A Study On Growth of Mobile Banking in India During Covid-19
A Study On Growth of Mobile Banking in India During Covid-19
A Study On Growth of Mobile Banking in India During Covid-19
Dr. Varsha Agarwal, Shresth Poddar, Sahil J Karnavat,-- A Study on Growth of Mobile
Banking in India During COVID-19 -- Palarch’s Journal Of Archaeology Of
Egypt/Egyptology 17(6), ISSN 1567-214x
ABSTRACT
Banking has transformed from the traditional brick-and mortar prototype to modern day
mobile banking which has enabled the customers to reach their banks virtually through
Mobile phones and avail services anywhere and at any time within the click of a button.
Mobile banking has provided innovational ways of conducting balance enquiries, online fund
transfers, utility payments and other services with the help of a simple mobile handset. The
constant developments & improvements in the fields of Information & technology have given
rise to a number of enhancements in the product & service designing and their supply in the
banking sector. The use of M-Banking is increasing with the addition of multiple services
provided by the Banks as the customers find it very easy to pay their electricity bills, perform
mobile recharges ,conduct immediate transfer of funds and much more Singh, N; Srivastava,
S; Sinha, N (2017) The launch of various Mobile banking apps like ICICI iMobile, HDFC
Mobile Banking, SBI's YONO App etc. has proven to be the game changer across the globe
and has forced the customers to shift to banks that provide M-Banking Services. The GOI has
also extended its support to the mobile wallets through its partnership prototypes with various
banks to increase the acceptance of M-Banking among the users. RBI has also been
promoting the digital payments through Mobile Wallets during the Covid-19 pandemic as it
would ensure the social distancing norms as well as the flow of transactions at the same time
without causing any exposure to the virus Dr. Jain, A; Dr. Sarupia, A; Kothari, A (2020)
After demonetization, the Covid-19 pandemic is the second largest situation that has led to a
5% growth in the mobile banking just in a period of 3months from January to March
2020(Statista) and is further expected to grow even more. Hence this study is aimed towards
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identifying the growth in the mobile banking during Covid-19. The research also intends to
study how significantly these online transactions have helped during the Covid-19 pandemic.
INTRODUCTION
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REVIEW OF LITERATURE
1. (Deshwal, 2015) in her, study discussed about how mobile phones have
been immensely providing financial services in India and its contribution to
the economic growth at reduced costs. She believes that a good way to
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banking in India. Since, the demonetisation India has seen a rapid growth in
the technology infrastructure. Due to the lack of privacy concerns and
information policies in India customer tend to turn down after a certain
period of time. Companies need to focus more on the individual security and
serve them according to the demand and usability. India has a very
fragmented mobile money market in post demonetisation, the new adopter
to the new method of payment were from varied classes. From my search of
the literature, it is clear that the government and the fintech giants should be
able to reassure the customers in making use of digital payment platforms
instead of cash.
16. (Kumar, Mathur, & Lal, 2013) Their study talks more about delivering
the financial literacy among the people and gain the confidence in order to
so that companies increase their customer base. Indian societal belief system
is very different from the western world, here capitalist need to understand
the relevance. India will adapt the changes but it will take long duration as
their study concludes.
17. (Zhang, Lu, & Kizildag, 2018) After an initial overview of related
work, we examine specific prior work on Banking “on-the-go” their paper
aims to analyse the factors that affect the acceptance and involvement of the
customer who use the mobile banking. According to finding customers are
slowly and gradually positively developing trust towards mobile banking
services. Customers are majorly concerned about the fraudulent activities,
reliability in the transacting platform and especially the privacy of their
personal data. In the near future the financial institutions will be more
personalised and utility product with the advent of new fintech start-ups.
Therefore, for the banking companies and the new payment banks they have
to be more user centric so that wide range of people opt for the mobile
banking services.
18. (Singh, Srivastava, & Sinha, 2017) The study mainly focuses on the
preference of North Indian, acceptance of mobile wallets by them. The
research finding tells us that those set of population have accept mobile
wallet as good platform for transaction as it is user friendly approach,
secure, convenient and reliable. In their opinion north Indian find it
convenient and ease in using the mobile apps as it saves their time, cheap,
they adapted easy in their lifestyle and have apps like Paytm and GooglePay
give them offer on certain number of transactions. The important aspect
which their study tells us that is gender, it is key variable in the preference
and usage of mobile banking services as males use more services compared
to females. They also found that usage is increasing as the new services are
continuously being added by the mobile wallet’s companies, customers find
it easy to pay their electricity bill, mobile recharge immediate transfer of
funds and many more.
19. (V & Manu, 2020) We briefly review the body of related work that is
available on the “Impact of COVID-19 on Mobile Banking services”, this
study finds that in India there is huge demand for GooglePay and due to this
pandemic, it has shown a significant rise in its useability and reliability.
COVID has disrupted the lives, social reach and also have affected the
economy in the short term. People in India are facing many problems due to
immediate shutdown, necessities were needed to meet and transactions were
done through mobile apps with modernized services. Their study says this
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by banks to their customer is a good utility tool and educating them about
convenience and ease of usage will benefit all of us.
30. (V & Babu, 2019) their study focuses on the mobile banking
technology that is increasing rapidly in India since January 2018. The main
factors that affect the growth of mobile banking is security, crash in
network, need improvement in mobile devices, and standardization.
According to them M-banking has been very easily accessible to customers,
promotes digital currency and paperless transactions and customer are
widely offered few coupons and recent offers during peak seasons. They
also identified that there are many mobile devices that do not support the
advance technology application so companies need to have mobile devices
accessible.
31. (Gujrati, 2017) in her study she has focused on Digital India
programme being the root cause of Paperless Economy. She also stated that
government took steps to increase the transparency of transactions
happening on daily basis. To promote this objective government took steps
like demonetization and started promoting online payment system which
also helped small retailer to get into the system. India took time at initial
stages as small retailer didn’t had enough funds to establish resources to
establish the digital payment systems but now it has grown to a very large
extent.
32. (Lakshmi, Gupta, & Ranjan, 2019) they identified that UPI payment
are the main selling point for all the payment services providers, the mobile
pin security has improved over the years and customer find it easy to have
transaction.
RESEARCH GAP
RESEARCH METHODOLOGY
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RESEARCH OBJECTIVES: -
1) To study the effect of Covid-19 on the mobile banking services
2) To understand the shift from physical banking transactions to mobile
banking transactions during Covid-19
3) To study how m-banking can promote social distancing policies
RESEARCH QUESTION
1) How effectively has mobile banking grown during COVID -19?
RESEARCH MOTIVATION
We were highly motivated to find the outcome of this research as we could
now understand how Covid-19 had transformed the banking nature & its
infrastructure. The whole research gave us an insight so as to how the
customers were adopting towards mobile banking services to follow the
social distancing norms as well as make their obligatory payments without
holding back from the fear of the deadly virus.
SOURCES OF DATA
Secondary data have been collected through online articles on livemint,
economic times, RBI reports, journals, newspapers etc. to review the
literatures and understand theoretical backdrop of mobile banking in India,
both Pre COVID-19 and During Covid-19.
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felt that it was the need of the hour to boost the mobile banking sector in
India in order to tackle the issue of acute shortage of cash.
1600
Transactions (in millions)
1100 2014-2015
1000 2015-2016
2016-2017
624
2017-2018
400
0
Years
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As per the above graph, it is evident enough that even though mobile
banking was introduced much before the demonetization move in India, the
growth in the same was very stagnant. The pre demonetization period shows
us a minimal growth in the mobile wallet transactions each financial year.
There was a minimal growth of 19mn transactions in mobile wallet
transactions from FY13 to FY14. But after the launch of Digital India in
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2015, with the help of integrated technologies and the internet, mobile
wallets slowly started picking up and projected a larger growth in the
volume of transactions compared to the corresponding previous year.
Further after the announcement of Demonetization in the year 2016, Mobile
wallets like Paytm and Phone Pe gained momentum and the growth in the
mobile wallet transactions increased ever since.
Paytm became best alternative of cash for the country in times like
demonetization. Many Shopkeepers, vegetable vendors, petrol bunks started
accepting payments through Mobile wallets like Paytm, Phone Pe etc.
Paytm witnessed an increasing trend of 435% in its traffic, 200% growth in
the app downloads and a rise of 250% in the overall transactions volume
and their value.
M-banking will be the new normal to many industries and businesses after
COVID -19. It is very challenging for many countries as it was in 2008
crisis, we need to accept the digital change and innovate the way of
transaction with the new M-banking application that emerging Fintech
company serves. Banks need to build the trust, create the digital and safe
environment for digital banks, make customers aware with the helpful use
of it.
Due to shut down there was very less physical transaction done as it was not
safe to withdraw money and even for banks to accept deposits. RBI report
says, ATMs stood at over 91% of their full capacity which means there was
need to refill the cash in 91% of machines. Slowdown in the deposits grew
up to 7.98%. According to RBI, 15.5 lakh crore of outstanding debt in the
market has been affected, retail and wholesale trading were hault, more than
19 Sectors were affected. Top five affected sector were port and services,
aviation, construction, mining and mineral, retailing done by corporate all
sectors affect banking at very high rate.
We are living in a digital world and India being a developing country here
banks had a very advantage of promoting mobile banking, although India is
having online banking internet infrastructure since very long but it was
adopted by majority of customers that bank managed with them. Banks are
now supporting customers guiding them personally for their needs. Many
people who were reluctant to move to mobile banking application are now
considering the shift as an easy mode. Mr. Niraj Mittal says, there has more
29% more transaction in Q1 2020 from Q1 2019 as corporate and retailer
have higher issuance rate from bank accounts to mobile wallets.
Developing countries like India are very beneficial as more and more
Fintech company are investing in banks and with the help of their internet
infrastructure and technology banks will be able to serve customers with
better facility and more secured transactions. In this new normal period, we
are experiencing a new network environment where everything is available
on our fingertips. We are seeing much faster and reliable transaction pattern.
Mobile banking has brought a very significant increase in number of users
after lockdown as mobile application has been more customized and made
more user friendly like Paytm, Yono (SBI), PayZapp and many more.
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₹59,938.09
January February March April May June
₹52,584.60
₹52,136.78
₹52,019.91
65,000.00
₹48,551.28
55,000.00
₹36,403.11
45,000.00
35,000.00
16,188.00
14,622.03
14,402.70
14,284.28
13,830.33
25,000.00
11,276.04
15,000.00
5,000.00
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From the
above graph we can infer that there has been a increase of 4% in duration of 4 months i.e.
January to April. The major reason after lockdown in march as it shows in just span of 1
486.7 500.9
500 469.3
448.2
420.7
390.9
400
351.6
300 281.81
242.92
200
100
(Keelery, 2020) India is the second largest base for internet users. From the above graph we
can depict that from 2015 the number of users having mobile internet is increasing at 16% in
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the year 2015-16 and so on in further years. This graph also tells us the estimate of users in
Smartphone Users
40.00%
36.20%
34.10%
35.00%
31.70%
29.80% 29%
30.00%
26.30% 26%
25.00% 23.20%
21.20%
20.00%
15.00%
10.00%
5.00%
0.00%
Passport and various other services through smartphones. This effort has
increased the number of smart phone base in India after launch of Digital
India Programme.
According to a report of Gadget 360 NDTV (Studio, 2020), there has been
15% increase in the smartphones market after 2018. A study of techARCh,
states that in December 2019 almost 77% of Indian were having
smartphones and they are using all the wireless services. There are top
brands acquiring 25 to 41% of market by offering different range of
smartphones from budget phone to luxury phone brands. Factors like good
quality, budget friendly and new features attract the customer a lot.
7000 2012-2013
Transactions (in millions)
6200.32
6000 2013-2014
2014-2015
5000
2015-2016
4000
2016-2017
3000 2017-2018
1872.26 2018-2019
2000
976.85 2019-2020
1000 386.6
53.3 94.7 171.9
0
Years
Source: RBI
According to the above data from RBI Reports, it can be observed that the
growth in the number of mobile banking transactions in the years 2012-2014
have been very minimal. But after the launch of the Digital India program in
the year 2015, there was a sudden increase in the number of transactions i.e.,
386.6mn in 2015-2016, almost double than that of the previous year i.e.,
171.9mn transactions in 2014-2015. Later in the year 2016-2017 mobile
banking transactions grew from 386.6mn transactions in 2015-16 to
976.85mn transactions. The post demonetization period has shown
increasing trends in the number of mobile banking transactions when
compared to the pre demonetization period. It is believed that
demonetization was one of the catalysts for mobile banking in India.
Followed by the COVID-19 pandemic in India, Mobile Banking
transactions in the month of Jan 2020 were 14,402.70 lakh (1440.27 mn)
and in June it shooted up to16,188 lakh volume of transaction. The total
number of transactions from Jan 2020 to June 2020 were 84602 lakhs
(8460.2mn) (Source: RBI Combining all 354 banks of India recognized by
RBI of Public and Private sector). Hence COVID-19 is considered as one of
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CONCLUSION
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