The Impact of Mobile Banking on the Emerging Asian Countries

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Study the impact of mobile banking on the emerging Asian countries. RESEARCH HYPOTHESIS:
The adoption of the channel of mobile banking model would increase overall profitability and increase the reach of customer base of banks in Asian countries. RESEARCH OBJECTIVE:
The objective of the research is to understand the potential of mobile banking in emerging Asian countries. It extends to understanding the models which have been successful in various developing countries keeping in view the regulatory frameworks which exist in those countries and how they can be implemented in the potential countries. The research also examines the drivers which have led to success and the challenges faced which act as roadblocks to implementation of mobile banking.


Banking today is undergoing a radical transformation. The symptoms are obvious; new products, new players, new channels are appearing daily. This transformation is taking place across all sectors of the banking industry. Information technology is one of the major issues on any bank chief executive’s agenda, thrust into prominence by the massive and increasing magnitude of its costs at a time when competitive pressure has never been greater. M-banking/M-payments systems have all the markers of an innovation waiting to be diffused to or adopted by a subset of mobile users in the developing world. South Asia is one of the fastest growing regions in terms of mobile phone subscriber. Projections show that the maximum number of transactions would be form the South Asia and China region by 2011. Financial institutions, which have had difficulty providing profitable services through traditional channels to poor clients, see M-banking/M-payments as a form of “branchless banking”. Government regulators see a similar appeal but are working out the legal implications of the technologies, particularly concerning security and taxation. There are certain lessons which need to be incorporated by the potential Asian countries and overcome the insecurities and apprehensions that clog the minds of the M-banking consumers.


Mobile banking (also known as M-Banking, SMS banking etc.) is a term used for performing balance checks, account transactions, payment, etc via mobile device such as mobile phones. Mobile banking today is most often perform via SMS or mobile Internet, but can also be used by special programs called clients downloaded to the mobile device. Mobile banking (M-banking) involves the use of a mobile phone or another mobile device to undertake financial transactions linked to a client’s account. M-Banking is one of the newest approaches to the provision of financial services through ICT, made possible by the widespread adoption of mobile phones even in low income countries. The roll out of mobile telephony has been rapid, and has extended access well beyond already connected customers in developing countries.

Several recent studies indicate strong consumer interest in mobile banking. They also reveal that mobile banking is still in its infancy around the globe. A recent Sybase Inc. research indicates that mobile banking service is almost twice as prevalent in Asia-Pacific, with 15.4percent of those surveyed in the region reporting to have used a mobile phone to check their bank balance in the past three months. This compares to just 8.7percent in the Americas and 7 percent in Europe - showing a disparity between the demand for mobile banking services and availability of these services.

South Asia is one of the fastest growing regions in terms of mobile phone subscribers. The mobile phones are already transforming lives of people here for the better by enabling people to ‘leapfrog’ (Alexander, 2009). Mobile phones play a prominent role in...
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