Process

Pic-10.2

9.3 APPENDIX 3

Questionnaire
Dear Respondent,

We assure you that all the information that will be collected from you will remain fully confidential and it is used for study purpose only. Please mark ( ) the answer according to your opinion.

1.

Do you have a bank account? Yes No

2. Did you known about mobile banking services?

Yes

No

3. Did your bank provide mobile banking services?

Yes

No

4. Did you have GPRS/3G support mobile phone?

Yes

No

5. Are you looking to use mobile banking services in future?

Yes

No

6. Did you get mobile SMS updates and alerts from your bank?

Yes

No

7. Did you have browse internet banking from your mobile phone?

Yes

No

8. Do you feel more convenience to use mobile banking services then the traditional banking services

Yes

No

9. Is security is the factor for using traditional banking?

Yes

No

10. How frequently do you visit your bank branch per month? Never 1 to 4 times 5 to 8 times 9 to 12 times over 12 times

11. What is the main reason that you typically visit your bank branch (please choose the single most important reason)

Make a deposit

Investment advice

Balance inquiry

Cash Withdrawal

Other

12. How frequently do you use telephone banking services per month (for example, balance Inquiry, fund transfer between accounts)? Never 1 to 4 times 5 to 8 times 9 to 12 times over 12 times

13. How frequently do you use an Automated Teller Machine (ATM) per month?

Never

1 to 4 times

5 to 8 times

9 to 12 times

over 12 times

14. Approximately how many times have you purchased any product through the Internet in the last 12 months?

Never

1 to 4 times

5 to 8 times

9 to 12 times

over 12 times

15. Approximately how many times have you purchased any product through the mobile banking in the last 12 months?

Never

1 to 4 times

5 to 8 times

9 to 12 times

over 12 times

Name:

Age:

Occupation:

Thank you