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Mobile Banking

In: Business and Management

Submitted By priyankaislam
Words 3733
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Literature Review:
1. Chapter Introduction: Literature review demonstrates the researcher’s knowledge and interest about a particular field of study, including key variables and phenomena, vocabulary, and its methods history. Before any research it is very important to do Literature review. Because the topic we are researching about, someone may done this research before. There are some reasons to do Literature review: To conduct a ‘preliminary’ search of existing material, to organize valuable ideas and findings, to identify other research that may be in progress, to generate research ideas, to develop a critical perspective. The literature review has been developed to discuss the fundamental concepts and key authors associated with the subject matter. It includes “mobile banking” and “opportunities and challenges of mobile baking” as these are directly representative of the academic discussion on the subject of investigation. As a literature review needs to be sufficiently critical in a balanced way, the literature review for this study aims to do in the discussion of the opportunities and challenges of the subject matter through impartial assessment of the relevant concepts.
1.1. Opportunity & Challenges of Mobile Banking:
1.1.1. Mobile Banking: Today is the era of fast forward life style. Everything we need or want, we want it in a minimum time. Like all other things we also need a fast forward banking. The result of it is mobile banking. Mobile banking means the ability of making deposits, withdrawal and to send and receive funds from a mobile account. According to the Journal of Information Engineering and Applications (Vol. 1, No.6, 2011), Mobile Banking is a financial transaction conducted by logging on to a bank's website using a cell phone, such as viewing account balances, making transfers between accounts, or paying bills and this can be conducted through the internet browser on the phone, through a program downloaded from your bank, or by text-message (SMS).
Since 2004, Dutch Bangla Bank Limited (DBBL) has introduced mobile and SMS banking. With a mobile phone, customers can perform many banking operations with their phone. According to Kalmadi and Shenoy (2009) “availability of Smartphone, high-speed 4G networks, and an increasingly mobile workforce has driven a huge number of people for using information-based mobile banking services. Such as transaction alerts and balance checks etc.” It’s the part of e-banking. It is still new in Bangladesh and it has many opportunities and challenges ahead as via mobile banking any one can access their personal account 24/7. This service offers to conduct transaction at their convenience, irrespective of location and time. Customers can easily review bills, for example, and make payments directly via the mobile channel. So it means bank can communicate with customers at any time. 1.1.2. Opportunities of Mobile Banking: The fast expansion of mobile companies in Bangladesh has opened new opportunities for the effective partnership of a bank with the telecommunication company. According to the report of Bangladesh Bank (July 2012), mobile companies which are operating in Bangladesh are now colleting utility bills through their many outlets. On an average of around half a million per, these outlets (including mini outlets) collect utility bills. These mobile companies also sell railway tickets on an average of 12000 per month (According to the report of Bangladesh Bank published July, 2012).
We can guess the revenue opportunity for a "mobile banking" services supplier is greater, and more direct. As people pay fees to Western Union to move money, but by mobile banking per-transaction fees are easy to measure. In Western Europe or North America, for example, mobile banking more often is used in place of an online session to check balances, rather than as a way to move money from person to person, or person to organization. That means "mobile banking" is clearer revenue generating activity and business in developing region, than in developed regions.
Mobile banking may offer the opportunity to build another channel beyond the bank branch and ATM network to enable millions to have easier access to the formal banking system. The limitations of typical banks such as space and time limitations can be removed by the mobile banking as we can check account balances, or transfer money from one account to another. These unique qualities are creating the popularity of the mobile banking. According to the report of Bangladesh Bank (July, 2012), Bangladesh Bank believes that fully developed MFS operations can reduce barriers of physical access and cost and over time enable a much higher proportion of the population to use basic formal sector deposit and payment services.
In a report of Bangladesh Bank, we found that now Bangladesh Bank has given the guidelines permit the following services, subject to specific bank proposals to and clearances-

1. Disbursement of inward foreign remittances
2. Cash in/out using mobile account through MNO’s outlets
3. Person to Business Payments (utility bill payments or merchant payments)
4. Business to Person Payments (salary disbursement, dividend and refund warrant payments, vendor payments)
5. Government to Person Payments (elderly allowances, freedom‐fighter allowances, subsidies)
6. Person to Government Payments (taxes, levy payments)
7. Person to Person Payments P2P (One registered mobile account to another registered mobile account)
8. Other Payments (microfinance, overdraft facility, insurance premiums, deposit pension scheme deposits)
By the end of the first quarter 2012 the fastest early expansion has come from BRAC Bank/bKash and DBBL that have the largest numbers of registered customers and agents those who are using mobile banking. According to a new study by Accenture (2009), banks enabling customers to use a mobile device to check balances, transfer money, and pay bills can achieve returns on investment as high as 300 percent. We also see financial services companies increasingly competing on application technology in order to attract and retain consumers. Clearly, financial services institutions have good reason to push for consumer adoption of mobile banking.
Now mobile banking is in the early stage of development. For that the newest providers are seeking to stabilize their technology, build new networks and acquire new customers. The Policy Paper by Bangladesh Bank (July, 2012) stated that BRAC Bank/bKash and DBBL aim are aiming for multi‐fold growth during 2012 which could push their combined customer accounts to between 2 and 3 million within a year’s time, possibly more. It is hoped that other providers entering the market might also grow and provide more alternatives and competition. It is still early and much more will be learned about MFS in Bangladesh over the coming year.
The potential of mobile banking in Bangladesh is huge. One of the greatest opportunities that mobile banking has that is the potential to bring many un‐banked into the formal financial sector and can also become critical infrastructure that lowers costs and raises productivity across the banking system and wider economy. Another one is the Bangladesh Bank can give the opportunity that the national payment system will be done through the mobile banking system. Treating mobile business as simply an extension to the traditional web could result in missing out unique differentiated qualities for new value-added possibilities. Journal of Information Engineering and Applications (Vol. 1, No.6, 2011) stated that mobile banking is considered to be one of the most value-added and important mobile service available.
According to Rasheda Sultana, across the developing countries like Bangladesh, millions of people rely on informal economic activity and local level networks to earn their living. Most of these populations are from bottom of pyramid and they don’t have access to basic financial services/banks as access to them is costly and very limited. However, the outstanding growth of mobile sector worldwide has created a unique opportunity to provide social and financial services over the mobile network. With over 4 billion mobile cellular subscriptions worldwide, mobile network has the ability to immediately offer mobile banking to 61% of the world population (Sultana, 2009).

1.1.3. Challenges of Mobile Banking: The first challenge is the lack of awareness about these services as people do not see mobile phones as a natural medium for banking. The main challenges would be to establish sound commercial agreements with the customers and also establish stable commercial relationships to use the wireless networks of mobile banking. The other challenge is to motivate agents and clients to begin to use the service more actively. One important challenge is maintaining quality and covering the high cost of mobile banking with large numbers of new accounts being opened. Another challenge is to overcome some weakness of it like lack of support for all handsets: there are different handset designs across 5-10 manufacturers, regulatory restrictions: there are limits on the size of transactions, security risks: Trojans and other viruses are evolving rapidly in mobile banking services, lack of support in local languages. According to Bamoriya & Singh, mobile banking is a revolution that is driven by the world's one of the fastest growing sectors mobile communication technology. Like in any emerging technology, there are many barriers to the adoption of mobile banking services. This study explores the issues in mobile banking perceived critical for adoption by both mobile banking users as well as non-users. The study identified certain issues pertaining to banks, mobile handsets and telecom operator’s viz. mobile handset operability, security/privacy, standardization of services, customization, Downloading & installing application software and Telecom services quality. Study suggests that from consumers' perspective mobile handset operability, security/privacy and standardization of services are the critical issues. So, to overcome these critical issues will be the challenge for mobile banking.
To overcome the risk of security is one of the important challenges. Hickman (2008) said that, Security can be an issue with mobile banking although there are a unique number of users can be given by government regulations with which cell phone providers must comply. But fraud protection must be developed within the cell phone company. Network security is out of the control of the bank as well as data access and use. It is more difficult to verify a customer's identity with mobile banking. Mobile banking allows for little to no customer contact. Money laundering is also a concern, as with traditional banking, and must be closely monitored. Comninos et al. (2008) suggested that consumers will only transact electronically (online/mobile banking) if there is convenience and security. Further Sharma and Singh (2009) found that mobile bbanking users are specially concern with security issues like financial frauds, account misuse and user friendliness issue - difficulty in remembering the different codes for different types of transaction, application software installation & updating due to lack of standardization

1.2 Literary Framework in Summary: The literature review above covers mobile banking, opportunities and the challenges of mobile banking from the Bangladesh’s perception. Based on this literature review, a literary framework has been developed below to precisely address the research requirements.
Investigation on opportunities and challenges of mobile banking is the aim of the project. To achieve this research aim this study is required to address the opportunities of mobile banking, challenges of the mobile banking and implementations of mobile banking in Bangladesh’s banking sector.
The literary framework is to study the opportunities and challenges of mobile banking from the Bangladesh’s perspective. In this section findings of the literature review have been included in a summarized form.
Mobile banking (also known as M-Banking, m-banking) is a term used for performing balance checks, account transactions, payments, credit applications and other banking transactions through a mobile device such as a mobile phone or Personal Digital Assistant. Mobile Banking refers to provision and availment of banking- and financial services with the help of mobile telecommunication devices. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information.
According to this model Mobile Banking can be said to consist of three inter-related concepts: * Mobile Accounting * Mobile Brokerage * Mobile Financial Information Services
Mobile banking services in Bangladesh are gaining popularity. Like other banking services it also has some opportunities and challenges. Our objective is to find out the opportunities and challenges of mobile banking in Bangladesh’s perspective. Mobile banking enables banking services like balance checks, domestic and international fund transfers, credit applications, bill payments and so on through mobile devices. It has opportunities of collecting renitence, person to business payments, business to person payments, person to government payments, government to person payments and many more. It has challenges like establish awareness of people, enhanced security; maintain a high quality of service and to reduce high cost of it. To achieve these objectives requires data collection from the banks those are introducing mobile banking service as well as those banks those already implemented that. Also we have to do survey to find out the customers reaction, their opinions and point of views about the mobile banking service in Bangladesh
1.3. Chapter Conclusion:
The literature review of this chapter guided to develop theoretical framework for this study which was included at the end of this chapter. The next chapter is to select the appropriate research methodology to meet the research aim properly.

2. Methodology:
2.1. Chapter Introduction: Methodology defines and selects the appropriate rules and procedures to conduct a research. A research project needs to be guided from the beginning to the end by the research plan based on the methodology. Attainment of the research aim has to be recognized and thus it is important to follow an established research process. This chapter discusses and selects the research methodology to achieve the research aim following a systematic and recognized research plan.
2.2. Brief Overview of the Chapter: This chapter is to select a set of appropriate research tools and techniques to properly achieve the research aim of this project. ‘Introduction to methodologies’ section will discuss the available research tools and techniques. ‘Research Background’ section will briefly discuss the research requirement for this study. ‘Research Design for the Project’ section will select the research tools and techniques after establishing rationale for particular selections. ‘Data Collection and Analysis’ section will discuss what type of data will be collected and how the collected data will be analyzed.
2.3. Introduction to Methodologies:
2.3.1. Research Approach: In reference of the concept proposed by Saunders et al. (2009) discussed two research approaches – Inductive and Deductive. * Inductive Research Approach: Inductive research approach proposes the development of the theory based on the analysis of empirical data. To develop a theory, inductive research approach is functional. It generates qualitative data. It has flexible structure and thus allows in bringing changes in the research process, if necessary.

* Deductive Research Approach: Deductive research approach begins with the existing theoretical concepts and suggests theory assertion or amendment by putting it in the empirical parameters. To verify an existing theory, deductive research approach is functional. It generates quantitative data. It is highly structured and thus little scope in bringing changes in the research process, if necessary.

In addition, Saunders et al. also described the method of qualitative and quantitative research approaches.

* Quantitative Research Approach: Quantitative research approach is applied when the empirical data are numeric in nature, where collected data are analyzed using MS excel or SPSS kind of mathematical and statistical tools.

* Qualitative Research Approach: Qualitative research approach is useful when collected empirical data are non-numeric kind such as words and pictures, where the data analysis essentially depends on a self perspective and judgment of the researcher.

2.3.2. Research Strategy: Research strategies discussed by Saunders et al. (2009) are mainly sample survey, experiment research, archival analysis, and case study. The descriptions are given below- * Experiment research: Experiment research is a classical form of research, which attempts to maintain control over the relevant variables of the experimental conditions. Experiment research strategy is more considered in the study of pure science, but it is also applicable in the study of social sciences.

* Archival analyses: Archival analysis is primarily a research strategy based on secondary data where existing data in documents, reports, and databases are analyzed to achieve the aim of the research.Yin (2009) suggested that the research strategy for the analysis of ‘what’ question is archival analyses. It is a kind of observational method where the examination takes place by analysing documents, archives, books, magazines, newspapers, etc.

* Ethnography: Ethnography is a research strategy that interprets the social world as done in anthropology is ethnography, which is also more suited to the inductive approach (Saunders et al., 2009). This research strategy is time consuming, as it requires an observation of the subject for a relatively long time span.

* Survey: Survey means frequently used strategy in management studies and practices. It collects data from a sample of the population to come into a conclusion, which would be applicable to that specific population (Saunders et al., 2009). Survey mostly associated with the deductive approach. The main tools of data collection in the survey are structured or semi-structured questionnaires, structured observation and structured interview with standardised questions. Data collection is relatively economical. Computer programmes such as MS Excel and SPSS facilitate the analysis of collected data. However, the entire process, including survey design, questionnaire setting, and collected data organising, is time consuming. * Case study: Denzin and Lincoln (2005) suggested that for the type of qualitative research the research strategy is “case study”. More appropriate for the understanding the existing dynamics of something of a single setup (Eisenhardt, 1989). More precisely, it is a more appropriate research strategy to study the facts of a real-life circumstance where the facts and surroundings are not clearly differentiable (Yin, 2009). Case study research strategy is mostly functional for the research questions that start with ‘how’ or ‘why’ to find answers about particular incidents that remain beyond the control of the researcher. The case study research strategy is more appropriate in a context on which researcher has little or no control, but requires to study the setup comprehensively. In addition to single case, multiple cases can be engaged applying embedded research design where both qualitative and quantitative data are simultaneously applicable (Yin, 2009). However, the major drawback is that it is too much situation-dependent, and therefore bears less validity for scientific generalisation (Yin, 2009).

2.4. Research Design for the Project:

2.4.1. Research Approach for the Project: The project aims to study opportunities and challenges of mobile banking in Bangladesh and therefore deductive research approach is suitable. Moreover, consumers of the banking industry will be approached for data collection through questionnaire survey from where numeric empiric data will be collected and therefore quantitative research approach is suitable.
2.4.2. Research Strategy for the Project: The research project is to know about mobile banking and to describe the opportunities of mobile banking in the perspective of Bangladesh. Also the research project is to identify the challenges of mobile banking in the perspective of Bangladesh and to identify ways of more effective implementation of mobile banking in Bangladesh. The research strategy chosen for this project is ‘survey’. The underlying principle behind this is that the study is to investigate the opportunities and challenges of the mobile banking industry of Bangladesh where the researcher has little or no control over the banking industry and its consumers. And also data collection is relatively economical. Computer programmes such as MS Excel and SPSS facilitate the analysis of collected data. However, the entire process, including survey design, questionnaire setting, and collected data organising, is time consuming.

2.5. Data Collection and Analysis:
Saunders et al. (2009) described both secondary data and primary data regarding the sources of data collection. * Primary Data Collection: Primary data are those which are collected by the researcher directly from the sources. Questionnaires, interviews, observations are the types of primary data collection methods. Primary data collection is a laborious, expensive, and time-consuming process.

* Secondary Data Collection: Secondary data are those which are collected by other researchers and institutions to meet the other research aims. This is one of the weaknesses of secondary data, as data for one purpose could be similar to the data needed, but would not fit with another purpose. However, the strengths of secondary data are that these are cheaper, quicker, and more readily available. Secondary data sources are mainly books, articles, journal publications of previous studies, and the internet search. Both authentic and “not that” authentic data remain side by side in secondary sources, and it is difficult to separate authentic data from “not that” authentic ones.
The purpose of this research study is to investigate the opportunities and challenges of mobile banking in the perspective of Bangladesh. To achieve this research aim, two types of data are necessary to collect: 1) data on more effective implementation of mobile banking in Bangladesh and 2) data on consumer perception about the opportunities and challenges of mobile banking. For the first type, data are needed to collect from secondary sources such as documents, reports, newspaper articles on banking industry of Bangladesh and the innovation strategies and implications of the mobile banking. For the second type, data are needed to collect directly from a representative sample of customers of the banking industry through questionnaire survey and therefore data gathered will be primary data.
Closed ended and open ended both questionnaire will be developed so that a precise but effective answer can be found with a minimal effort of the respondents. Number of questions in total is fifteen where ten questions are close-ended and five questions are open-ended including eleven questions that are directly related to the objectives of the research. Preliminary sample size for questionnaire survey based primary data collection from consumers is around 30 that are selected on random sampling basis. In front of the different banks and the branches of different banks, consumers will be approached to fill the questionnaire. As the major part of empirical data is quantitative in nature, the analysis will be carried using the computer-based statistical package such as MS Excel.

2.6. Chapter Conclusion: This chapter discussed and selected research methodology. Under deductive research approach the study selected case survey research strategy to achieve the research aim collecting data from the consumers of the banking industry of Bangladesh using questionnaire data collection tool which produced quantitative data that were analyzed using MS Excel in the following chapter.

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