China India Insights Program
Mobile Banking in India: Barriers and Adoption Triggers
K. Sudhir Mukesh Pandey Ishani Tewari
August 2012
This research was made possible by a grant from the Citi Foundation Contents Executive Summary ...... iii Introduction and Background ...... 1 Indian banking and cellular market ...... 1 Banking and Mobile Phones: A Potentially Happy Indian Marriage ...... 3 Mobile Banking in India today ...... 5 Technological and regulatory factors impacting future growth ...... 6 Mobile Banking in India: Barriers and Adoption Triggers ...... 9 Study Objective and Design ...... 9 How does the Indian consumer bank? ...... 10 Issues faced in traditional banking ...... 12 Awareness and adoption patterns for mobile banking ...... 14 Sources of awareness ...... 14 Triggers for adoption ...... 15 Barriers to adoption ...... 16 Who is using mobile banking today? ...... 19 Frequency and patterns of use among mobile banking users ...... 21 Types of tasks by SEC and over tenure of use ...... 22 Post‐adoption changes in traditional branch banking habits ...... 2 4 Who will be the future users of mobile banking in India? ...... 24 Likelihood of usage among current non‐users ...... 24 Future: Drawing from lower socio‐economic strata ...... 25 Conclusion ...... 27 Appendix 1: Some mobile banking models in developing countries ...... 29 Appendix 2: Survey Questionnaire ...... 30 Recruiting Questionnaire ...... 30 Screener ...... 34 Detailed Questionnaire ...... 60 Section 1 –Overall Banking Information ...... 60 Section 2 –Usage of Internet banking ...... 66 Section 3 –Usage of Mobile Banking ...... 68 Section 4: Expected Usage among Respondents aware (but non‐users) of Mobile Banking ...... 73 Section 5‐ Mobile phone usage ...... 76 Section 6‐PC/Internet usage ...... 79 Section 7‐Demographics ...... 82
Executive Summary Globally, mobile banking services have become a popular method to conduct financial transactions. India’s mobile banking sector is in a nascent stage and poised for rapid growth. To better understand this sector, this report presents findings from a survey conducted in April and May 2012 across five Indian cities. Respondents in socio‐economic classification (SEC) A1‐2 and B1‐2 were asked an array of questions on banking habits, adoption and use of mobile banking and cellular phone usage. Key findings of the survey include: There is considerable dissatisfaction with traditional modes of banking 82% of respondents complain that travel time is the top pervasive problem Mobile banking is more popular than branch banking in several categories: 58% of customers deposit and transfer via mobile vs. 44% at the branch. Less than 30% of respondents use Internet banking for any task.
Television and word‐of mouth are the most popular sources of awareness for mobile banking 62% of m‐banking users and 50% of non‐users heard about mobile banking from family, friends of colleagues. Less than 10% of respondents heard directly from their banks about mobile bank offerings.
Comfort and convenience is a top trigger for adopting mobile banking 88% of mobile banking users cited the comfort and accessibility of their phone as the top reason for adoption. Checking and viewing bank balances is first and most common task Experienced users use m‐banking 50% more weekly than new users and perform more sophisticated tasks. 37% of SEC A1/A2 respondents use m‐banking compared to 23% of B1/B2 respondents.
Technology problems biggest barriers to adoption and use Incompatible cellphone and mobile network problems top hurdle for 70% of non‐ adopters SEC A respondents are relatively more concerned about security and customer support issues, SEC B face more technological and awareness problems
Third generation cellular technology and smartphones boost adoption and use 41% of 3G user also use mobile banking vs. 30% of 2G users 49% of smartphone owners do m‐banking while 0% of those with basic phone do Users and non‐users of mobile banking look much more similar once technology is accounted for.
Mobile banking users are highly satisfied with experience 94% of m‐banking users say physical visits to the bank have been reduced since adoption. 90% of users would recommend use to family and friends. 1
Introduction and Background Mobile banking (m‐banking) has emerged as a popular mode of banking in many developed and developing countries. In India, there are approximately 12 million mobile banking users and this figure is expected to grow rapidly with mobile transactions exceeding credit card transactions by the end of the decade. By some measures, there are more mobile phones in India than there are bank accounts. The combination of two factors—a large unbanked population and the ubiquity of cell phones—is a catalyst for high mobile banking adoption. To fully understand the current status and future trends in this market requires some comprehension of the general banking sector‐‐ the turf where mobiles compete with physical bank branches and computers. Also, knowledge of cellular phone penetration is needed to get a sense of who mobile banking services will reach. The following pages provide a brief background on these topics and some information on the structure and services in the mobile banking sector.
Indian banking and cellular market Banking modes available to the Indian customer There are 80 commercial banks in India, operating around 77,000 branches and with over 1 million employees. The sector is mainly composed of public, private and foreign banks. In addition, there is also a vast network of rural banks and credit institutions. But despite such a sprawling network of institutions and much push from the government for financial inclusion, more than 70% of India’s population remains outside the formal banking sector. In recent years, technology has expanded channels through which consumers can interact with their financial institutions, providing not only easier access to the existing base, but also facilitating penetration of financial services among the population. Box 1 depicts the various banking channels available to the Indian consumer. Brick and mortar branch network: Brick and mortar branches are the foundation of India’s banking system. In India, these branches can range from complex operations with hundreds of employees in dense urban locations to one‐man, single‐room branches in rural areas. The nationalization of banks in the late 1960s and early 1980s was accompanied by government effort towards bringing more and more of the population into the banking net. Tight regulations governed the expansion of branches, with a view to increase inclusion; banks were required to open certain number of rural branches for any non‐rural branches they wanted to operate. Despite such regulations and encouragement, branches per capita remain among the lowest in emerging markets (12000 people/branch). The typical scenario inside a traditional Indian bank involves waiting in long queues even for the simplest of transactions, such as a passbook update or cash withdrawal. Automatic Teller Machines (ATMs): Innovations in banking delivery channels started with the introduction of ATMs as a self‐service delivery channel in the late 1990s. ATMs also marked the entry of anytime banking as customers could now access money from their bank accounts at a time of their convenience. As of 2012, ATMs remain the most successful delivery channel in India followed by telephone banking and internet banking. With about 75000 plus off‐branch and in‐ branch ATMs installed, banks are seeking to reach out to a large customer base at a substantially lower cost, giving them easier access and faster service. The State Bank of India and associate 2
banks own the largest number of ATMs at 25,060. They are followed by Axis Bank (6,270), ICICI Bank (6,104), HDFC Bank (5,471) and Punjab National Bank (5,050).1
Typically, a transaction, which costs Rs. 50 at a branch, costs about Rs. 15 if done through an ATM. Research shows that the number of footfalls at bank branches has fallen drastically after the installation of ATMs. In order to further reduce the cost of service delivery and revenues through ATMs, banks have started out‐sourcing and sharing of ATM services and cross‐selling other products. Some banks have already started dispensing railway tickets and movie tickets through their ATMs. In the future, a bank’s ATM may function like a kiosk delivering many more non‐cash transactions, further increasing the profitability of ATMs.
Internet Banking: Increasing interest in self‐service continued and internet usage prompted banks to introduce the concept of “anywhere banking.” Customers could now access their bank accounts, check their account details, get their bank statements, transfer money to other accounts and pay their bills from the comforts of their home or office. Internet Banking, also offered significant cost advantage to banks. A net‐based transaction costs the bank only around Rs. 4, which is much lower than even an ATM, mainly due to savings on prohibitive real estate costs as well as labor costs. 2 However, internet banking has grown slowly in India due to a combination of psychological, legal, technological and socioeconomic factors. The biggest limitation of internet banking is the requirement of a computer with an internet connection, which is not a common across Indian households. A lack of critical mass of early adopters, lack of a strong trust environment, slowness in adoption of internet, low penetration of PCs and access to internet are some of the impediments in the adoption of internet banking in India. Security issues also loom large and customers restrict usage of Internet banking to their home and office computers.
High penetration and rapid growth in the Indian cellular market : The spread of mobile phones across India is one of the most remarkable economic and technology success stories of the last 15 years. It has contributed significantly to the growth and modernization of various sectors and the overall socio‐economic development of India.
The number of mobile phone subscribers in India reached a whopping 916 million at the end of March 2012. The Indian mobile phone industry registered a consistent overall growth rate of around 45% annually in terms of subscribers. The sector, as shown in Figure 1, remains competitive with several domestic and international players vying for this growing customer base. Today, a mobile phone has become an essential part of an average Indian’s existence. This is a result of positive regulatory changes, intense competition among multiple operators, low‐priced handsets, prepaid cards, low tariffs and significant investments in telecom infrastructure. The well‐ distributed network of telecommunication services in India has resulted in widening of markets, efficient information flows, lower transaction costs and an effective substitute for infeasible physical transport.
1 Banks install 19,000 ATMs in 2010‐11 http://articles.economictimes.indiatimes.com/2011‐04‐08/news/29396871_1_atms‐npci‐national‐financial‐switch 2 Retail Banking: Challenges Ahead in Distribution Channels in Urban/Rural India, RBI Bulletin, January 2004 3
Box 1: Banking modes in India
Branch ATM Internet Mobile SMS Phone Doorstep Banking Banking Banking Banking Banking Banking Banking Physically Physically Using a Using Subscribing Transacting Having visiting bank visiting an computer to mobile for SMS over the someone for any ATM for any access the phone to alerts from phone with visit you financial financial bank’s access the the bank. the bank from the transactions transaction website bank’s Receiving helpline/ bank at or activities or activities through a website alerts in call centre your home browser to through a case of cash to carry out perform browser or withdrawal, your financial a mobile money financial transactions app to transfer, transactions perform credit/ / activity financial debit card activities transaction
Banking and Mobile Phones: A Potentially Happy Indian Marriage
Demand from the banked and unbanked Customers in India, especially urban and rural‐unbanked customers, aare searching for a delivery channel that gives them quick and efficient banking solutions. As India’s large youthful population comes of age in a rapidly growing economy, exposed to global trends and technology, there is growing momentum for personalized, speedy, anywhere‐aanytime banking services. This targett segment is accustomed to having access to information at their convenience and 24X7. Mobile banking is well‐poised to become a crucial part of this enhanced consumer banking services experience.
On the supply‐side, banks are now exploring innovative business models of banking to survive in the increasingly competitive financial services arena. They are seeking to make a strategic shift from competing merely on price to managing cost structures, by leveraging disruptive service concepts that span across multiple channels of delivery. They are also aggressively exploring alternative channels of customer acquisition, and means to enhance the service experience.
For billions of lower‐income people around the world, a mobile phone represents more than just a tool for communication. It can also become a means of exteending financial services to people without bank accounts, setting off a “virtuous circle” of benefits to individuals, families, communities and nations. Only active collaboration betweeen financial and telecom regulators, financial institutions, mobile operators and handset manufacturers will make this possible. Approximately 40% of the Indian population does not have any access to financial services. The National Sample Survey data also shows that 51.4 per cent of the nearly 89.3 million farmer households of India do not have access to any credit from iinstitutionall or non‐institutional sources. 4
Only 30 per cent of India’s migrant laborers have bank accounts.3 Traditional methods of serving the unbanked through ATMs and the banking correspondent model have achieved tepid results. Many low‐income people store and transfer money using informal networks which have high transaction costs and risk from theft and extortion. With 916 million mobile connections and 17 million being added each month, mobile handsets are an eexcellent tool to facilitate financial inclusion of the large unbanked population in India. Harnessing the power of phones to make payments and disburse loans instead of risky, labor‐intensive manual ccollection could help transform the lives of millions of needy Indians. The World Bank estimates that by y 2012, 1.7 billion people across emerging markets will have mobile phones and one in five will be adopt mobile money to create a $5 billion market by 2012. A BCG study points out tthat mobile transactions in India are expected to touch $350 billion by 2015‐‐ a fact that’s likely to provide banks, mobile network operators (MNOs), phone manufacturers and service provideers an opportunity to earn to the tune of $4.5 billion. Mobile phones as an alternative channel of delivery of banking services have been attaining greater significance. The rapid growth in users and wider coverage of mobile phone networks in India have made this channel an important platform for extendding banking services to customers.
Figure 1: Market share of mobile subscribers
Uninor MTS Aircel 5% 2% Tata 7% 9% Airtel 20%
BSNL Reliance 10% 17% IDEA Vodafone 13% Essar 17%
*Videocon, MTNL, Loop, Quadrant, Etisalat and Stel hold <.1% of share, totaling 2%
A low‐cost branchless delivery model Mobile banking uses the existing mobile communications infrastructure; thus a bank does not have to invest time, money and effort in replicating the communication infrastructure. This drastically cuts down the fixed costs of providing service to the custommers; further the marginal costs of providing services are also considerably lower with mobile phone based communications According to industry experts, mobile banking is the cheapest way to reach rural customers. While it costs $523 to $837 to set up a micro‐banking outlet, replacing this facility with mobile banking
3 National Sample Survey report www.thehindubusinessline.in/ew/20111/01/.../2011012450090300.htm Putting Money in Motion: How Much Do Migrants Pay for Domestic Transfers http://www.cab.org.in/Lists/Knowledge%20Bank/Attachments/127/Putting_Money_in_Motion.pdf 5
technologies costs only $209. The RBI reports that while the government typically incurs a transaction cost of 12‐13 per cent, mobile banking brings this cost down to 2 per cent.4 Mobile banking offers the physical proximity that other methods like branch banking and even technology‐ based channels such as the Internet or ATMs, cannot match. With mobile banking, customers now essentially carry their bank with them, truly facilitating, anytime, anywhere banking.
Banks have started offering information‐based services like balance enquiry, stop payment instruction of checks, transactions enquiry and location of the nearest ATM/branch on mobile funds. Acceptance of transfer of funds instruction for credit to beneficiaries of same/or another bank in favor of preregistered beneficiaries have also commenced in a few banks. Additionally, this new channel gives the bank ability to cross‐sell and up‐sell their other complex banking products and services such as vehicle loans or credit cards.
Since only 40 per cent of the adult population has bank accounts, whereas more than 70 per cent of adults own a mobile connection, linking banking with telecom seems to be the correct choice for India’s commercial banks. With a large mobile handset penetration, it is the obvious choice to cross the extremely low credit/debit card penetration barrier (which is below 10 per cent of the population). The high penetration levels of mobile phones and low transaction costs involved in mobile banking are likely to be the potential growth drivers for these services.
Mobile Banking in India today Mobile banking business models5 The predominant model for mobile banking in India is the bank‐led model wherein banks are the focal point of transactions and it is their brand that dominates. Mobile banking is offered to customers/depositors of the particular bank and all accounting and transfers are through the bank. A variant of this model is where telecom operators and banks partner to offer services. Examples of these are joint ventures between Airtel and Axis bank and Vodafore Essar and ICICI Bank. Often, the cellular service operator will provide a customized platform or built‐in applications to facilitate m‐ banking transactions.
Banks with mobile banking options offer services in the general categories of account information provision, payments and transfers, investments, support and content services. Table 2 provides more details on these segments. Most m‐banking/m‐payments systems in India enable users to do i) Store value (currency) in an account accessible via the handset. If the user already has a bank account, this is generally a question of linking to a bank account. If the user does not have an account, then the process creates a bank account for her or creates a pseudo bank account, held by a third party or the user’s mobile operator. ii) Convert cash in and out of the stored value account. If the account is linked to a bank account, then users can visit banks to cash‐in and cash‐out. In many cases, users can visit a corner kiosk
4Mobile Banking: Opportunities and challenges in the Indian market http://www.tele.net.in/discussion‐board/item/7732‐mobile‐banking‐opportunities‐and‐challenges‐in‐the‐indian‐ market 5 Morawczynski, O. & Miscione, G. (2008). “Exploring Trust in Mobile Banking Transactions: The Case Of M‐Pesa In Kenya,”, Social Dimensions of Information and Communication Technology Policy, pp. 287‐298 6
or grocery store and transact with an independent retailer working as an agent for the transaction system. iii) Transfer stored value between accounts. Users can generally transfer funds between accounts linked to two mobile phones, by using a set of SMS messages (or menu commands) and PIN numbers.
Technological and regulatory factors impacting future growth Information technology holds a promise to change the face of consumer banking in the next few years through the convergence of banking and telecom players. Technology will become imperative in banking for providing convenience in product delivery, increasing productivity and performance. As mobile networks in India are upgraded with WAP, GPRS and UMTS to deliver next‐generation multimedia services, banks can provide a host of services on mobile phones and will have immediate and full control over their finances. Customers will be able to view their account statement, transfer funds between accounts, get instant notifications whenever they transact. Next‐ generation mobile banking services will deliver significant improvements with user‐friendly icon driven instructions, instant access, security and immediate transaction processing all at a lower cost. Banks can also attain higher levels of customer satisfaction and increased loyalty by providing anywhere, anytime banking. They will also benefit further from lower administrative costs, fewer branches, reduced headcount, streamlined call centers and lower handling charges ‐ savings that, hopefully, will be passed onto customers. Considering the far‐reaching impact of certain technologies, we should expect to see major shifts in the banking industry unlike any we have seen before
Box 2: Mobile banking service
Account Information Mini‐statements and checking of account history Alerts on account activity or passing of set thresholds Monitoring of term deposits Access to loan statements Access to card statements Mutual funds / equity statements Insurance policy management Pension plan management
Payments & Domestic and international fund transfers Transfers Micro‐payment handling Mobile recharging Commercial payment processing Bill payment processing
Investments Portfolio management services Real‐time stock quotes Personalized alerts and notifications on security prices 7
Support Status of requests for credit, including mortgage approval, and insurance coverage Check book and card requests Exchange of data messages and email, including complaint submission and tracking
Content Services General information such as weather updates, news Loyalty‐related offers Location‐based services
Impact of launch of 3G on mobile banking services In India, the current 3G footprint is limited to the metros and urban/ semi‐urban areas. In the short run, 3G will only have an indirect impact as mobile banking services are not bandwidth intensive and, thus, do not need high‐speed connectivity. However, soon enough, 3G will be a key factor in mobile banking gaining traction. This is because it offers increased security protocols and more bandwidth for secure mobile‐based transactions. Third generation technology will also drive the uptake of smart‐phones which will enable more secure and user‐friendly interfaces for mobile banking applications. Managing the network service provider relationship By virtue of its very nature of operation, mobile banking brings a certain clash of interest with respect to ownership of end customers and revenue sharing between network service providers and financial institutions. Network service providers offer mobile services for users and often they also provide heavily subsidized handsets. Financial institutions share a relationship with the customer in terms of holding the account and credit card, owning the expertise to process transactions, and so on. Given this scenario, it is obvious that the financial institution must clearly establish the dynamics of the partnership, for business viability. Mobile banking solution providers would do well to optimize the deployment mechanism to reduce dependency on network service providers, to a viable minimum. Prudent regulation: A key factor in future growth A number of regulatory policies stymie mobile banking in India. Full‐scale commercial implementation of rural m‐banking is complex, as it requires a multitude of players, such as telecom operators, m‐banking product developers, regulators and financial institutions to envisage and coordinate delivery. In 2008, the Reserve Bank of India (RBI) laid out operating guidelines for mobile banking transactions, which include methods for banks to collaborate with telecom providers, strengthening the security framework and laying down common standards for completing transactions. The Reserve Bank of India permitted only licensed banks with a physical bank presence in India and bars non‐bank finance companies and microfinance institutions to launch mobile banking. This disqualifies mobile network operators from offering their own service. Services were restricted to customers of banks and holders of debit/credit cards issued as per RBI guidelines. 8
The RBI has taken a step forward by removing the Rs 50,000 transaction limit through mobile phones with a view to allow customers to transfer bigger amounts. However lenders may place per transaction limits based on their own risk perception with the approval of their boards. RBI has also allowed banks to appoint for‐profit banking correspondents (BC), including telecom operators and limits relating to having the BC within a fixed distance of the bank have also been relaxed. The regulation on mobile banking is moving in the right direction but the RBI should look at lowering the entry cost. For example, the Know‐Your‐Customer (KYC) norms6 applicable to telecom companies rather than banking KYC rules should be adequate for opening an account. It is expensive for operators to comply with these regulations especially when customer volumes have not stabilized. A few more enabling regulations largely centered on unifying account opening and controls between operators and bank will lower cost and increase viability. Increased viability will ensure faster scale‐up and proliferation of services. The regulator should define the extent to which mobile operators can substitute or replicate services that banks traditionally offer. The RBI has been reluctant to allow non‐banking players like telecom operators to carry out banking operations and requires such services to be offered in partnership with the existing national banks.. These issues need to be addressed on the policy and regulation front. Financial inclusion reforms should also provide norms for mobile banking for the rural population. Stringent security norms and a framework for preventing fraud are needed to change the perceived insecurity of mobile banking transactions. The RBI has in the last few years, taken positive steps towards facilitating inter‐ operability among banks for mobile payment through the interbank mobile payment. However, a more integrated approach and framework for mobile banking is the need of the hour. The RBI still has some way to go in terms of facilitating the mobile ecosystem for growth with an integrated framework. Policy‐makers and regulators face two‐fold challenges regarding M‐banking: first, to encourage banks and mobile operators to develop solutions that are not proprietary and second, to allow access to potential new entrants who may disrupt the lucrative business models of the banks and mobile operators. The key challenge is to do this while at the same time ensuring high levels of security and trust. It is important that mobile banking is not seen as a turf war between the financial and telecommunication sectors but as something, that complements existing financial services.
6 KYC rules require that banks require a system of document‐based registration and the mandatory physical presence of the customer to open accounts 9
Mobile Banking in India: Barriers and Adoption Triggers Mobile banking has grown at a blistering pace in across many developing and developed countries around the world. In India relative to a very high mobile penetration rate, the use of mobile banking (m‐banking) services remains low. However, with new cellular technology as a catalyst, m‐banking looks well‐poised to draw in millions of new users, who tired with the lumbering brick and mortar banking facilities, seek time‐saving and easily accessible alternative banking modes.
Study Objective and Design This report presents facts and analysis on the banking habits, awareness, adoption and usage patterns among m‐banking users and non‐users. It identifies factors that will drive on‐the‐ground success of mobile banking in India. To do so, we collect data on the barriers limiting adoption of mobile banking amongst non‐users and also the triggers that led to adoption among current users. We surveyed 1614 respondents during April and May 2012 across five different geographically dispersed cities of India Delhi, Mumbai, Lucknow, Indore and Kochi.7 The initial screening only selected respondents who were aware of mobile banking but may or may not have actually adopted the service.8 Classified on the basis of socio‐economic class (SEC), the respondents were drawn from classes A1, A2, B1 and B2 on this 12‐grade scale which is based on education and number of consumer durables owned. In India, these four SEC represent 11.8% of the general population and 25% of the urban population. 9 32% of the respondents were users of mobile banking. Detailed information was collected on a variety of subjects—banks patronized and banking habits, types of financial transactions conducted, advantages and disadvantage of mobile banking, cellular usage and demographic features.
Table 1: Sample distribution across cities
Delhi Indore Kochi Lucknow Mumbai Total Non User of M‐ banking, Account with a 102 101 100 102 102 507 Private Sector Bank Non User of M‐ banking, Account with a 119 122 105 113 139 598 Public Sector Bank User of M‐ banking, Account with a 52 50 57 50 52 261 Private Sector Bank User of M‐ banking, Account with a Public 48 50 50 50 50 248 Sector Bank Total 321 323 312 315 343 1614
7 Delhi and Mumbai are classified as “Tier 1” cities and Kochi, Lucknow and Indore are classified as “Tier 2” cities. Tier 1 cities have a population of over 4 million while Tier 2 cities population is 1 million to 4 million. 8 Consumers were initially surveyed on the street briefly. Out of these respondents, only those consumers who were aware of M‐Banking were later interviewed face‐to‐face in the CAPI (Computer‐assisted personal interviewing) center. The interview work was fully controlled and any possibility of leaving out questions was eliminated. 9 This system is developed by the Media Research Users Council (MRUC) and the Market Research Society of India (MRSI). 10
How does the Indian consumer bank? As in the case of any consumer decision, the adoption and use of mobile banking depends heavily on how attractive the alternative product is. For Indians with access to formal banking (the segment of the population represented in this survey) brick and mortar branches are the traditional mode of conducting banking transactions. We asked respondents, who all have accounts in either public (49%) or private banks (51%), about their use and satisfaction with these services.
Most consumers physically visited a branch bank once a month or less. The most widely performed branch banking activities revolve around viewing balances and transfer/depositing money. In the preceding three months, 86% of users had transferred and deposited money and 82% had checked their balance. A distant third was tasks paying insurance premiums (20%). There is much less activity in more sophisticated tasks such as investing in shares (10%), credit card transaction (6%) or mutual fund activity (4%).
Table 2: Banking activities
M‐Banking non – Activities done in last 3 months All Users M ‐ Banking users users
Base: 1614 509 1105
Payment of Bills 53% 38% Transfer/deposit money 86% 86% 85% Check/ View account balance 82% 90% 78% Pay insurance premium 20% 26% 17% Monitoring Deposits/ Fixed/ RDs 7% 7% 7% Invest in share market 6% 7% 5% Request cheque book 15% 17% 13% View Mini Statements 15% 18% 13% View Loan statements 8% 10% 6% View Credit Card Statements 10% 10% 10% Invest in MFs 4% 6% 3% Stop payment on cheques 8% 11% 7% Functionality to stop, change and delete payments / 4% 6% 3% ECS Linking account for Auto Debit PIN provision 7% 11% 5% Updating passbook 17% 12% 19%
There is some heterogeneity by SEC in the types of banking activities done at the physical branch, more well‐off and educated classes (SEC A) with presumably more advanced financial knowledge, more resources and higher potential returns tend to do more complex financial transactions like investing in share or mutual funds and credit card activity. However, the biggest difference across 11
classes emerges on the dimension of how these transactions take place. As Figure 2 shows, the majority individuals in upper classes deposit or transfer money by some other medium rather than physically visiting a branch. This proportion decreases as we go down the SEC scale.
Figure 2: Physical branch as top mode for deposits/transfers
0.70
0.60
0.50
0.40
0.30 respondents
% 0.20
0.10
0.00 SEC A1 SEC A2 SEC B1 SEC B2
This picture, which could be replicated for a variety of other bank services, shows that more educated and well‐off individuals are finding convenience in non‐traditional banking modes like ATM, internet, mobile or phone banking. Although not explicitly defined in the survey, many of the higher classes reported using “Other” modes which most likely means they are using domestic help or assistants to conduct banking activity. Even though bank branches are located more conveniently for affluent households, their opportunity cost of time is also incentivizing them to avoid crowded and time‐consuming bank branches.
Interestingly, the data also shows that internet or “net” banking has not caught on. Less than 25% of customers use online services for banking. In many service categories, there is evidence of a “leapfrogging” effect. Consumers are skipping over an intermediate banking mode such as internet or phone banking and adopting the latest technology i.e. mobile banking. For example, amongst those with access to mobile banking, 47% use branch banking for paying bills, 25% use internet banking and 40% use m‐banking.
12
Figure3 Modes of banking for different tasks
Branch ATM Net Mobile Phone Other
Payment of Bills 47% 16% 28% 40% 1% 6%
Transfer/deposit money 44% 29% 27% 58% 1% 4%
Check/ View a/c balance 25% 60% 22% 66% 1% 3%
Pay insurance premium 32% 13% 31% 40% 3% 10%
Monitoring Deposits/ Fixed/ RDs 30% 22% 16% 16% 0 22%
Invest in share market 8% 8% 17% 36% 6% 31%
Request cheque book 44% 30% 3% 34% 2% 14%
View Mini Statements 24% 50% 21% 47% 3% 10%
View Loan statements 30% 23% 2% 25% 2% 30%
View Credit Card Statements 49% 24% 14% 16% 4% 16%
Invest in MFs 22% 22% 13% 34% 0% 22%
Stop payment on cheques 37% 7% 17% 54% 6% 15%
Functionality to stop, change and 23% 19% 10% 35% 3% 29% delete payments / ECS
PIN provision 18% 45% 20% 45% 4% 13%
Passbook Update 93% 0 0 0 0 7
Issues faced in traditional banking The movement away from brick and mortar banking is not surprising as there is considerable dissatisfaction with traditional banking along several dimensions. Respondents complained about the amount of time and energy they had to expend to merely commute to their bank. Most consumers also complained about inordinate delays and harassment faced inside the bank. Usually this physical branch banking involves waiting in serpentine queues and moving from one counter to another to get even basic tasks accomplished.
13
Figure 3: Problems with traditional banking
Time wasted travelling 82
Move from one counter to another one 73
Long queues 73
Unable to locate a bank branch while traveling 75
Inconvenient branch locations 71
Not accessible 24*7 72
Poor service 64
Unhelpful bank employees 63
Inadequate knowledge of the staff 63
Errors in recording transactions 63
No customised services 61
Cheque clearance not reflected on the same day 66
Poor bank infrastructure 56
Better services at other banks 54
Unreliable in past 50 Visiting a bank physically is time‐consuming and consumers said they are forced to defer other important work to travel to a bank. In fact, more than 50% of the consumers ranked it as one of their top three problems. Almost one of every three banking users needs to travel more than 2 kilometers to reach out to its nearest bank branch, with an average time of 17‐18 minutes. This problem is marginally better in Tier 1 cities where average distances and travel times to bank branches are shorter, but it remains daunting. Moreover, since lower SECs tend to live farther on average from bank branches on average these problems are magnified for them. The opportunity cost of time may be lower for lower SECs so that waiting in a queue is relatively less expensive for a small shopkeeper than a high powered executive. But on net, the sluggish Indian banking infrastructure inordinately burdens even lower middle class (SEC B) banking customers. Respondents with account in private banks (both domestic and foreign) tend to be less displeased with their banking experience in terms of customer service and delays that those with accounts in public sector institutions. Also, note that the differences may be higher that the numbers show because customers of the respective types of banks are not similar i.e. private bank customers tend to be more demanding as well. But the latter do better on the locational front, which is not surprising as public sector banks often have the pick of choice locations available at subsidized rates. Overall, however, the figures suggest that banks in India have not lived up the expectations of their customers. 14
Figure 3: % respondents in strong agreement
Hold account in Hold account public sector in private
bank sector bank “I end up wasting a lot of 82% 86% time travelling to bank” “I have to move from one counter to another to get 69% 65% work done” “Bank employees/front desk executives at the 56% 54% bank are not willing to help me”
It is important to keep in mind that problems of access and service exist on an even larger scale for lower SECs (classifications C‐E) who are not included in the survey. Branches per capita in India still remain among the lowest in the world and basic access remains a pervasive problem. In spite of a big push by the government towards financial inclusion, less than 80% of the population has access to formal sector lending representing fertile grounds for mobile banking to make inroads.
Awareness and adoption patterns for mobile banking Sources of awareness By survey design, all respondents in the survey were aware of mobile banking. Television and word‐of‐mouth and internet are the top sources for awareness overall. Word‐of‐mouth is particularly effective for users.
Figure 4: Sources of awareness for mobile banking
62 Friends/ family/ Colleagues using the service 50 60 Television 62 55 Internet 33 53 At the Bank branch 48 41 Newspapers/ Magazines /Other Print ads 39 28 Through the Mobile Service provider 22 13 Direct mailers 11 9 Call from a bank 4 M‐Banking User M‐Banking Non‐User
15
More and more consumers rely on advice from friends, family and even strangers to make purchase decisions in technology enabled banking services category especially M‐banking. The survey reinforced what almost every businessperson knows, the best lead or referral is often the one that comes straight from the mouth—a satisfied customer’s mouth, that is. A surprising fact given that India has a bank‐led model for mobile banking, banks are not a more prominent source of awareness. Only 5% of people heard about m‐banking services through their bank. Additionally, mobile providers are not prominent source of information (23%). As we will see below when discussing barriers to adoption, even though everyone in the survey is aware that banking through a mobile device is possible, under‐awareness is the pressing problem. Potential users often do not realize the extent to which m‐banking can make banking more efficient and low cost. In these embryonic stages of growth, banks and mobile providers must drive awareness about their products. The finding that word‐of‐mouth and peer use is so important to awareness implies that reaching a critical mass of users will be vital to propelling m‐banking forward. This fact also points to low SEC groups, where adoption may be much below the critical threshold, as an important target for marketers.
Triggers for adoption When asked what attracted them to the service, the comfort and convenience of using their cell phone emerged as the top reason for most users. As discussed earlier, cell phones have made deep in‐roads among the Indian population. All segments of individuals and households have one and are adept at using it. The idea of doing basic banking on such a familiar device is the immediate attraction of mobile banking. The figure below shows these various triggers for adoption. 16
Figure 5: Triggers for adoption
88 I can do banking anytime/ anywhere
88 Banking through the mobile saves a lot of time
Using a mobile for banking makes banking hassle free 85 and effortless
84 Mobile banking has a user friendly interface
Ability to conduct financial transactions of even 84 smaller denominations
Consistent service experience, as human intervention 84 is less
I started using Mobile Banking as most of my friends 83 and colleagues were also using it
83 I take keen interest in newer technologies
It involves lower cost as compared to the traditional 83 and older modes of banking
80
As we see above, most respondents familiarity and comfort with their cellular device is impetus for venturing into new applications such as m‐banking. Top ranking given to several banking categories such as “Using a mobile for banking makes banking hassle‐free and effortless,” “I can do banking anytime/anywhere (24/7 banking),” and “Banking through the mobile saves a lot of time” also underscore the time and energy saving advantages that m‐banking presents over traditional banking. On the other the low ranking of certain categories like “mobile banking has a user‐friendly interface” and “ability to conduct financial transactions” highlight certain areas, specifically improving user‐technologies and catering to smaller customers, that m‐banking providers must better to get more traction in the Indian context. The idea that having the right cell phone is a key factor behind adoption is reinforced if we look at the barriers rather than triggers to adoption.
Barriers to adoption Overall, we can classify the hurdles that respondents stated as reasons for not using mobile phones to four major categories‐‐ lack of awareness, technology problems, security concerns and support issues. Box 3 categorizes the specific statements evaluated in the survey under these four broad areas.
17
Box 3: Major categories of barriers to mobile banking adoption
Awareness Technology Security Support
“Not many people I know “Mobile phone needs to “Anyone can misuse my “There is no human currently use m‐banking” be compatible for m‐ detaills in case I lose mmy interface or service “I currently don’t have banking operations” mobile” executive that you can the need” contact with questions” “Not as popular as net “At times there is no “Possibility of errors in banking” mobile network” m‐banking higher than “Lacck of “It is expensive to use in Internet banking” acknowledgement of mobile for these “Data transmission is the transaction at activities” too slow on the mobile” “M‐banking is not a safe times” “Don’t know much about” and secure mode to do financial transactionns” “M‐banking services not versatile enough” “M‐banking is too complicated to use”
Figure 6 shows the percentage of non‐user respondents that ranked aa certain issue as their top reason in not adopting. Technology issues i.e. “at times there is no mobile network available” and “mobile phone needs to be compatible for mobile banking operations” are the biggest hurdles to adoption. Various support issues and need for more customer support come in second. 18
Figure 6: Respondents who rank security (top) or mobile coverage (bottom) as #1 barrier to mobile banking
31
47
SEC A SEC B
148 164
SEC A SEC B
The data also shows that different SECs attributed different weights to different categories. Although technology is the top concern for everyone, it carried more importance for SEC B. The same holds for awareness as lower SECs were less likely to have peerss using mobile banking and they were also knew less about the services and advantages mobile banking had to odder. On the other hand, SEC A respondents expressed more worry about security as well as getting appropriate customer support. These findings convey that to ensure wide adoption and proliferation of mobile banking, banks and telecom operators must not adopt a one‐size‐fits‐all approach in targeting potential users but address heterogeneous concerns.
The results also suggest that trust and security are a sort of luxury good; faced with poor traditional banking alternatives, lower SECs are more willing to use any form of banking that enables them to gain access to financial services. Higher SECs who have reasonable financial services are more concerned about security issues. However, this does not mean over the long‐term banks need not worry about security and trust issues. As consumers enroll in these services, they are likely to be more demanding and also be concerned about security. But from an immediate adoption perspective, it might be easier to enroll and expand financial inclusion through mobile banking among lower SECs cost‐effectively.
19
Figure 6: Barriers to adoption
Incompatible phone 70 No mobile network at times 67 Not many people I know use 67 No human interface or service executive 66 No need 65 Internet banking more popular 63 Lack of acknowledgement in receiving transaction 62 Expensive to use mobile for this 61 Fear of losing phone and data 59 Don't know much about m‐banking or how to use 59 Data transmission slow on mobile 58 Services not versatile enough 58 High possibility of errors 56 Too complicated to use 55 Not secure and safe 54
Who is using mobile banking today? Mobile banking adopters tend to be relatively young, between the ages of 26‐35 years. Since the survey was conducted in urban areas, illiteracy or only primary education was not common. Levels of some college education were roughly the same among both users and non‐users, but m‐banking users tended to have more higher education and non‐users tended to have higher fraction of those with only secondary education. More students were m‐banking users as were working professionally. Finally, mobile banking users belong to the high socio‐economic grades (A1 and A2).
20
Figure 7: Characteristics of users and non‐users
M‐Banking Users M‐Banking Non Users
Base 509 1105 Age 18‐25Years 44% 48% 26‐35yeas 40% 36% 36‐45 years 16% 14% 46‐55 years ‐ 3% Educational Status School 5 to 9 Years ‐ 1% SSC \ HSC 6% 14% Some College but not Graduate 20% 19% Graduate \ Post Graduate : General 59% 58% Graduate \ Post Graduate : Professional 15% 8% Occupational Status Student 25% 30% Working Professionals 34% 29% Businessman 24% 24% Self Employed Professional 4% 3% Housewife 8% 9% SEC A1 33% 20% A2 36% 34% B1 23% 29% B2 9% 17% Individual Income (Monthly Average, Rs. 35.1 26.9 thousands) Household Income (Monthly Average, Rs. 86.4 56.4 thousands)
Mobile banking users also use more advanced phones.10
10 Basic phone is one with minimal features like calling, sending text, receiving calls and may have radio with no option of camera, media player, videos or internet access. Multimedia phone can handle music pictures and videos. Smartphones allow users to store information, email, install programs, click pictures, store images and videos. These are phones where applications from a third party are accessible. See appendix for pictures. 21
Figure 8: % mobile banking users by SEC and phone type
Basic Multimedia Smartphone All SEC A1 0 41% 50% 43% SEC A2 0 27% 56% 33% SEC B1 0 27% 40% 27% SEC B2 0 17% 37% 19% All 0 28% 49% 32%
Many of the entry‐level handsets that are prevalent in India do not support applications like JAVA and internet browsing. They are browser‐unfriendly, and have monochromatic, low‐ resolution screens, which are designed to deliver voice rather than data. Additionally, 3G technology also encourages adoption.
Figure 9: % mobile banking users by SEC and cell technology
2G 3G All SEC A1 42% 48% 43% SEC A2 32% 36% 32% SEC B1 24% 39% 26% SEC B2 20% 29% 21% All 30% 41% 32%
Thus, the data suggests that lack of technology and mobile infrastructure remains a big hurdle to adoption. However, the rapid 3G expansion and falling price of sleeker and more user‐friendly handsets should encourage the large‐scale adoption of sophisticated mobile banking applications. Banks and mobile phone providers that are preparing to provide excellent mobile banking services in the immediate future therefore have great potential for large scale and rapid adoption of mobile banking services. Frequency and patterns of use among mobile banking users Moving beyond adoption, the survey gathered information on usage patterns of adopters. On average, M‐banking users used mobile banking service .97 times a week. Most users used it once a month, followed by a large group of weekly users. The frequency of usage increases with the experience of the user. The most recent adopters of mobile banking use the service .80 times a week while the most experienced ones average 1.24 times weekly. The first mobile banking service that consumers tend to use is of the simplest kind—checking or viewing an account balance on their phone. Forty six percent of respondents acknowledged this as their first type of mobile banking transaction followed by 31% stating that transferring or depositing money was their first one. 22
Types of tasks by SEC and over tenure of use Over time, the nature of the tasks tends to become more complex. Banking transactions that necessitate more trust and confidence in mobile banking as a medium also rise over the tenure of use. New customers tend to simply check or view account balances more compared to experienced users.
Figure 10: % users first transaction using mobile banking
Check/ View account balance 46
Transfer/deposit money 32
Payment of bills 10
Pay insurance premium 2
Request cheque book 2
View last few transactions 2
Invest in share market 1
View loan statements 1
View credit card Statements 1
Stop payment on cheques 1
PIN provision ‐ Change of PIN/ Password 1
Invest in Mutual funds <1
Figure 11 shows four different banking tasks that increase in complexity. Basic account balance viewing is simply gathering information. Transferring of money requires a higher level of trust and proficiency. Moving higher on the ladder of complexity, more involved decision is needed when investing in mutual funds. And finally the task requiring the highest level of trust and complexity is electronic clearing services (ECS) which moves fund among different bank accounts often automatically. We see that users new to m‐banking are most likely to transfer/deposit funds and view balances but do much less of the other two tasks. Users who have been m‐banking for two years or more, spend relatively less time on the basic transactions.
23
Figure 11: Type of m‐banking tasks by length of adoption
40% Viewing balance 62%
79% Transfer/Deposit 47%
25% Investing in MF 33%
0% Less than six months 2+ years ECS 22%
Similarly, higher SECs also conduct more sophisticated transactions. This is in part both because higher SECs are more likely to have been longer users of m‐banking but also because there is higher demand for these services by them. Larger wealth and portfolio diversification elicits more need for certain banking transactions. As banking needs but also time constraints increase, mobile banking offers an efficient and hassle‐free way to manage finances.
Hence while banks can acquire new customers relatively easily through simple transactions, they should be prepared to provide higher quality and more complex services as customers become more experienced if they would like to retain such customers in the face of competing banks augmenting their mobile services. This is particularly important for the higher SEC customers requiring more complex services.
Figure 12: Type of transactions by SEC
Viewing Transfer/deposit Investing ECS Balance SEC A1 62% 79% 25% 0% SEC A2 75% 64% 50% 54% SEC B1 61% 67% 18% 29% SEC B2 54% 47% 33% 22% 24
Post‐adoption changes in traditional branch banking habits Mobile banking users tend to use brick and mortar banks less, only about 80% as much as they use their phone to do banking business. M‐banking is the most common mode of transaction across many categories such as transfer/deposit money, automatic payments, checking balances, paying insurance premiums and investing in mutual funds. In fact, payment of bills remains the only substantive category where mobile bank users prefer branch banking. Asked directly about how traditional banking habits have changed since adoption, m‐banking users agree that physical visits have been reduced.
Figure 13: Change in physical bank visits since mobile banking
6 31
63
Reduced a lot Reduced to some extent No change
Overall, 31% of respondents say there has been a big decrease in physical visits. This figure increases monotonically with m‐banking tenure with 42% of the most experienced users claiming a larger reduction. Similarly, higher SEC respondents also have higher rates of substitution. In general, mobile banking users across the socio‐economic spectrum are very satisfied with their experience. Almost 70% of users rate it “very good” or “exxcellent” and almost 70% are “very” or “extremely” likely to recommend m‐banking to others.
These results are promising to banks. Customer visits to physical brannches are costly and shifting contact to mobile banking makes it more cost effective. However, one needs to assess whether customer satisfaction associated with mobile banking is high. If not, one may lower cost at the expense of higher churn. If however, customer satisfaction is greater, one may induce greater loyalty at lower costs. We assess satisfaction with mobile banking next.
Who will be the future users of mobile banking in India? Likelihood of usage among current non‐users Almost four out of five non‐users in the survey responded that they are extremely likely to use m‐ banking in the future. And 20% of those who expressed some reluctance would likely convert if given some guidance and support in doing so (bottom). 25
Figure 14: % Non‐users likely to convert; if given some guidance (bottom)
13 1 6
39 42
Not at all likelyl Not very likely Somewhat likelly Very likely Extremely likely
18 12 11
68
Future: Drawing from lower socio‐economic strata We have seen that users of mobile banking, both in terms oof greater adoption and usage, tend to be richer, wealthier and belong to higher SECs. This may lead to the concclusion that mobile banking is better suited to higher socio‐economic strata. However, this would be hasty conclusion without taking into account the technological constraints and banking alternatiives which poorer households face.
Table 5 shows the m‐banking adoption and use across SEC A (A1+A2) and SEC B (B1+B2) overall and also among the subset of respondents using 3G technology. We see that over SEC A has 13 percentage point more m‐banking users than SEC B and that the relative amounts of m‐banking to branch banking is higher among the former as well—the ratio is 70% more. However, once wee condition on 3G technology that is, eliminate respondents with 2G, these differences go down significantly. Thus, once technology is accounted for SECs look much more similar in terms of mobile banking use.11
11 In‐depth analysis in Sudhir and Tewari (2012) 26
Table 3: Adoption and use across SECs
SEC A SEC B Difference
% M‐banking users
All 37% 24% +13
with 3G 42% 38% +4
Mobile phone/Branch use ratio
All ~1.7 1 +.7
with 3G 1.7 1.4 +.3
As we have seen, one of the top constraints to adoption of mobile banking is the perception that the user’s cell phone is not conducive to mobile banking. It is the leading reason (following unavailability of a mobile network) that hinders mobile banking usage, both on the intensive and extensive margins. Given that more 3G smartphone users are doing mobile banking, this problem is closely tied to the predominant use of second generation basic or multimedia devices over third generation smartphones. Even among mobile banking adopters, those with a 3G handset use their cell phone for banking .38 times weekly compared to .28 times weekly by their 2G counterparts. Third generation smartphones are still out of the price range of less affluent households. But rapidly advancing technology is pushing prices down and removal of this technological constraint for poorer household is imminent. Once this happens, mobile banking is likely to take off in a big away.
On another dimension, poor banking infrastructure has created a pent‐up demand for mobile banking. Although all survey respondents have a bank account, there is dissatisfaction across all SECs with these services among various dimensions especially in terms of travel time to banks, inconvenient location of branches and amount of time spent in the branch. These issues are magnified among lower SECs. They tend to express even more dissatisfaction about traditional a banking method which is not surprising because they tend to live farther from banks and have limited resources like domestic help, computers or phones to skip physical visits. On the supply side, banks have not done a good job servicing these smaller customers. Richer consumers, on the other hand have found that mobile banking an effective way to circumvent issues. This was evidenced by the fact that mobile banking users, in spite of being wealthier with presumably better access to banks, tend to physically use banks less. So the worse conditions in traditional banking for less affluent households will attract them to mobile banking as a hassle‐free way to do banking. Thus, habits, preference for traditional banking or socio‐economic status are not likely to be barriers to adoption and usage. The “pull” factor of cheap, new 3G handsets combined with the “push” factor of lumbering traditional banking infrastructure are likely to result in rapid demand for mobile banking across a variety of users. 27
Conclusion Mobile banking provides the promise of expanding both the quality of banking services and reach of banking services in a large country like India in a cost‐effective manner. Using a consumer level survey, we investigated consumer needs that triggers adoption and barriers than serve to limit adoption of mobile banking. We also evaluated the satisfaction with mobile banking and how adoption of mobile banking changes usage of traditional banking services.
Our key findings and takeaways are as follows: There is latent demand for mobile banking both among the richer upper classes and poorer middle classes. The upper middle classes are drawn by the possibility of superior service that saves time and provide anytime anywhere access to mobile banking. The poorer middle classes who have limited access to traditional banking services find the traditional alternative to be very poor, that mobile banking even at the most basic level are attractive to them.
Richer SECs are also more concerned about issues of security and trust. As sophisticated customers, they have higher expectations to enter the mobile banking category, given their higher levels of satisfaction with the closer alternative, traditional banking. Hence mobile banking service quality is likely to be an important competitive weapon in attracting and retaining customers from higher SECs in the future. We find users even from lower SECs graduate to using more sophisticated transactions over time, and can become more demanding. So while immediate adoption among lower SECs may be possible by simply providing them the option, their long‐term retention, especially as banks compete on the quality of services provided requires greater investment in ease of use and quality of services.
Banks can do more to instill awareness of their mobile banking services to increase adoption. Customers seem to learn more about mobile banking from friends and relatives than from the banks themselves. Given that trust and word of mouth are likely to be useful in the adoption of services, small referral incentives may accelerate the shift to mobile banking. Given the lower costs of services through mobile banking, even when bank branches are present, it is in the bank’s interest to encourage such adoption. Banks may also wish to partner with mobile phone service providers to have apps installed on handsets that makes it easier to access banking services through the phone. Given the fairly high levels of satisfaction with mobile banking services, relative to traditional banking services, the shift may not only be favorable in terms of costs, but also in terms of customer satisfaction and retention. Mobile banking might therefore truly be a win‐win for banks and customers.
Lower SECs have lower rates of adoption of mobile banking services. However closer inspection reveals that this is not due to lack of interest and resistance to adopt new behaviors, but due to lack of access to the complementary infrastructure of smart phones and 3G services. Given that prices of smart phones are expected to plummet, and 3G penetration are likely to expand dramatically, there is substantial latent demand waiting to be filled. Banks that are well‐prepared to leverage and deal with this potential explosion in demand are poised to gain substantial market share over the next few years. 28
Overall, mobile banking seems to be an idea whose time has come. Our research suggests that supply side constraints are the bottlenecks to adoption; consumers are ready and waiting to adopt. Given the expansion of higher bandwidth data services, and accelerated price drops of smart phones, investments by banks in easy‐to‐use interfaces coupled with marketing of the services is likely to have large scale payoffs for banks at the frontier.
29
Appendix 1: Some mobile banking models in developing countries12
Table A1: Mobile banking models in emerging markets
Lead Model Mode of action Bank/telecom Conventional ATM, POS are used through debit card Payment via value chain, account management SMART (bank‐ Banco Banks sign up account led) D’Oro/Smart Philippines Accounts managed by mobile network operators GCASH Telecom (MNOs), banks have real‐time access (telecom‐led) Globe Telecom Core processing system lies with MNO, bank holds delivery channel
Safaricom is mainly a payment provider for the M‐Pesa Kenya Safaricom microfinance institution FAULU (telecom‐led) Payments are conducted via airtime agents Clients open bank accounts through remote, interactive process Mobile money starter packets are available via MTN (bank‐ Standard Bank, South Africa MTN agents and bank branches led) MTN Core processing system lies with MNO, bank holds delivery channel Mobile payment is restricted to bank account mCHECK holders, residents of India and transactions in Airtel Indian rupees Indian Bank‐led State Bank of India, No interbank network available ICICI, Citibank Banks can make multilateral agreements to
create mobile switches Account holder can initiate transaction via mobile with the help of an interactive voice Pakistan Bank‐led UBL response Conventional ATM, POS are used as delivery channel
12 Another useful resource is the the Consultative Group to Assist the Poor (CGAP) report “Branchless Banking 2010: Who’s Served? At What Price? What’s Next?” provides data and description of various mobile banking and mobile payment systems in developing nations. It is available at: http://www.cgap.org/gm/document‐1.9.47614/FN66_Rev1.pdf 30
Appendix 2: Survey Questionnaire
Recruiting Questionnaire NAME OF RESPONDENT: Mr./Mrs.______SURNAME ______
ADDRESS IN FULL:
BUILDING / Plot NAME / NO.: ______
FLAT / ROOM NO.: ______FLOOR NO.:____
STREET / ROAD NO./NAME: ______Locality Name ______
AREA NAME: ______CITY/District / village: ______PIN CODE: ______Taluka name:
LANDMARK: ______
EMAIL ADDRESS: ______
DATA SUPPLIER NAME : ______DATA VERIFIER NAME : ______
Mobile number :______
Landline Number: ______
Q1 IDENTIFICATION NUMBER.
(R1) AREA NO.
(R2) G.C.No.
(R3) LISTING NO.
(R4) MAIN No.
(R5) D.S. No.
(R6) D.V. No.
31
Q2 Q.C [MA][SA]
RQ AC CB AC RQ BC CB BC RQ CB TBC RQ VC CB VC RQ CB SCR TBC SCR
(R1) D.V ( SIGN./DATE) 01 02 03 04 05 06 07 08 09 10
(R2) OC /OE / SOE ( SIGN./DATE) 01 02 03 04 05 06 07 08 09 10
(R3) OM/SM ( SIGN./DATE) 01 02 03 04 05 06 07 08 09 10
Q3a Date of Interview [dd/mm/yy]
Please record using the short date format (dd/mm/yy). For example, if the date is 21 December 2005, record as 211205
Q3b RECORD TIME INTERVIEW STARTED / ENDED
Please record using 24‐hour format. For example, if the time is 2:47pm, record as 1447
Q3c Time Ended (24‐hour format)
Q3d Interviewer Name
Q3e Interviewer ID Number
Q3a Q3b Q3c Q3d Q3e 32
Date of Time Time Intervie Interviewe Intervie Started Ended wer r ID w[dd/m Name Number m/yy] (24‐hour (24‐hour format) format)
______(R1) INTERVIEW DETAILS ______
Q4 Record Contact No:
(R1) Telephone No. Resi
(R2) Telephone No. PP (C/O)
(R3) Telephone No. Office
(R4) Mobile No. Self
Q5 RECORD CENTER[SA] Code Route
Mumbai 01
Delhi 02
Lucknow 03
Kochi 04
Indore 05
ASK TO SPEAK TO ANY ADULT MEMBER IN THE HOUSEHOLD IN THE AGE BAND 18‐55 YRS, WITH AN ACTIVE BANK ACCOUNT.
Good morning/afternoon/evening. My name is ...... I am an interviewer from The Nielsen Company Limited. which is a market research company. We are conducting a small survey and would appreciate if you could spare a few minutes to answer our questions. Please be assured that all your answers will be kept strictly confidential.
Q6 SHOW CARD Code Route
Can you please take a look at this card and tell me whether you or any member 33
in your household works in any of the following types of organization. [SA]
Banks 1 CLOSE
Financial Institutions 2 CLOSE
Telecommunications‐Mobile Service Provider Company/ Handset Manufacturers 3 CLOSE
Market research 4 CLOSE
CLOSE Advertising or PR agency 5
Media/Radio/ Newspaper/Magazine 6 CLOSE
Manufacturer/ Wholesaler/Retailer of consumer electronics like TV, refrigerator, etc 7
Company manufacturing soap/toiletries …______8
Government institutions 9
None of the above 10
Q7 ASK ALL Code Route
Have you been interviewed by any market research agency in the past 6 months? [SA]
Yes 1 CLOSE
No 2
34
Screener (Administered to all the respondents)
Q1. SHOWCARD Code Route
ASK ALL
Can you please take a look at this card and tell me the highest level of education of the Chief Wage Earner in your household? By Chief Wage Earner, I mean the person who contributes the maximum to the monthly household income. [SA]
Illiterate 1
Literate but no formal schooling 2
School‐Upto4 years 3
School‐5 to 9 years 4
SSC/ HSC 5
Some College (includes a Diploma) but not Grad 6
Graduate/ Post Graduate: General 7
Graduate/ Post Graduate: Professional 8
Q2. a SHOWCARD Code Route
ASK ALL
Can you please take a look at this card and tell me the occupational position of the Chief Wage Earner in your household? By Chief Wage Earner, I mean the person who contributes the maximum to the monthly household income. PROBE FOR DESIGNATION OR LEVEL.
[SA]
Unskilled worker 01
Skilled worker 02
Petty trader 03 35
Shop owner 04
Businessman/Industrialist with ‐ No employees 05
Businessman/Industrialist with ‐ 1‐9 employees 06
Businessman/Industrialist with ‐ 10+ employees 07
Self‐Employed Professional 08
Clerical / Salesman 09
Supervisory Level 10
Officer/Executive‐ Junior 11
Officer/Executive‐ Middle / Senior 12
Some College Graduate / Graduate / post School School (includes a post Education Illiterate SSC / HSC graduate Upto 4th 5th – 9th Diploma) but not graduate professional Grad general Occupation 1 2 3 4 5 6 7 Unskilled 1 E2 E2 E1 D D D D Skilled worker 2 E2 E1 D C C B2 B2 Petty trader 3 E2 D D C C B2 B2 Shop owner 4 D D C B2 B1 A2 A2 Business / indust’list with number of employees None 5 D C B2 B1 A2 A2 A1 1 ‐ 9 6 C B2 B2 B1 A2 A1 A1 10 + 7 B1 B1 A2 A2 A1 A1 A1 Self employed 8 D D D B2 B1 A2 A1 professional Clerical/ salesman 9 D D D C B2 B1 B1 Supervisory level A D D C C B2 B1 A2 Off / exec – junior B C C C B2 B1 A2 A2 Off/ exec ‐ mid/senior C B1 B1 B1 B1 A2 A1 A1
50
Q2b CODE SEC Q1 * Q2a [SA] Code Route
SEC A1 1
SEC A2 2
SEC B1 3
SEC B2 4
SEC C 5 CLOSE
SEC D 6 CLOSE
SEC E1 7 CLOSE
SEC E2 8 CLOSE
RECORD RESPONSES FORQ3 TO Q7 IN THE GRID BELOW
Q3. Can you please tell me your age in completed years
Q4. Record Gender
Q5. Do you hold a savings bank account? SA
Q6. Do you own a mobile phone service? Here I am referring to not only owning a mobile phone but also an active connection? SA
Q7. IF CODED YES IN Q6, ASK, is your mobile phone a basic phone, Multimedia phone or Smartphone. IF THE RESPONDENT OWNS MORE THAN ONE PHONE, ASK FOR THE ONE HE USES MOST OFTEN. SA
Interviewer should explain what each type of phone means:
By Basic phone I mean a phone with minimal features like calling, sending text SMS, receiving calls, may have a radio service with no option of camera, media player, videos or internet access.
Multimedia phone is the one that can handle music, pictures and videos. Smart phones allow users to store information, e‐mail, install programs, click pictures, store images & videos. These are the phones where applications from third party are accessible. eg. Facebook
51
Q3. Age Q4. Gender Q5. Bank A/c Q6. Cell phone Q7. Type of cell phone Name
Male Female Yes No Yes No Basic Multimedia Smart
1 2 1 2 1 2 1 2 3
CONTINUE ONLY IF :
1. SEC AB HOUSEHOLD (CODED 1 TO 4 IN Q2b) 2. RESPONDENT AGE BETWEEN 18‐55 YEARS (REFER Q3) 3. BANK ACCOUNT HOLDER (CODED YES I.E. 1 IN Q5)
Q8. You mentioned that you have a savings bank account. In which all Q8. Bank Q9.a.M Q9b. Other banks do you have a savings account? [MA] accounts ain Bank owned Bank account Q9. a IF CODED MORE THAN ONE OPTION IN Q8, ASK Q9a, ELSE CODE THE accoun
SAME BANK AS CODED IN Q8 UNDER Q9a: Of all the banks you have t an account in , which is your main savings bank account; by main I
mean the bank with which you do the maximum number of transactions? [SA]
IF CODED MORE THAN TWO OPTIONS IN Q8, ASK Q9b: And which of these is the other account with which you do the next highest number Q9.b of transactions? [SA]
PUBLIC SECTOR BANK
Allahabad Bank 1 1 1
Andhra Bank 2 2 2
Bank of Baroda 3 3 3
Bank of India 4 4 4
Bank of Maharashtra 5 5 5
Canara Bank 6 6 6
Central Bank of India 7 7 7 52
Corporation Bank 8 8 8
Dena Bank 9 9 9
IDBI Bank 10 10 10
Indian Bank 11 11 11
Indian Overseas Bank 12 12 12
Oriental Bank of Commerce 13 13 13
Punjab & Sind Bank 14 14 14
Punjab National Bank 15 15 15
State Bank of India 16 16 16
State Bank of Bikaner & Jaipur 17 17 17
State Bank of Hyderabad 18 18 18
State Bank of Mysore 19 19 19
State Bank of Patiala 20 20 20
State Bank of Travancore 21 21 21
Syndicate Bank 22 22 22
UCO Bank 23 23 23
Union Bank of India 24 24 24
United Bank of India 25 25 25
Vijaya Banka 26 26 26
PRIVATE SECTOR BANK
American Express Bank 27 27 27
Axis Bank (Formerly UTI Bank) 28 28 28
Barclays Bank PLC 29 29 29
BNP Paribas 30 30 30
Citibank N.A. 31 31 31 53
City Union Bank 32 32 32
DBS Bank 33 33 33
Deutsche Bank AG 34 34 34
Dhanlaxmi Bank 35 35 35
Federal Bank 36 36 36
HDFC 37 37 37
HSBC 38 38 38
ICICI Bank 39 39 39
IndusInd Bank 40 40 40
ING Vysya Bank 41 41 41
Jammu & Kashmir Bank 42 42 42
JPMorgan Chase Bank 43 43 43
Karnataka Bank 44 44 44
Karur Vysya Bank 45 45 45
Kotak Mahindra Bank 46 46 46
Lakshmi Vilas Bank 47 47 47
Royal Bank of Scotland 48 48 48
South Indian Bank 49 49 49
Standard Chartered Bank 50 50 50
Tamilnad Mercantile Bank 51 51 51
UBS 52 52 52
Yes bank 53 53 53
Others Please Specify______99 99 99
54
Q10. Now I will show you a few concepts. I would like to know if you have heard of these before.
Q10.a. M BANKING SHOWCARD: m‐Banking or Mobile Banking is a term used to define banking over the mobile phone which would include using the internet browser on the mobile phone to access the bank website and then do any of the financial activities like paying utility bills, transferring money, paying an insurance premium, etc. OR, using a mobile Application for easy and simple access to the Bank Mobile website to perform financial activities like viewing the bank balance, transferring money, etc.
Aware of m‐Banking Code Route
Yes 1 Go to Q10b
No 2 CLOSE
10b Now I will read out a few financial activities that we usually do in our day to day life. I would like to know which of these have you heard are possible through your mobile phone or through M Banking. READ OUT EACH ACTIVITY ONE BY ONE AND CODE THE ONES THE RESPONDENT IS AWARE OF [MA]
Q10b. Aware of m banking
(R1) Deposit your telephone/mobile bills, utility bills like electricity bill 01
(R2) Transfer/deposit money 02
(R3) Check/ View account balance 03
(R4) Pay insurance premium 04
(R5) Monitoring Deposits/ Fixed/ Recurring Deposits –Short & Long term 05
(R6) Invest in share market 06
(R7) Request cheque book 07
(R8) View Last few transactions/ Mini Statements 08
(R9) View Loan statements 09
(R10) View Credit Card Statements 10
(R11) Invest in Mutual funds 11
(R12) Stop payment on cheques 12 55
Functionality to stop, change and delete payments / ECS Linking account for 13 (R13) Auto Debit
(R14) PIN provision ‐ Change of PIN/ Password 14
(R15) None of the above 15
TERMINATE THE INTERVIEW IF THE RESPONDENT IS NOT AWARE OF ANY THE ACTIVITIES IN Q10b, I.E. IF CODED 15, NONE OF THE ABOVE IN Q10b
Now, I would like to expose another concept to you. Please tell me if you have heard of this before?
Q11.a. INTERNET BANKING SHOWCARD: Internet banking allows customers of a bank to conduct financial transactions on a secure website operated by the bank. To access a bank’s online banking facility, a customer must have Internet access and should be registered with the banking institution for the service, and set up some password for customer verification.[SA]
Aware of Internet banking Code Route
Yes 1 Go to Q11b
No 2 Go to Q12a
Q11b Now I will read out few financial activities that we usually do in our day to day life. I would like to know which of these have you heard are possible through the Internet. READ OUT EACH ACTIVITY ONE BY ONE AND CODE THE ONES THE RESPONDENT IS AWARE OF [MA]
Activities Q11.b. Aware of Internet banking
Deposit your telephone/mobile bills, utility bills like electricity (R1) 01 bill
(R2) Transfer/deposit money 02
(R3) Check/ View account balance 03
(R4) Pay insurance premium 04
Monitoring Deposits/ Fixed/ Recurring Deposits –Short& Long (R5) 05 term
(R6) Invest in share market 06
(R7) Request cheque book 07 56
(R8) View Last few transactions/ Mini Statements 08
(R9) View Loan statements 09
(R10) View Credit Card Statements 10
(R11) Invest in Mutual funds 11
(R12) Stop payment on cheques 12
Functionality to stop, change and delete payments / ECS (R13) 13 Linking account for Auto Debit
(R14) PIN provision ‐ Change of PIN/ Password 14
(R15) None of the above 15
57
Q12a. Talking about Mobile Banking, can you please tell me where did you hear Q12a‐ M Q12b about M‐Banking? [MA] banking Internet Banking IF AWARE OF INTERNET BANKING I.E. CODED YES IN Q11a AND CODED Q12b. ATLEAST ONE ACTIVITY IN Q11b, THEN ASK: And where did you hear about Internet Banking? [MA]
Read about it in Newspapers/ Magazines /Other Print ads ...... 01 01
Heard about it on Television ...... 02 02
Direct mailers ...... 03 03
At the Bank branch ...... 04 04
Through the Mobile Service provider ...... 05 05
Friends/ family/ Colleagues using the service...... 06 06
Internet ...... 07 07
Call from a bank informing about m‐Banking/Internet Banking...... 08 08
Any Other (Please specify) ...... 09 09
Provided by the Used by you bank
Q13a Can you please look at this card and tell me which all Q13a. Q13b. Q14a. Q14b. facilities/services are you aware of that are provided by Main Other Main Other your main bank ______(READ OUT BANK CODED UNDER Bank bank ___ Bank bank Q9a)? ______ASK Q13b, IF ANOTHER BANK CODED UNDER Q9b. Now
can you please tell me what all facilities/services are you Q13b aware of that are provided by ______(MENTION BANK CODED UNDER Q.9b)? [MA]
Out of all the banking services/ facilities that you mentioned are provided by your Main bank ______(READ OUT BANK CODED UNDER Q9a), which all services/ facilities have you used in the last 3 months? [MA]
Out of all the banking services/ facilities that you mentioned are provided by your next most used bank Q14a account ______(READ OUT BANK CODED UNDER Q9b), 58
which all services/ facilities have you used in the last 3 months? [MA]
Q14b
Branch Banking (Physically visiting bank for any financial transactions/ activities) ...... 01 01 01 01
ATM Banking (Physically visiting an ATM to do any financial transactions/ activities) ...... 02 02 02 02
Internet Banking (Using the Internet to do any financial transactions/ activity) ...... 03 03 03 03
Mobile Banking (Using the internet browser on the mobile or a mobile application to perform any financial activity/ transaction) ...... 04 04 04 04
SMS Banking (Subscribing for SMS alerts from the bank. Receiving alerts in case of cash withdrawal, money transfer, credit/ debit card transaction etc) 05 05 05 05
Phone Banking (Transacting over the phone with the bank helpline/ call center) 06 06 06 06
Doorstep / Home Service (Having some one visit you from the bank at your home to carry out your financial transactions/ activity) 07 07 07 07
59
RECRUITMENT QUOTAS:
TO BE AUTOCODED BY THE PROGRAMMER DEPENDING ON THE RESPONSES IN THE SCREENER:
SEGMENT CODE INSTRUCTIONS
Aware – Non User of M‐ 1. CODED 1 IN Q10a AND ATLEAST ONE ACTIVITY IN Q10b banking, Account with a Public 2. NOT CODED 4 I.E. MOBILE BANKING IN Q13a AND Q14a UNDER Sector Bank 1 MAIN BANK 3. CODED ANY 1 TO 26 UNDER Q9a Aware – Non User of M‐ 1. CODED 1 IN Q10a AND ATLEAST ONE ACTIVITY IN Q10b banking, Account with a Private 2. NOT CODED 4 I.E. MOBILE BANKING IN Q13a AND Q14a UNDER Sector Bank 2 MAIN BANK 3. CODED ANY 27 TO 53 UNDER Q9a Aware –User of M‐ banking, 1. CODED 1 IN Q10a AND ATLEAST ONE ACTIVITY IN Q10b Account with a Public Sector 2. CODED 4 I.E. MOBILE BANKING IN Q13a AND Q14a UNDER MAIN Bank 3 BANK 3. CODED ANY 1 TO 26 UNDER Q9a Aware – User of M‐ banking, 1. CODED 1 IN Q10a AND ATLEAST ONE ACTIVITY IN Q10b Account with a Private Sector 2. CODED 4 I.E. MOBILE BANKING IN Q13a AND Q14a UNDER MAIN Bank 4 BANK 3. CODED ANY 27 TO 53 UNDER Q9a
60
Detailed Questionnaire
Section 1 –Overall Banking Information Now I will read out a few financial activities. Please think of your Main bank account only while answering the following questions, i.e. saving bank account with ______(Programmer to insert the name of the bank from Q9a above)
Q16a. Can you tell me which of these financial transactions have you done in the last 3 months? [MA]
Q16b. For each of the activity coded in Q16a, Interviewer to ask: Please have a look at this showcard. As I read each activity done by you, please let me know which modes/services have you used for performing this activity. INTERVIEWER TO REPEAT THIS QUESTION FOR EACH ACTIVITY CODED IN Q16a [MA for each activity] INTRUCTION FOR PROGRAMMER: ALL MODES/ SERVICES CODED UNDER Q14a, SHOULD BE CODED UNDER Q16b AS WELL
SHOWCARD: List of MODES/ SERVICES
1) Used Branch Banking i.e. visited the branch physically. Here we are referring to either you visiting the bank physically or some other family member visiting the bank and getting the activity done on your behalf
2) Used ATM Banking‐> i.e. visited a nearby ATM
3) Used Internet/Net Banking
3) Used Mobile Banking
4) Used Phone Banking i.e. transacted via Bank Call centre (Helpline)
5) Doorstep/ Home Service Some one from the bank visited your home
6) Others Pls specify
Q16c. IF CODED MORE THAN 1 MODE/ SERVICE IN Q16b FOR ANY OF THE ACTIVITIES, INTERVIEWER TO ASK: For the activity ______(PROGRAMMER TO INSERT THE ACTIVITY FROM Q16a) which is the most often used mode/ service? [SA for each activity]
61
Q16d. IF MORE THAN ONE MODE/ SERVICE CODED IN Q16b FOR ANY ACTIVITY, ASK Q16 d FOR THAT ACTIVITY ELSE SPECIFY 10 UNDER THE SAME. Assuming that you ______(PROGRAMMER TO INSERT THE ACTIVITY FROM Q16a) 10 times in the last three months, what was the proportion of using ______(READ MODES/ SERVICES CODED IN Q16b) in these 10 transactions ?
(INSTRUCTION TO THE PROGRAMMER: PROPORTION SHOULD ADD UPTO 10 AND SHOW THE SUM)
Q16 Q16c Q16d Q16b a
s /
g g
y Pl ep t ATM
ecif d ers Net Net Used Used Used Used p last 3 Home Home Phone Phone mode/ facility Mobile Mobile s branch specify branch se oors Service Service done in months banking banking bankin banking banking banking Banking Bankin Banking Banking Internet/ Internet/ Oth Used ATM Others Pls U Doorstep/ D often used Deposit your telephone/mobile bills, (R1) 01 01 02 03 04 05 06 99 01 01 02 03 04 05 06 99 utility bills like electricity bill
(R2) Transfer/deposit money 02 01 02 03 04 05 06 99 02 01 02 03 04 05 06 99
(R3) Check/ View account balance 03 01 02 03 04 05 06 99 03 01 02 03 04 05 06 99
(R4) Pay insurance premium 04 01 02 03 04 05 06 99 04 01 02 03 04 05 06 99
Monitoring Deposits/ Fixed/ Recurring (R5) 05 01 02 03 04 05 06 99 05 01 02 03 04 05 06 99 Deposits –Short& Long term
(R6) Invest in share market 06 01 02 03 04 05 06 99 06 01 02 03 04 05 06 99
(R7) Request cheque book 07 01 02 03 04 05 06 99 07 01 02 03 04 05 06 99
View Last few transactions/ Mini (R8) 08 01 02 03 04 05 06 99 08 01 02 03 04 05 06 99 Statements 62
(R9) View Loan statements 09 01 02 03 04 05 06 99 09 01 02 03 04 05 06 99
(R10 View Credit Card Statements 10 01 02 03 04 05 06 99 10 01 02 03 04 05 06 99 )
(R11 Invest in Mutual funds 11 01 02 03 04 05 06 99 11 01 02 03 04 05 06 99 )
(R12 Stop payment on cheques 12 01 02 03 04 05 06 99 12 01 02 03 04 05 06 99 )
Functionality to stop, change and (R13 delete payments / ECS Linking 13 01 02 03 04 05 06 99 13 01 02 03 04 05 06 99 ) account for Auto Debit
(R14 PIN provision ‐ Change of PIN/ 14 01 02 03 04 05 06 99 14 01 02 03 04 05 06 99 ) Password
(R15 Passbook Updation 15 01 02 03 04 05 06 99 15 01 02 03 04 05 06 99 )
(R16 Any other, please 16 01 02 03 04 05 06 99 16 01 02 03 04 05 06 99 ) specify______
63
Q17. At present, how often do you visit the bank physically? [SA] Code Route
Daily ...... 01
2‐3 times a week ...... 02
Once a week ...... 03
Once a fortnight ...... 04
Once a month ...... 05
Less than once a month 06
Never visited the bank physically for any financial transaction in the last three months 07
Q18. Do any of your family members use Mobile Banking? [MA] M‐ Interne Route banking t Q19. Do any of your family members use Internet banking bankin transactions? [MA] g
Self (AUTO CODE BASIS RESPONSE IN Q14a/Q14b)...... 01 01
Spouse ...... 02 02
Parents ...... 03 03
Siblings 04 04
Grand parents 05 05
Children 06 06
Others 07 07
None 08 08
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Q20 Now I will read out few statements which people like you have mentioned as problems they face when they need to reach out to their bank physically for any transaction. As I read each statement, please state your level of agreement on a scale of 1‐5 where 1 means you strongly disagree while 5 means strongly agree [SA per statement]
Amongst all the problems faced by you, rank the top 3 problems where rank 1 means the top
most problem
Q21
Q20 Q21
Problem
(If to
ed) Rank some Agree extent extent Neither to some Agree Strongly Strongly disagree disagree Disagree DK/CS agree nor volunteer I end up wasting a lot of time travelling to (R1) 1 2 3 4 5 9 the bank
Bank branches are not at convenient (R2) 1 2 3 4 5 9 locations for me
I am usually unable to locate a bank (R3) branch easily when I travel to a different 1 2 3 4 5 9 city
I have to wait long in bank queues for (R4) 1 2 3 4 5 9 someone to attend to me
Service provided by the bank is not up to (R5) 1 2 3 4 5 9 the mark
Very often I notice that my banking (R6) 1 2 3 4 5 9 transactions are not recorded error‐free
I have to move from one counter to (R7) another one in the bank to get my work 1 2 3 4 5 9 done
(R8) Bank employees/ Front desk executives at 1 2 3 4 5 9 the bank are not willing to help customers
Many a times, bank employees do not (R9) have adequate knowledge to satisfy me 1 2 3 4 5 9 with my queries and complaints
(R10) My bank doesn’t provide personal 1 2 3 4 5 9 65
attention or customised services
I cannot access the bank at all hours round (R11) 1 2 3 4 5 9 the clock on all days
I do not find the bank infrastructure (R12) 1 2 3 4 5 9 modern and visually appealing
My bank does not offer better service and (R13) 1 2 3 4 5 9 facilities compared to other banks
My bank does not have a past record of (R14) 1 2 3 4 5 9 reliability and trustworthiness
Cheque clearance incase of deposits do (R15) 1 2 3 4 5 9 not reflect on the same day
66
Section 2 –Usage of Internet banking (Administered to all the respondents who are Internet banking users, i.e. coded 03 in Q13b/14b fo any of his bank account
You mentioned that you have carried out few financial transactions using Internet. Now I will ask you few questions related to your usage of Internet banking.
Q1) When did you start using Internet Banking? [SA] Code
In the last 6 months ...... 01
6‐ 12 months back ...... 02
More than a year but less than 2 years back...... 03
More than 2 years back ...... 04
Q2a) And which of these transactions did you first start doing Q2a Q2b using the Internet? [SA] Q2b) What else? [SA]
Deposit your telephone/mobile bills, utility bills like (R1) 01 01 electricity bill
(R2) Transfer/deposit money 02 02
(R3) Check/ View account balance 03 03
(R4) Pay insurance premium 04 04
Monitoring Deposits/ Fixed/ Recurring Deposits –Short& (R5) 05 05 Long term
(R6) Invest in share market 06 06
(R7) Request cheque book 07 07
(R8) View Last few transactions/ Mini Statements 08 08
(R9) View Loan statements 09 09 67
(R10) View Credit Card Statements 10 10
(R11) Invest in Mutual funds 11 11
(R12) Stop payment on cheques 12 12
Functionality to stop, change and delete payments / ECS (R13) 13 13 Linking account for Auto Debit
(R14) PIN provision ‐ Change of PIN/ Password 14 14
Q3. Given the availability of Internet banking now, would you say that your Code Route physical visits to a bank has______[SA]
Reduced a lot 01
Reduced to some extent 02
There has been no change in the frequency of my visits to the bank 03
68
Section 3 –Usage of Mobile Banking (Administered to all the respondents who are Mobile Banking users i.e. coded 04 in Q14a for the MAIN Bank)
You mentioned that you have carried out a few financial transactions using mobile banking. Now I will ask you few questions related to your usage of mobile banking.
Q1) When did you start using mobile Banking? [SA] Code
In the last 6 months ...... 01
6‐ 12 months back ...... 02
More than a years but less than 2 years back...... 03
More than 2 years back ...... 04
Q2a) And which of these transactions did you first start doing using mobile Q2a Q2b banking? [SA]
What else? [SA] Q2b)
(R1) Deposit your telephone/mobile bills, utility bills like electricity bill 01 01
(R2) Transfer/deposit money 02 02
(R3) Check/ view account balance 03 03
(R4) Pay insurance premium 04 04
(R5) Monitoring Deposits/ Fixed/ Recurring Deposits –Short& Long term 05 05
(R6) Invest in share market 06 06
(R7) Request cheque book 07 07
(R8) View Last few transactions/ Mini Statements 08 08
(R9) View Loan statements 09 09
(R10) View Credit Card Statements 10 10
(R11) Invest in Mutual funds 11 11 69
(R12) Stop payment on cheques 12 12
Functionality to stop, change and delete payments / ECS Linking (R13) 13 13 account for Auto Debit
(R14) PIN provision ‐ Change of PIN/ Password 14 14
Now I will read out a few statements which other people have said about their attitude towards using mobile banking and what led to their usage of mobile banking. As I read out each statement, Q3a) please state your level of agreement on a scale of 1‐5 where 1 means you strongly disagree while 5 means strongly agree [SA per statement]
Amongst all the reasons that I just read out right now, please rank the top 3 reasons that led to
your usage of Mobile Banking where rank 1 means the top most reason and so on Q3b)
Q3a Q3b
er
)
h Rank t
Factors i ed e some gree to Agree extent extent N to some A Strongly Strongly disagree disagree Disagree agree nor volunteer (R1) Mobile phone is an easy to use device 1 2 3 4 5 6
Using a mobile for banking makes banking (R2) 1 2 3 4 5 6 hassle free and effortless
(R3) I can do banking anytime/ anywhere 1 2 3 4 5 6
Consistent service experience, as human (R4) 1 2 3 4 5 6 intervention is less
Mobile banking has a user friendly (R5) 1 2 3 4 5 6 interface
I started using Mobile Banking as most of (R6) my friends and colleagues were also using 1 2 3 4 5 6 it
(R7) I take keen interest in newer technologies 1 2 3 4 5 6
It involves lower cost as compared to the (R8) 1 2 3 4 5 6 traditional and older modes of banking
Banking through the mobile saves a lot of (R9) 1 2 3 4 5 6 time 70
Ability to conduct financial transactions of (R10) 1 2 3 4 5 6 even smaller denominations
Q4a) Now I am going to read out some statements that other people have quoted as disadvantages of using Mobile Banking. As I read each statement, please tell me to what extent do you agree with each of these on a scale of 1‐5 where 1 means strongly disagree and 5 means strongly agree.
[SA for each statement]
Also rank the top 3 disadvantages according to you where Rank 1 means the top most disadvantage
Q4b)
Q4a Q4b
Rank Disadvantages extent Strongly disagree DK/CS (If Disagree to some extent nor disagree volunteered) Neither agree Agree to some Strongly Agree
(R1) At times there is no mobile network available 1 2 3 4 5 6
Mobile phone needs to be compatible for (R2) 1 2 3 4 5 6 mobile banking operations
There is no human interface or service (R3) executive, whom you can contact in case of 1 2 3 4 5 6 queries
It is expensive to use the mobile for such (R4) 1 2 3 4 5 6 activities
Mobile banking is not a secure and safe mode (R5) 1 2 3 4 5 6 to do financial transactions
(R6) Mobile banking is too complicated to use1234 56
(R7) Data transmission is very slow on the mobile 1 2 3 4 5 6
Lack of acknowledgement/receipt of the (R8) 1 2 3 4 5 6 transaction at times 71
Anyone can misuse my details incase I lose my (R9) 1 2 3 4 5 6 mobile phone
Mobile banking services are not versatile (R10) enough – not possible to do all types of 1 2 3 4 5 6 transactions through Mobile banking
Possibility of errors in Mobile banking are (R11) 1 2 3 4 5 6 higher than in Internet banking
Q5) SHOWCARD Code Route
On a scale of 1‐5 where 1 is not all easy to use while 5 is extremely easy to use, please indicate how easy do you think is, to use Mobile Banking services? [SA]
Not at all easy to use 01
Not very easy to use 02
Somewhat easy to use 03
Very easy to use 04
Extremely easy to use 05
Q6) How often do you use various Mobile Banking services? [SA] Code Route
Daily 01
2‐3 times a week 02
Once a week 03
Once a fortnight 04
Once a month 05
Less than once a month 06
72
Q7) Given the availability of mobile banking now, would you say that your physical Code Route visits to a bank has______[SA]
Reduced a lot 01
Reduced to some extent 02
No change in the frequency of my visits to the bank 03
Q8) SHOWCARD Code Route
On a scale of 1‐5 where 1 is very poor while 5 is excellent, please indicate your overall satisfaction with your current M Banking service? [SA]
Very Poor 01
Poor 02
Good or Average 03
Very Good 04
Excellent 05
Q9) SHOWCARD – LIKELIHOOD SCALE Code Route
On a scale of 1‐5 where 1 is not at all likely while 5 is extremely likely; please indicate how likely it is that you will recommend M Banking services to others? [SA]
Not at all likely 01
Not Very Likely 02
Somewhat likely 03
Very likely 04
Extremely likely 05
73
Section 4: Expected Usage among Respondents aware (but non‐users) of Mobile Banking (i.e. those coded any activity in Q10b AND not coded 4 in Q14a of Section 1‐Screener)
Q1) SHOWCARD – LIKELIHOOD SCALE Code Route
On a scale of 1‐5 where 1 is not at all likely while 5 is extremely likely, please indicate your likelihood of using Mobile Banking in future? [SA]
Extremely likely 01
Very Likely 02
Somewhat likely 03
Not very likely 04
Not at all likely 05
For all those coding 3/4/5 in Q1‐Section 4 above, ask Q2 else skip to Q3
Q2) SHOWCARD – LIKELIHOOD SCALE Code Route
On a scale of 1‐5 where 1 is not at all likely while 5 is extremely likely, please indicate your likelihood of using Mobile Banking in future if some guidance is provided to you? [SA]
Extremely likely 01
Very Likely 02
Somewhat likely 03
Not very likely 04
Not at all likely 05
You mentioned you are currently not using Mobile Banking services. If you Rank were to ever adopt Mobile Banking service for your financial activities, can Q3) you please tell me which of these are you likely to start using first. Please tell me the top 3 services of the list provided [MA]
(R1) Deposit your telephone/mobile bills, utility bills like electricity bill
(R2) Transfer/deposit money
(R3) Check/ view account balance 74
(R4) Pay insurance premium
(R5) Monitoring Deposits/ Fixed/ Recurring Deposits –Short& Long term
(R6) Invest in share market
(R7) Request cheque book
(R8) View Last few transactions/ Mini Statements
(R9) View Loan statements
(R10) View Credit Card Statements
(R11) Invest in Mutual funds
(R12) Stop payment on cheques
Functionality to stop, change and delete payments / ECS Linking account for (R13) Auto Debit
(R14) PIN provision ‐ Change of PIN/ Password
(R15) Others, please specify……………….
Q4a) Now I am going to read out some statements that other people have quoted as reasons for not opting Mobile Banking services. As I read each statement, please tell me the extent to which you too agree with each of these statements on a scale of 1‐5 where 1 means strongly disagree and 5 means strongly agree.[SA for each statement]
Q4b) Also rank the top 3 reasons where the Rank 1 means the biggest reason
Q4a Q4b
Reasons for not opting Rank agree agree DK/CS Neither Strongly Strongly disagree disagree disagree agree nor Somewhat Somewhat At times there is no (R1) 5 6 mobile network available 1 2 3 4
Mobile phone needs to be (R2) compatible for mobile 1 2 3 4 5 6 banking operations
There is no human (R3) interface or service 1 2 3 4 5 6 executive whom you can 75
contact in case of queries
It is expensive to use the (R4) 5 6 mobile for such activities 1 2 3 4
Mobile banking is not a (R5) secure and safe mode to 1 2 3 4 5 6 do financial transactions
Mobile banking is too (R6) 5 6 complicated to use 1 2 3 4
Data transmission is very (R7) 5 6 slow on the mobile 1 2 3 4
Lack of (R8) acknowledgement/receipt 1 2 3 4 5 6 of the transaction at times
Anyone can misuse my (R9) details in case I lose my 5 6 1 2 3 4 mobile phone
Mobile banking services are not enough versatile‐ (R10) not possible to do all 1 2 3 4 5 6 types of transactions through mobile banking
Possibility of errors in (R11) Mobile banking are higher 1 2 3 4 5 6 than in Internet banking
Don't know much about M Banking, how to use it and (R12) 5 6 how to avail of the service 1 2 3 4 through the bank
I currently don't find the (R13) 5 6 need for M Banking 1 2 3 4
Mobile in not as popular (R14) 5 6 as Internet banking 1 2 3 4
Not many people that I (R15) know are currently using 1 2 3 4 5 6 Mobile Banking
76
Section 5‐ Mobile phone usage (Ask all the respondents)
Q1. How many active mobile phone connections do you own? By active, I mean Code Route the connections you use at least once a month [MA]
Single 01
Two 02
Three 03
More than 3 04
Q2. Since how long have you owned a mobile service? [SA] Q2 Q3 Route Q3. What about your current connection, since when are you using it? [SA]
6 months back 01 01
More than 6 months & less than or equal to1 yr back 02 02
More than 1 yr & less than or equal to 2 yrs back 03 03
More than 2 yrs & less than or equal to 3 yrs back 04 04
More than 3 yrs & less than or equal to 4 yrs back 05 05
More than 4 yrs back 06 06
Q4. Can you please tell me the names of the service providers that you currently own?[MA] Q5. And which of these is your primary connection‐ your most often used connection? [SA] INSTRUCTIONS FOR THE PROGRAMMER: IF ONLY ONE BRAND IS CODED IN Q4, THE SAME BRAND NEEDS TO BE CODED UNDER Q5 AS WELL
Q6. Is this a Prepaid or a Postpaid connection? ASK FOR EACH BRAND CODED IN Q4 [SA per brand] Q7. Can you tell me, is ______connection (ASK FOR ALL CONNECTIONS MENTIONED IN Q4) a 2G or a 3G service? [SA] Q8. ASK MOBIL EBANKING USERS ONLY: On which connection do you currently use the Mobile Banking Service? [SA]
77
Q4 Q5 Q6 Q7
Mobile Currently banking MoUB Prepaid Postpaid 2G 3G DK/Cs subscribed service provider
(R1) Airtel ...... 01 01 1 2 1 2 3 01
(R2) Idea ...... 02 02 1 2 1 2 3 02
(R3) Aircel ...... 03 03 1 2 1 2 3 03
(R4) Vodafone ...... 04 04 1 2 1 2 3 04
(R5) BSNL ...... 05 05 1 2 1 2 3 05
(R6) MTNL ...... 06 06 1 2 1 2 3 06
(R7) MTS ...... 07 07 1 2 1 2 3 07
(R8) Reliance Mobile CDMA 08 08 1 2 1 2 3 08
(R9) Reliance Mobile GSM 09 09 1 2 1 2 3 09
(R10) Stel ...... 10 10 1 2 1 2 3 10
(R11) Tata Docomo GSM 11 11 1 2 1 2 3 11
Tata Indicom/Tata (R12) Docomo CDMA ...... 12 12 1 2 1 2 3 12
(R13) Uninor ...... 13 13 1 2 1 2 3 13
(R14) Videocon ...... 14 14 1 2 1 2 3 14
(R15) Virgin Mobile CDMA 15 15 1 2 1 2 3 15
(R16) Virgin Mobile GSM 16 16 1 2 1 2 3 16
(R17) Loop Mobile ...... 17 17 1 2 1 2 3 17
(R18) Others (Pls Specify) ...... 18 18 1 2 1 2 3 18
(R19) Don't Know ...... 19 19 1 2 1 2 3 19
78
Q9. Thinking about your most often used mobile phone connection ______(READ Code BRAND CODED UNDER Q5 ABOVE), please let me know for which of the following purposes, do you use your mobile phone? [MA] Make and receive calls 01
Send and receive SMS 02
Listening to Music 03
Watching videos 04
Internet browsing 05
Camera 06
Gaming 07
Monetary transactions 08
Any other services (Please specify………………..) 09
Q10. What is your monthly mobile phone bill? [Record Verbatim] Code Route
If more than one connection, let me know for the most used mobile connection ______(READ BRAND CODED UNDER Q5 ABOVE)
Rs.
79
Section 6‐PC/Internet usage (Ask all the respondents)
Q1. Can you please tell me which of these devices do you own in your household: Code Route [MA]
PC/Desktop 01
Laptop 02
Tablet 03
None of these 04
Q2. From which all places do you access Internet? [MA] All points Main Q3. of access point of Of all the places you mentioned, can you please tell me the place where you access access the internet most of the times? [SA]
Home 01 01
School/College 02 02
Office 03 03
Cyber café 04 04
Mobile phone 05 05
Others 06 06
I don’t access Internet (Instruction for programmer‐If coded Internet banking or mobile banking for any of the services coded in Q10a or Q11a of section‐1 (Screener), this option cannot be coded) 07
If coded 1 in Q2 of section 6 (PC/Internet usage), ask Q4 else skip to Q5
If coded 07 in Q2 of section 6 (PC/Internet usage), skip to section 7, else continue
80
Q4. You mentioned that you access Internet at home, please let me know the speed Code of the Internet connection at your home? [SA]
256 Kbps or less 01
More than 256 Kbps and upto 512 Kbps 02
More than 512 Mbps and upto 1 Mbps 03
More than 1 Mbps and upto 2 Mbps 04
More than 2 Mbps and upto 5 Mbps 05
More than 5 Mbps 06
DK/CS 07
Q5. Since how long are you using the Internet? [SA] Code
Last 6 months ...... 01
More than 6 months but less than a year 02
More than a year but less than 2 years ...... 03
More than 2 years but less than 3 years 04
More than 3 years 05
Q6. How frequently do you access Internet? [SA] Code
Daily ...... 01
2‐3 times a week ...... 02
Once a week ...... 03
Once a fortnight ...... 04
Once a month ...... 05
Less than once a month 06
81
Q7. SHOWCARD
Could you please tell me what are the services/facilities that you avail/use through Internet? [MA]
Services used Code
(R1) Checking office Emails 01
(R2) Checking personal Emails 02
(R3) Read News 03
(R4) Information search 04
(R5) Watching movies/listening to music online 05
(R6) Music/Movie/ video ringtones/ caller tunes/ Games Downloads 06
(R7) Online gaming 07
(R8) Online shopping 08
(R9) Online share trading 09
(R10) Online Air/ Rail ticket booking 10
(R11) Online bill payment 11
(R12) Chatting 12
(R13) Accessing job/career related sites 13
(R14) Access social networking sites (e.g. facebook, orkut etc) 14
(R15) Access blogs/blogging sites / forums on Internet 15
(R16) Others (Please specify) ______16
82
Section 7‐Demographics (Ask all the respondents)
Q1. What is your educational qualification? [SA] Code Route
Illiterate 01
Literate but no formal schooling 02
School‐Upto4 years 03
School‐5 to 9 years 04
SSC/ HSC 05
Some College (includes a Diploma) but not Grad 06
Graduate/ Post Graduate: General 07
Graduate/ Post Graduate: Professional 08
Q2. What is your Occupational Status? [SA] Code Route
Student 01
Public sector Executive 02
Private sector Executive 03
Businessman 04
Self Employed Professional 05
Housewife 06
Retired 07
Others, please specify 99
83
Q3. What is your marital Status? [SA] Code Route
Bachelor 01
Married, no kids 02
Married, with unmarried kids 03
Married, with married kids 04
Divorced/Widow 05
Q4. What is your monthly household income? [SA] Household Personal Q5. Income Income What is your own monthly income? [SA]
Upto Rs.10000 01 01
Rs.10000‐20000 02 02
Rs.20001‐30000 03 03
Rs.30001‐40000 04 04
Rs.40001‐50000 05 05
Rs.50001‐60000 06 06
Rs.60001‐70000 07 07
More than Rs.70000 08 08
Did not disclose 99 99
84
Instruction for programmer – Code in Q5 above should be less than or equal to that coded in Q4
Q6. Which all vehicles do you own? [MA] Code Route
2 wheeler 01
4‐ wheeler‐Hatch back car 02
4 wheeler Sedan car 03
4 wheeler SUV car 04
4 wheeler MUV car 05
None 06
Q7. Please take a look at this list and tell me which of these items do you have at Code Route home? (It could be owned by you, your family, or provided by the employer or it could be available in the house you live in; but it should be for the use of just you or your family)
INTERVIEWER TO EXPLAIN, IF NECESSARY:
We have a standard list of items that we use in all kinds of cities and villages. So don't worry if an item appears irrelevant for you or too ordinary‐just go ahead and tell me which items you do have. We need this information just for survey purpose only.
Do you have a ______(READ OUT THE ITEMS ONE BY ONE) in your home (which is in working condition)?
Does your family own any agricultural land, by agricultural land I mean land that is currently under cultivation or plantation?
Items owned / have access at home 85
[MA]
Electricity Connection 01
Ceiling Fan 02
LPG Stove 03
Two Wheeler 04
Colour TV 05
Refrigerator 06
Washing Machine 07
Personal Computer/ Laptop 08
Car/Jeep/Van 09
Air Conditioner 10
Agricultural Land (by agricultural land I mean land that is currently under cultivation or plantation?) 11
Q8. NUMBER OF STANDARD 11 OWNED (TOTAL NUMBER OF TICK MARKS)(AUTO CODE FROM Q34)
NUMBER OF STANDARD 11 OWNED (TOTAL NUMBER OF TICK MARKS)
(R1)
86
NEW SEC GRID
Chief Earner: Education Q1 of section 1 (Screener)
Illiterate Literate but School‐5 to 9 SSC/ HSC Some College Graduate/ Graduate/ no formal years (includes a Post Post schooling/ Diploma) but Graduate: Graduate: School‐Upto4 not Grad General Professional years No. of Durables (TRANSFER FROM Q46 ) 1 2 / 2a 3 4 5 6 7
0 E3 E2 E2 E2 E2 E1 D2
1 E2 E1 E1 E1 D2 D2 D2
2 E1 E1 D2 D2 D1 D1 D1
3 D2 D2 D1 D1 C2 C2 C2
4 D1 C2 C2 C1 C1 B2 B2
5 C2 C1 C1 B2 B1 B1 B1
6 C1 B2 B2 B1 A3 A3 A3
7 C1 B1 B1 A3 A3 A2 A2
8 B1 A3 A3 A3 A2 A2 A2
9+ B1 A3 A3 A2 A2 A1 A1
87
Q9. PROGRAM TO POST CODE SEC BASED ON THE GRID ABOVE Code Route
RECORD SEC OF THE HOUSEHOLD [SA]
SEC A1 01
SEC A2 02
SEC A3 03
SEC B1 04
SEC B2 05
SEC C1 06
SEC C2 07
SEC D1 08
SEC D2 09
SEC E1 10
SEC E2 11
SEC E3 12
Thank the respondent and terminate the interview