Deployment and Change Delivery Handling in Mobile Banking For ING Vysya Bank Ltd, Bangalore

A Report on Project Work In Masters of Business Administration By Rajaram R 215112047

DEPARTMENT OF MANAGEMENT STUDIES NATIONAL INSTITUTE OF TECHNOLOGY TIRUCHIRAPPALLI-620015

JULY 2013 1

BONAFIDE CERTIFICATE
This is to certify that the Summer Project Report titled Deployment and Change Delivery Handling in Mobile Banking is a bonafide record of the work done by,

Rajaram R (215112047)

Studying MASTER OF BUSINESS ADMINISTRATION in the DEPARTMENT OF MANAGEMENT STUDIES, National Institute of Technology, Tiruchirappali, during the academic year 2012-2014.

Mr.M.Sezhiyan Internal Guide Department of Management Studies, National Institute of Technology, Tiruchirapalli-15.

Dr. N Thamaraiselvan Head of the Department Department of Management Studies, National Institute of Technology, Tiruchirapalli-15.

Project Viva-Voce held on ..

Internal Examiner

External Examiner

ACKNOWLEDGEMENT

The delight and contentment that follow the successful completion of any task would be incomplete without mentioning the people who has made it possible. I thank Mr. Vishal Dalmia , Product Manger Head Internet and Mobile Banking, for providing me an opportunity to work on the Mobile Banking arm under alternate channels at ING Vysya Bank Ltd. A very special thank to Mr. Padmanabhan T A, Product Manager Mobile Banking who was with me during every step guiding us all along the way and showing tremendous support and boosting confidence which has enabled me in completing the project successfully. I also earnestly thank Mr. M Sezhiyan, Professor (DOMS) my faculty guide for his kind support in helping me through the various stages, his attention, care and guidance have been instrumental in meeting the objectives of the project. It was my privilege to be under such a veteran. I thank Dr. N Thamaraiselvan, Head Department of Management Studies (DOMS) for providing me an opportunity to do the project.

Rajaram R

Table of Contents
BONAFIDE CERTIFICATE .......................................................................................................... 2 ACKNOWLEDGEMENT .............................................................................................................. 3 EXECUTIVE SUMMARY ............................................................................................................ 7 LITERATURE REVIEW ............................................................................................................... 8 COMPANY PROFILE ................................................................................................................. 13 Vision ........................................................................................................................................ 15 Mission...................................................................................................................................... 15 Business Volume ...................................................................................................................... 15 Number of Employees .............................................................................................................. 15 Operations in various sectors .................................................................................................... 15 ING Vysya Life Insurance Company Limited .......................................................................... 15 ING Investment Management ................................................................................................... 16 a. Mutual Fund ................................................................................................................... 16 b. Portfolio Management Services.................................................................................. 16

ING Retail Banking .................................................................................................................. 16 i) Consumer Assets .............................................................................................................. 17 ii) Retail Liabilities .............................................................................................................. 17 iii) Business Banking: ........................................................................................................... 21 iv) Agri and Rural Banking: ............................................................................................... 22 Vys Dairy .............................................................................................................................. 23 Swarojgar Credit Card Scheme (SCC) ................................................................................. 23 Vys Mahindra........................................................................................................................ 23 Vys Krishi ............................................................................................................................. 23 Agri Business Loans Trade (Agri BLT) ............................................................................... 23 Rural Housing ....................................................................................................................... 23 Produce Loans ....................................................................................................................... 23 House Loan ........................................................................................................................... 23 Bhoomi Link ......................................................................................................................... 23 4

v)

Alternate Channels: .................................................................................................... 24

MOBILE BANKING .................................................................................................................... 26 Mobile Banking in India ........................................................................................................... 27 Scope of mobile based banking in India ................................................................................... 27 OBJECTIVE OF THE PROJECT: ............................................................................................... 29 PHASE I........................................................................................................................................ 30 Analysis of features in other banks and finding target group ....................................................... 30 a. Comparison of mobile banking features offered by private banks in India ................... 30 b. Identification of Potential Customers within ING:..................................................... 32

PHASE II ...................................................................................................................................... 41 ING Mobile banking application and process involved before moving to production............. 41 ING VYSYA MOBILE BANKING APPLICATION .......................................................... 41 Need for new mobile banking application: ........................................................................... 41 Services provided in new application: .................................................................................. 42 Why to launch with iPhone/iPad? ......................................................................................... 43 Hybrid Applications: ............................................................................................................. 43 Interacting with other team for changes and deployment of the application ........................ 44 Integration of services with Internet Banking ....................................................................... 44 Problems and solutions ......................................................................................................... 45 PHASE III ..................................................................................................................................... 46 ING Mobile banking promotion Management and Campaigns ................................................ 46 SMS Campaign ..................................................................................................................... 46 E-mail Marketing .................................................................................................................. 46 Interactive Voice Response (Phone Banking) ...................................................................... 46 Missed call Marketing........................................................................................................... 47 Posters/Pamphlets ................................................................................................................. 47 Branches ................................................................................................................................ 47 Facebook Campaign.............................................................................................................. 47 Google Ads ........................................................................................................................... 47 Tech Blogs and Forums ........................................................................................................ 48 Content for ING Mobile Banking Application ......................................................................... 48 5

Creation of MIS ........................................................................................................................ 48 Project Planner .......................................................................................................................... 48 PHASE IV ..................................................................................................................................... 49 Recommendations for Alternate Channel Payments ................................................................ 49 Emerging Trends in Banking Industries ................................................................................... 49 i) Mobile Point of Sale (MPoS): ........................................................................................ 49

ii) Near Field Communications in Payments: ..................................................................... 59 iii) Instant Cash on Mobile(mCash): ................................................................................... 70 CONCLUSION ............................................................................................................................. 74 Annexure 1: ................................................................................................................................... 75 Annexure 2: ................................................................................................................................... 76 Annexure 3 .................................................................................................................................... 79

EXECUTIVE SUMMARY

ING Vysya has come up with an idea of launching mobile banking application with services and features that are currently available in Internet Banking. It had also come up with many new innovative services and features making it to be the first in India to launch such a feature rich mobile application. User Interface is also developed in a way that it completely differs from net banking and allows the customer to enjoy all services through mobile banking. The objective of the study is to analyze about various mobile banking applications in India and assisting ING mobile banking team to successfully launch the application to the customers, which involves understanding and preparing function documents, Admin documents for other departments and also to train them for providing service to the application after it takes off, testing the application in UAT and production level for any issues and coordinating with the application team to arrive at a hassle free app. After the launch of application to customers, the next objective is to market it in such a way that each and every potential customer makes use of this application for future banking purposes. A detailed study is conducted to know the customers preferences in mobile, product and location and to carry out an effective marketing campaign to focus on those customers and deliver the product to the end customers thereby creating a need for increased use of mobile application for banking transactions compared to other banks in India.

LITERATURE REVIEW

Literature reveals that abundant research on electronic banking has focused on Internet banking (also called online banking), whereas research focusing on mobile banking is relative little and receives underrated attention [Suorantia & Mattila 2004; Laukkanen & Pasanen 2008; Puschel et al. 2010]. By employing innovation diffusion theory (IDT) and the decomposed theory of planned behavior (DTPB), Brown et al. [2003] surveyed 162 respondents and discovered that perceived advantages, the opportunity to try out cell phone banking, the number of banking services required by respondents and perceived risk significantly influenced people to adopt mobile banking. Lee et al. [2003] performed eight interviews to collect transcripts from participants and concluded that relative advantages and compatibility were positive factors affecting the adoption of mobile banking, perceived risk was negative factor affecting the adoption of mobile banking, and consumer previous experience and self-efficacy generalized their beliefs (a negative or positive attitude) toward the adoption of mobile banking. Suoranta and Mattila [2004] took the Bass model of diffusion to separate 1253 respondents into non-users, occasional users, and regular users according to their mobile banking usage experience and density. The Bass diffusion model assumes that potential adopters of an innovation are influenced by two types of communication channels: mass media and interpersonal word-of-mouth, and the adoption rate can be described by S-shaped diffusion curves. Accordingly, Suoranta and Mattila [2004] empirically identified that interpersonal influence was over mass media in affecting users to adopt mobile banking. Contrasting to the study of Suoranta and Mattila [2004], Laforet and Li [2005] surveyed 128 respondents randomly selected in the city streets and indicated that awareness significantly influenced the adoption of online and mobile banking, while consumer awareness was effectively increased through mass media rather than word-of-mouth communications. Given that the reference group did not significantly affect the adoption of online and mobile banking, Laforet and Li [2005] thus contended that mass media was much more important than interpersonal word-of-mouth in affecting people to adopt mobile banking. By adding one trust-based construct and two resource-based constructs, Luarn and Lin [2005] employed the extended technology acceptance model (TAM) to explore human behavioral intention to use mobile banking. They collected 180 respondents in Taiwan and discovered that 8

perceived self-efficacy, financial cost, credibility, easy-of-use and usefulness had positive effects on the behavioral intention to use mobile banking. Likewise, due to the parsimony and predictive power of TAM, Amin et al. [2008] used an extended TAM containing five constructs - perceived usefulness, perceived ease-of-use, perceived credibility, the amount of information, and normative pressure - to explore the adoption of mobile banking. They gathered 158 valid questionnaires in Malaysia and supported that perceived ease-of-use markedly influenced perceived usefulness and credibility, and human intentions to adopt mobile banking was significantly affected by perceived usefulness, perceived ease-of-use, perceived credibility, the amount of information, and normative pressure. Drawing from the theory of innovation resistance proposed by Ram and Sheth [1989], Laukkanen et al. [2007] summarized 18 factors into five barriers, namely Usage, Value, Risk, Tradition, and Image barriers. The theory of innovation resistance, adapted from the psychology and the IDT of Rogers [Rogers 2003], aims to explain why customers resist innovations even though these innovations were considered necessary and desirable. Through investigating 1525 usable respondents from a large Scandinavian bank, Laukkanen et al. [2007] uncovered that the value and usage barriers were the most intense barriers to mobile banking adoption, while tradition barriers (such as preferring to chat with the teller and patronizing the banking office) were not an obstacle to mobile banking adoption.

Table 1: Empirical and theory-based empirical research in mobile banking adoption Authors Brown et al. [2003] Theories IDT and DTPB Sampling & Countries 162 questionnaires collected from convenience and online sampling in South Africa 1253 samples drawn from one major Finnish bank by the postal survey in Finland Main Findings Relative advantage, trialability, number of banking services, and risk significantly influence mobile banking adoption. Information sources (i.e., interpersonal word-of-mouth), age, and household income significantly influence mobile banking adoption. Awareness, confidential and security, past experience with computer and new

Suoranta and Mattila [2003]

Bass diffusion model and IDT

Laforet and Li [2005]

Attitude. Motivation, and behavior

300 respondents randomly interviewed in the streets of six major cities in China 9

Luarn and Lin [2005]

Extended TAM

Laukkanen [2007]

Mean-end theory

Amin et al. [2008]

TAM

Yang [2009]

Rasch measurement model and Item response theory

Cruz et al. [2010]

TAM and theory of resistance to innovation

Riquelme and Rios [2010]

TAM, TPB, and IDT

technology are salient factors influencing mobile banking adoption 180 respondents Perceived selfsurveyed at an eefficacy, financial commerce exposition costs, credibility, and symposium in easy-of-use, and Taiwan usefulness had remarked influence on intention to adopt mobile banking 20 qualitative in-depth Perceived benefits interviews conducted (i.e, location free and with a large efficiency) are main Scandinavian bank factors encouraging customers in Finland people to adopt mobile banking 156 respondents Perceived usefulness, obtained via easy-of-use, convenience sampling credibility, amount of in Malaysia information, and normative pressure significantly influence the adoption of mobile banking 178 students selected Adoption factors are from a university in location-free South Taiwan conveniences, cost effective, and fulfill personal banking needs, while resist factors are concerns on security and basic fees for connecting to mobile banking. 3585 respondents The cost barrier and collected through an perceived risk are online survey in highest rejection Brazil motives, following are unsuitable device, complexity, and lack of information. 681 samples drawn Usefulness, social from the population of norms, risk influences Singapore the intention to adopt 10

Natarjan et al. [2010]

Analytical hierarchy process

40 data obtained from a bank in India

Koenig-Lewis et al. [2010]

TAM and IDT

155 consumers aged 18-35 collected via online survey in Germany

Sripalawat et al. [2011]

TAM and TPB

195 questionnaires collected via online survey in Thailand

Dasgupta et al. [2011]

TAM

325 usable questionnaires gathered from MBA students in India

mobile banking Purpose, perceived risk, benefits, and requirements are main criteria to influence people to choose banking channels. perceived usefulness, compatibility, and risk are significant factors, while perceived costs, easy-of-use, credibility, and trust are not salient factors Subjective norm is the most influential factor, the following is perceived usefulness and selfefficacy. Perceived usefulness, easy-of-use, image, value, self-efficacy, and credibility significantly affect intentions toward mobile banking usage.

Yang [2009] employed the Rasch measurement model and item response theory to survey 178 students from one of largest university in south Taiwan. He found that the speed of transactions and special reductions in transaction fees encouraged mobile baking adoption, while factors inhibiting mobile banking adoption were safety and initial set-up fees. Similar to the finding of Yang [2009], Cruz et al. [2010] surveyed 3585 online respondents in Brazil and supported that the cost of Internet access and service and perceived risk were top two barriers for adopting mobile banking services. Yu: Factors Affecting Individuals to Adopt Mobile Banking Based on TAM and TPB research structure, Sripalawat et al. [2011] collected 195 respondents and found subject norms to be the most influential factor, perceived usefulness to be the second influential factor, and self-efficacy to be the third influential factor in mobile banking adoption. Based on the extended TAM and through collecting 325 valid responses from MBA students in India, Dasgupta et al. [2011] first employed the exploratory factor analysis to identify seven antecedents to behavioral intention toward the

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adoption of mobile banking. Thereafter, they utilized the regression technique to examine the effects of these antecedents on behavioral intention. Their empirical results supported six of seven antecedents, except for risk. The six antecedents were perceived image, perceived usefulness, perceived ease-of-use, perceived value, self-efficacy, perceived credibility, and tradition, which significantly influenced the behavioral intent to use mobile banking. Recently by using interpretive structure modeling and mapping of mobile banking influences in India, Ketkar et al. [2012] systematically plotted key mobile banking barriers and enablers on the two dimensional map. By treating driving power of enablers as positive and that of barriers as negative, their work identified facility to get quick updates, time and cost saving, reach of telecom distribution and need for telecoms to improve customer retention as the crucial drivers for the adoption of mobile banking. By performing an empirical study in Brazilian major cities, Puschel et al. [2010] integrated the TAM, TPB, and IDT to investigate main factors influencing mobile banking adoption. Via collecting 666 usable samples, they found that relative advantages, visibility and compatibility significantly impacted attitude, self-efficacy and technology facilitating condition significantly impacted perceived behavioral control, and perceived behavioral control, attitude, and subjective norm significantly impacted Intention to use mobile banking. Drawing from TAM and IDT, Riquelme and Rios [2010] surveyed 681 Singaporean consumers and concluded that perceived usefulness, social norms and risks (in the order of influence) were three crucial factors influencing the adoption of mobile banking. Built on TAM and IDT, Koenig-Lewis et al. [2010] collected 155 consumers aged 18-35 in Germany and uncovered that perceived usefulness, compatibility, and risk significantly affected consumer intention to adopt mobile banking, while perceived costs, easy-of-use, credibility, and trust were not salient factors influencing behavioral intention to adopt mobile banking. Building on the above literature review, only empirical and theory-based mobile banking studies were summarized in Table 1. Table 1 indicates that TAM, TPB/DTPB and IDT were frequently employed to investigate what influences mobile banking adoption, while small number of studies utilized other theories such as mean-end theory [Laukkanen 2007], Rasch measurement model and item response theory [Yang 2009], and analytical hierarchy process [Natarajan et al. 2010] to derive core determinants to explain the adoption of mobile banking.

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COMPANY PROFILE
ING Vysya Bank Ltd., is an entity formed with the coming together of erstwhile, Vysya Bank Ltd, a premier bank in the Indian Private Sector and a global financial powerhouse, ING of Dutch origin, during Oct 2002. ING is a global financial institution of Dutch origin offering banking, investments, life insurance and retirement services to meet the needs of a broad customer base. ING is serving over 75 million private, corporate and institutional customers in over 40 countries in Europe, North America and Latin America, Asia and Australia. The origin of the erstwhile Vysya Bank was pretty humble. It was in the year 1930 that a team of visionaries came together to form a bank that would extend a helping hand to those who weren't privileged enough to enjoy banking services in India and is headquartered in Bangalore. ING Vysya Bank was ranked among top 5 Most Trusted Brands among private sector banks in India in the Economic Times Brand Equity Nielsen survey 2011. It's been a long journey since then and the Bank has grown in size and stature to encompass every area of present-day banking activity and has carved a distinct identity of being India's Premier Private Sector Bank. ING has gained recognition for its integrated approach of banking, insurance and asset management. Furthermore, the company differentiates itself from other financial service providers by successfully establishing life insurance companies in countries with emerging economies, such as Korea, Taiwan, Hungary, Poland, Mexico and Chile. Another specialization is ING Direct, an Internet and direct marketing concept with which ING is rapidly winning retail market share in mature markets. In 1980, the Bank completed fifty years of service to the nation and post 1985; the Bank made rapid strides to reach the coveted position of being the number one private sector bank. In 1990, the bank completed its Diamond Jubilee year.

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Vision
We are committed to providing quality and door step banking service to our customer, service quality being our paramount importance

Mission
ING Vysya Banks mission is to be a leading, global, client-focused, innovative and low-cost provider of financial services through the distribution channels of the clients preference in markets where ING can create value.

Business Volume
As of June 30, 2012, ING Vysya has assets totaling INR 487.3 billion ($8.9 billion) and market capital of INR 8,468.16 crores and operates a pan-India network of over 1,000 outlets, including 527 branches, which service over two million customers.

Number of Employees
ING Group is a global financial institution, operating in over 40 countries with a strength of over 110,000 employees servicing over 85 million customers globally. ING Vysya Bank has over 10001 employees as mentioned in the annual report 2011-12.

Operations in various sectors

ING Vysya Bank has over 80 years of operating experience in the banking/financial services & insurance sector and currently serves over 2 million Indian consumers. The bank offers an entire range of financial products and services, organized under three strategic lines of business: retail, private and wholesale banking.

ING Vysya Life Insurance Company Limited

ING Life Insurance India is a life insurance company head quartered in Bangalore. ING Vysya Life Insurance recently achieved the significant milestone of completing 10 years of operations in India. The company is a joint venture between Exide Industries and ING Insurance International B.V.

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ING Investment Management

ING Investment Management (I) Pvt Ltd has been associated with innovation and responsive adaptability with sharp minds at work. ING Investment Management has sealed a position of strength and is considered as one of the top contenders to challenge the market leaders. ING Investment Management has enjoyed many firsts and has always maintained a pioneering outlook. ING Investment Management India operates under two divisions a. Mutual Fund Under the Mutual Fund division, ING offers a range of equity, debt and alternative asset class funds in Single Manager & Multi Manager category. Each fund follows a stringent investment process backed by in house research. Multi Manager business offers open architecture, zero brand bias and active management. The belief to construct a Multi Manager fund is not by simply combining the third party mutual funds with the best performance records. Instead, use core research and proprietary investment tools to blend funds which offer the potential for superior, consistent performance in the future. b. Portfolio Management Services ING Private is the umbrella brand of ING Investment Management (India) Pvt. Ltd. in India for all PMS product offerings. This exclusive offering especially created for high net worth individuals and institutional investors, offers investment solutions that are built on INGs global and local quantitative strategy expertise, using years of in-depth research that together enable innovation in product design.

ING Retail Banking

With 527 branches and 10 counters, 28 satellite offices and 470 ATM's nationwide, ING Vysya's retail operation offers checking accounts, savings deposits/CD's, retail wealth management services, consumer loans, agricultural/rural banking and retail life insurance products. The bank has rapidly expanded its distribution footprint and has created a national brand presence through several innovative marketing campaigns. Retail Banking is mainly classified into five categories. They are i) ii) iii) Consumer Assets Retail Liabilities Business banking 16

iv) v)

Agri and Rural Banking Alternate channels

i) Consumer Assets Consumer Assets are the purchase of dwellings and durables by households corresponding to the purchase of factories and machineries by business. It is divided based on categories as

a) Products: Loans that are offered to consumers are categorized under this criterion. ING offers Home loans, Personal Loans, Commercial vehicle loans, Education loan and loan against commercial property. b) Insurance: ING offers insurance on products and some of their insurance scheme includes Home Assured, ING smart shields, Endowment products which includes child plan and money back plans, Pension plans that includes Golden Life and Best years and Home safe plus.

ii) Retail Liabilities

An obligation that legally binds an individual or company to settle a debt. ING Vysya retail banking has products and know your customer which is further categorized as Products: Salary Accounts, Savings Accounts, Current Account, Term Deposit, NRI Products, Demat Account, Life Insurance and General Insurance. Savings Bank Account:

ING ZING Account Parents can teach their children about financial responsibility while the kids will be impressed with the great features of the ING Zing card. To ensure better access and control over the childs account, the parent would also be needed to have a savings account with ING. Savings Account The Savings accounts are primarily meant to inculcate a sense of saving for the future or accumulation of funds over a period of time. These accounts are meant to help customers

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protect their money and provide them with instruments that help them make easy payments without handling / carrying cash. Whatever occupation, we are confident that our customers will find the perfect banking solution through our savings accounts. The rate of interest on the Savings accounts is regulated by the Reserve Bank of India and is currently at 4% per annum. The rate of interest on savings accounts is regulated by the Reserve Bank of India and is currently at 4% pa. The interest is calculated base on a daily product basis and is credited to customers account twice, at half yearly intervals on 30th, September and 31st, March of each financial year.

Orange Account The Orange Savings Account from ING Vysya Bank is designed keeping the busy customer in mind. It supports his busy lifestyle and helps balance the numerous demands made on time, thus making life easier. It offers recognition, convenience and flexibility. Saral No Frills Account The Saral Account from ING Vysya Bank is an account aimed at achieving the objective of greater financial inclusion and extends banking services to vast sections of the population especially at Semi-Urban and Rural areas. The product is available across all the networked Profile branches, Extension Counters and Satellite Offices in Rural & Semi Urban areas. Solo Account The Solo account is an account for students. A savings bank account where the student has to maintain a quarterly average balance of Rs. 500/- in the account. Freedom Account The Freedom Savings Account from ING Vysya Bank is designed with transparency. It provides customers with an account, where they pay an upfront annual fee for maintaining the savings account without indirect charges for non-maintenance of average balances Platina Account The Platina Savings account from ING Vysya Bank is designed keeping the trend-setting affluent customer in mind. It offers great features that help balance a flourishing work life and a fulfilling lifestyle, easily. It is targeted at those looking for a premium banking service that can also help them manage their wealth and plan their future. 18

General Savings Account (Semi Urban areas) The General Savings Account had a quarterly average balance requirement of Rs. 5,000/in the account, similar to the Orange Savings Account. Due to geographical demography and customer profile, the customers at these locations were not inclined to maintain Rs. 5,000/- as the quarterly average balance. To be in line with competition, we have made a Gen SB variant with a QAB requirement of Rs. 2,500/- for customers at Semi Urban locations only. General Savings Account (Rural areas) The General Savings Account had a quarterly average balance requirement of Rs. 5,000/in the account, similar to the Orange Savings Account. Due to geographical demography and customer profile, the customers at these locations were not inclined to maintain Rs. 5,000/- as the quarterly average balance. To be in line with competition, we have made a Gen SB variant with a QAB requirement of Rs. 2,500/- for customers at Semi Urban locations only. 1. Salary Accounts: Aspira Account This account is a corporate salary Account solution for all Companies and Industries. It does not have a minimum QAB requirement and customer can enjoy all services as that of a savings account holder. Advantage Salary Account This salary account offers numerous benefits and features to the salaried personnel and are same as that of Aspira account with some varying features. 2. Current Accounts: General Current Account Key Features includes Transactional convenience on account of automation at Profile branches, Value Additions to the account holders, Personalized Cheque books, International Debit Card, ING Net banking services, Phone Banking at select centers, Bill Pay at select centers, Demat Account (on request), Access to a wide network of ING Vysya Bank as well as non-ING Vysya Bank ATMs in India and abroad, Investment Advisory Services at all metros and select centers and Possibility of many other banking facilities, depending on the needs and net worth of the account holder.

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Comfort Current Account Comfort Current Account lets you save up to Rs.60, 000/- per annum for remittance upto Rs.300 lakhs per annum. This is in addition to a range of other attractive benefits, as well. Advantage Current Account A Competitive current account product from ING Vysya Bank with a host of benefits addressing today's demands of the prospective mid-sized business customers. A never before banking experience that priorities customer convenience and makes banking, an overall pleasure. Orange Current Account A unique Business Account with a suite of value additions addressing the current day demands, from ING Vysya Banks stable of Orange. A never before banking experience that priorities customer convenience and makes banking an overall pleasure. Platina Current Account Flexi Current Account

3. Term Deposits Fixed Deposit A term deposit allowing for a lump-sum deposit at one time for a fixed period. Fixed Deposit offers higher interest rates to customers as compared to the ordinary Savings Bank account. Cumulative Deposit Cumulative Deposit provides the facility of monthly/periodic savings in the account to earn higher interest than Savings Bank Account. Customers can deposit money according to their ability to save. Akshaya Deposit A reinvestment deposit wherein a lump-sum amount is deposited at one time, and the principal and interest thereon are repaid on maturity. A fixed deposit account that provides

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for reinvestment of the interest accrued on the deposits kept with the Bank. In short, interest also earns interest every quarter. 4. NRI Products: NRI Products includes benefits and features for NRI Customers. Different products available can be listed as NRO Savings account, NRO Current Account, NRO Cumulative Deposit, NRO Fixed Deposit, NRO Akshaya Deposit, NRE Savings Account, NRE Current Account, NRE Cumulative Deposit, NRE Fixed Deposit, NRE Akshaya Deposit, FCNR Fixed Deposit and FCNR Akshaya Deposit.

iii) Business Banking: The wholesale banking business provides corporate clients in India a range of commercial, transactional and electronic banking products. The bank offers client focused products including working capital finance, trade and transactional services, foreign exchange, term loans and cash management services.The wholesale banking business comprises four business sub-segments and multiple product offerings. The business segments Corporate and Investment Banking, Emerging Corporates, Banking and Financial Institutions and financial markets. ING has structured different plans and products for Business Banking. They are as follows Mpower Rent A product that offers immediate liquidity against commercial property owned. Avail of a loan at competitive rates, against rent receivables. MPower Business Loans Trade A scheme formulated specifically to provide credit facilities to Small and Medium Enterprise engaged in Trading, Small Businesses and Service activities. The scheme offers Secured Overdraft Limits (SOD) (Fund and Non-fund) Term Loans and Composite Loans covering both Working Capital as well as Term loan with a maximum exposure of Rs.200 lakhs per customer. MPower VIDYALAYA A customized package for financing to Educational Institutions by capitalizing on the lending opportunities arising out of the privatization of the Educational Sector.

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MPower Small Scale Industry A scheme formulated specifically to provide credit facilities to Small Scale Industry units engaged in activities like manufacturing, processing or SSSBEs, including Information Technology and / or Software industry. MPower RICE MILLS A scheme formulated specifically to provide credit facilities to Rice Millers engaged in processing and / or trading of rice. The scheme offers Term Loans, Working Capital and Non Fund based Limit (LCs & BGs) iv) Agri and Rural Banking: Agriculture and Rural Banking deals with all business related to agriculture and allied activities, Gold Loans, loans to SHGs and lending to government sponsored schemes. Working Capital and Agriculture Term Loans for Poultry, Dairy, Cold storage units etc. are also being offered to cater diverse needs of the farming community. The Bank has accelerated retail agricultural lending at a few places in North India and Central India especially in Rajasthan, Uttarakhand, Maharashtra, Gujarat and Madhya Pradesh. The Bank has a strong focus on sustainable business solutions for Agriculture and Rural Issues of the country. It is the Banks constant endeavour to support business initiatives and innovative strategies that help drive inclusive growth. ARB is the Banks specialized group focused on fulfilling the financial needs of agriculture and allied sectors. It extends a range of banking products and services to various stakeholders across the Agribusiness value chain. Despite a limited reach in terms of branch network in rural areas, the group has been able to consistently achieve Priority Sector Lending (PSL) targets for the last three years and has also generated surplus assets for selling down to other banks. This has been achieved by developing innovative financial models, some of which have won national and international recognition at various forums. Kissan Credit Card Revolving Cash Credit Limit to meet the short-term working capital requirement of Agriculture & allied activities. Term loans under Agriculture & Allied Activities shall also be covered under the KCC Scheme.

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Gold Loan The scheme provides access to funds required for the farmers' crop production and allied activities. Loans can also be sanctioned for the activities covered under Other Priority Sector Advances (RT/SB/SRTO), Education, Housing and other business activities and for general purposes. General Credit Card To provide hassle-free general credit need to banks existing customers in rural and semiurban areas based on the assessment of income and cash flow of entire household without insistence on security, purpose or end-use of the credit in the form of cash credit or overdraft facility. Vys Dairy Short term loans to dairy agents / organizers enabling them to give loans to small dairy farmers/ milk producers for purchase of animals and meeting requirements towards feed, maintenance, etc. Swarojgar Credit Card Scheme (SCC) SCC Scheme aims at providing adequate and timely credit i.e., working capital/or block capital or both to small artisans, handloom weavers service sector, fishermen self employed persons, rickshaw owners, other micro-entrepreneurs, etc. in a flexible, hassle free and cost effective manner. The facility may also include a reasonable component for consumption needs. Vys Mahindra Vys Krishi Agri Business Loans Trade (Agri BLT) Rural Housing Produce Loans House Loan Bhoomi Link

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v)

Alternate Channels:

Customers are now looking for multiple delivery channels and flexible as well as convenient working hours neither the clock nor the geographical locations are constraints. Therefore, almost all Indian commercial banks are providing services through the various alternative e-channels, it is called as Alternative Banking. There are various means of alternative banking i.e. Core banking Solution (CBS), ATM, POS Terminals, Mobile Banking, Internet Banking, Credit Cards, Debit Cards, EFT, RTGS, MICR clearing etc. Alternate channels are not the most effective at generating new sales, they improve customer satisfaction and retention. With the help of technology, the banking industry can develop or expand into new channels to survive in the current competitive environment. Any new channel involves cost and in alternate channels, technology plays a vital role in terms of providing a near to branch experience to the wellinformed wealth management customer. ATM: ING Vysya Bank currently has 512 ATMs across the country of which 249 ATMs are in Onsite and remaining 263 ATMs are in offsite spread across the country. Credit Card: A credit card is a payment card issued to users as a system of payment. It allows the cardholder to pay for goods and services based on the holder's promise to pay for them. ING Gold credit card has following benefits: No Annual Fee, 0% fuel surcharge at Indian Oil Petrol Bunks, Earn double the reward points on every Rs.150/- spent on weekends, 1 Reward Point for every Rs.150/- spent on weekdays and double the reward points for international spends. ING Net Banking: Net banking provides a single snapshot view of banking relationships with ING Accounts, Fixed Deposits, Credit cards, Loans, Demat and Investments. ING Vysya's new e-banking module has undergone aesthetic and functional changes to offer an enhanced user experience. The home page dashboard, for instance, provides a view of all your linked savings account, deposit account, demat account, investment account, as well as loans and payments. One can also opt for an online demonstration to make your way around the new module more easily. If one hadn't registered for internet banking at the time of account opening, ING Vysya's new ebanking facility allows customer to register online instantly. Customers dont have to visit ING Vysya branch or opt for the phone banking facility to register for internet banking. One can 24

perform a number of banking-related tasks quickly and conveniently with ING Vysya's new ebanking module. Customer can make partial withdrawals from your fixed deposit account with a few mouse clicks Auto schedule and pay your utility bills, subscription bills, etc online Shop online with ING Vysya savings account, and make the most of the advantages that come with this Some of the added functionalities are real time fund transfers through RTGS (Real Time Gross Settlement), sending demand drafts (DD) through your e-banking account, and making online transactions through your joint account

ING Vysya's new internet banking platform offers secure logins and transactions. Best password practices, automatic lock-ins following three failed login attempts, and virtual keyboard option are some of the security features that make online banking safer. ING Phone Banking: Phone banking is a service provided by a ING VYSYA bank, that enables customers to perform financial transactions over the telephone, without the need to visit a bank branch or automated teller machine. Phone banking times are longer than branch opening times, as they service on a 24 hour basis. From the bank's point of view, phone banking reduces the cost of handling transactions by reducing the need for customers to visit a bank branch for non-cash withdrawal and deposit transactions. ING Mobile Banking: ING Mobile Banking is a secure Mobile Banking application which allows accessing various services of ING Vysya BANK on mobile handset anytime and anywhere. It helps to connect directly to bank account, transfer money to other bank accounts, pay credit card or utility bills and do much more just at the press of a mobile' button. ING Mobile Banking offers the following services: Make Balance enquiry Mini Statements (last 5 / 10/ 15 transactions) Transfer funds to self accounts & other accounts within ING Request for Fixed Deposit Pre-closure of Fixed Deposit View Deposits Pay utility bills Request Cheque Book 25

Stop payment of Cheque Cheque status Locator services (ATM and Branch)

Charges of ING mobile banking services: Rs. 120/- shall be charged per annum if you have one or more Savings Bank Accounts in a relationship. Rs. 240/- shall be charged for per annum if you have one or more Current Account in a relationship like Current or CCOD Account.

MOBILE BANKING
Mobile technology is transforming the global banking and payment industry by providing added convenience to existing bank customers in developed markets, and by offering new services to the unbanked customers in emerging markets. Mobile-Banking is a buzz word in the banking sector throughout the world. Mobile Banking refers to provision and availment of banking- and financial services with the help of mobile telecommunication devices. Mobile banking is a subset of banking as it allows everyone easy access to their banking activities via. smartphone. The scope of offered services may include facilities to conduct bank and stock market transactions, to administer accounts and to access customized information". Now bank customers are availing their banking services through internet banking, ATM services and further it has added one more feather to its services by introducing Mobile-Banking to its channel of distribution. Most services in the categories are transaction-based. The non-transaction-based services of an informational nature are however essential for conducting transactions - for instance, balance inquiries might be needed before committing a money remittance. Various research findings regarding the penetration of mobile phone, states that the penetration level of mobile in the world is more comparable to that of the banking. The Financial Access Initiative, a research consortium based on New-York University has identified that 2.5b adults worldwide do not have a savings or credit account with either a traditional or alternative financial institution (Chaia, et.,2009). Across the globe the formal banking reaches about 37 per cent of the population, but mobile phone penetration level is 50 per cent of the population.

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Mobile Banking in India

The liberalization, globalization and privatization of the Indian economy in 1990s paved a more flexible functioning of the services sector and particularly the banking industry. Added to this the adoption of technology in the banking sector has made a remarkable advancement in the service quality of the banks in India. When we analyze the Indian scenario, we should first thank for liberalizing the Indian economy. Due to the liberalization that initiated in the telecom sector, it has boomed to a greater extent of growth and it has registered at$100 billion today and its contribution to the gross domestic product today is to the level of 13 per cent. When we compare India with the rest of the world with regard to the number of mobile subscribers, it stands in the second position next to China. As mobile phones have become an essential communication tool for almost every individual, day by day the subscribers are also increasing. Mobile phones are considered to be the most appropriate delivery channel for financial services because of the ubiquity of the mobile phones and secondly the subscribers are more in number compared to that of the number of account holders in the bank. So mobile phones are considered yet another channel for delivering the banking services. This is taken as an effective tool to bring the financially excluded people under the purview of banking. In this respect the Reserve Bank of India (RBI) has shown its green signal in the year 2008 by giving its guidelines regarding the operation of mobile banking and subsequently in 2011 the RBI issued money transfer guidelines also. Mobile banking services in India are being offered on various access channels viz. Short Messaging Services (SMS), Interactive Voice Response (IVR), Mobile Application, Wireless Application Protocol (WAP) etc.

Scope of mobile based banking in India

Nielsen has released the findings of the Indian Smartphone User study conducted late last year, and the numbers thrown up are very interesting. The country currently has 900 million mobile phones in use, out of which 40 million are smartphones. Deeper into those numbers, the survey reveals that 50% of those 40 million smartphones (48%) are with people under the age of 25. According to the recent reports, India will surpass China to become the worlds largest mobile phone markets by the year 2013 and it is estimated to touch 1.159 billion.

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This graph clearly indicates that people prefer using android phones which is followed by symbian and windows phone. IOS components still stands as a veblan good but recent study indicates that there is an increase in iPhone users in India. India has added 88 million Internet users during 2008-2012 and now has 137 million Internet users, recording a 26% growth year-on-year (YoY). The population penetration rate for India stood at 11%. Mobile Internet accounts for 59.36% of the total Internet usage in India, as of December 2012. This clearly indicates that mobile banking will be the next big untapped market that can prosper if used wisely by the banking industries.

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OBJECTIVE OF THE PROJECT:

ING Vysya bank as a measure of increasing customer convenience and facilitate customers with innovative technologies has come up with a decision of providing a new mobile banking application in all platforms considering the growing trend of mobile banking in and around the world. So the entire project is based on three objectives. The first objective is to compare the performance of banks in India in the area of mobile banking by exploring various services offered with ING mobile application and to find target group and potential customers in ING who can avail this service. The second objective involves understanding functional requirements of new ING mobile application and creating admin documents for all front end and back end functionalities of the application. Presenting the new ING mobile application to Phone Banking team to help them understand all the processes and to help them provide support for new application. And also to design content for mobile application page in ING Net banking and product description for Appstore. The Third and key objective is to involve in Deployment and change delivery handling management of ING Mobile application (iOS,Android) and create a marketing plan to spread across customers in ING. Final objective is to propose emerging payment models that can generate revenue with existing infrastructure.

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PHASE I Analysis of features in other banks and finding target group

a. Comparison of mobile banking features offered by private banks in India Objective: To compare and analyze various services offered by other competitors in the Indian Market. ICICI, Standard Chartered, HDFC, Axis and Kotak Mahindra banks are listed down with their features in the various services being offered in their mobile banking applications.

Table 2: Comparison of Mobile banking features in other banks KOTA K

Features

ICICI

SC

HDFC

AXIS

ACCOUNT DETAILS Bill Payment Balance Enquiry Cheque Book Request Last 5 Transactions Stop Cheque Request Cheque Status Enquiry Open a Fixed Deposit Open Recurring Deposit Y Y Y Y Y Y Y Y Y Y Y Y Y Y N N Y Y Y Y Y Y Y Y Y Y Y Y N N N N Y Y Y Y Y Y Y Y

Funds Transfer Insta Fund Transfer (IMPS) List Of Beneficiaries One Time Payment

y y y N

FUNDS Y Y Y Y N 30 N Y N

Y Y Y N

Y Y Y Y

CREDIT CARD Balance Details Last Payment Details Payment Due Date Request for ATM PIN, report loss or damage of card Balance Transfer Convert transactions to EMIs Request add-on cards Setup auto debit for your credit card bill payments Y Y Y Y Y Y Y Y N N N N Y Y Y

Y N N N N

Y N N N N

Y N N N N

N N N N N

Y Y Y Y Y

DEMAT ACCOUNT Holding Enquiry Transaction Status Bill Enquiry ISIN Enquiry Total Holding Details Y Y Y Y Y N N N N N Y Y Y Y Y N N N N N N N N N N

Wealth Management

WEALTH MANAGEMENT N N Y N LOAN

Provisional IT Certificate Final IT Certificate Reset Letter Rescheduled Letter Loan Agreement Copy

Y Y Y Y Y

Loan Outstanding

N N N N N Y(Thr ough Credit Card)

N N N N N

N N N N N

N N N N N

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OTHER SERVICE REQUESTS Service Request Tracker Locate ATM Locate Branch Show Payments Made Apply Now Customer Care Number Personalised Homepage Y Y Y Y Y Y N N Y Y Y N Y N N N N N N Y N N N N N N Y N N Y Y Y N Y Y

VALUE ADDED SERVICES Prepaid mobile Recharge Movie Ticketing Air Ticketing Shopping DTH Recharge Bus Ticketing

y y y y y y

Y Y N N Y N

N N N N N N

Y N N N N N

N N N N N N

Inference: Almost all banks in India provides only basic features for mobile banking and hence by analyzing their applications, ING Internet and mobile banking team has ensured that it had integrated all such features and other essential features which will offer customers with a whole new banking experience.

b. Identification of Potential Customers within ING: Objective: To collect information from internet banking customers by survey hosted in ING Net banking website. After collecting the required data, valuable information required is extracted for further analysis. From 850+ samples collected in survey, analysis is been carried out to determine the target group of ING Mobile Application.

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Key factors that are considered for analysis are Quarterly Average Balance (QAB) and Customers Age. Region Product

The Split-up of users participated in survey based on their phones are 1) 2) 3) 4) iPhone 213 Android 364 BlackBerry 90 Java & Others 293

Region:

State AP KA MH TN DL Others

Frequencies Percentage Cumulative 184 22.44% 22.44% 189 23.05% 45.49% 109 13.29% 58.78% 88 10.73% 69.51% 78 9.51% 79.02% 172 20.98% 100.00%

AP 172 78 88 109 189 184 KA MH TN DL Others

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Statistics clearly indicates that around 79% of customers are crowded in five major states viz. Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu and Delhi. Around which 73% of these customers are in Karnataka, Andhra Pradesh and Maharashtra. Customer Base based on cities: Bangalore (Karnataka) Hyderabad and Vijayawada (Andhra Pradesh) Maharashtra (Mumbai)

These states and cities can be our major target group for ING Mobile Banking App. QAB: Basic Analysis indicates that around 28% of users maintain QAB over Rs.30000 who can be the potential customers to switch over to iPhone later.

QAB > 30000 < 30000

Customer Base 193 627

193 627

> 30000

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In-depth Analysis: 1. ANOVA: Quarterly Average Balance for all mobile user groups are extracted and One way ANOVA is used to find the Average QAB for all users based on their varied sample size.

SUMMARY Groups Column 1 Column 2 Column 3 Column 4

Count 213 259 90 293

Sum 17747797 8058510 5204676 4182085

Average 83322.99263 31113.93906 57829.72911 14273.32881

Variance 1.67E+11 4.84E+09 3.1E+10 1.07E+09

ANOVA Source of Variation Between Groups Within Groups Total

SS 6.4161E+11 3.9715E+13 4.03566E+13

Df 3 851 854

MS

P-value

F crit

2.1387E+11 4.58274 0.003428 2.615365 46668577585

2. Chi-Square Distribution: Then a detailed analysis is carried out for iPhone and Android users to determine whether there is a significant impact on QAB. Chi Square Distribution for 6 levels of QAB values (6X2) contingency table is formed. 010000 88 208 1000020000 34 61 20000- 30000- 4000030000 40000 50000 24 11 7 25 15 11

iPhone Android

>50000 49 44

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Null Hypothesis: Proportion of customers who use iPhone has no significant impact on QAB Balance Alternate Hypothesis: Proportion of customers who use iPhone has significant impact on QAB Balance Chi Square df P-value Yate's chi square Yates' p-value 19.967 5 0.001268 18.248 0.002651 95% of significance Chi-calc Chiobserved p-calc p-observed 18.248 11.07 0.002651 1.145

Results indicated that QAB has significant impact on iPhone users as QAB for iPhone is quite high compared to Android users. AGE:

Age <20 20-35 >35

Frequency Percentage 4 0.49% 620 75.61% 196 23.90%

Based on age of customers

700 600 500 400 300 200 100 0 <20 20-35 >35

Frequency

Overall general analysis shows that around 75% of user group falls within 20-35 yrs of range. And within this, around 68% are in the range of 22-30 years, which clearly indicates that mobile banking has high scope of growing into main source of banking in upcoming years.

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Age ranging from 20-35 Customers Percentage 63 10.16% 417 67.26% 140 22.58%

20-22 22-30 30-35

Customers within 20-35

500 400 300 200 100 0 20-22 22-30 30-35 Customers

In-depth Analysis: It is further strengthened by performing Chi Square Distribution for both iPhone and Android users to find any impact on use of iPhone by younger generation. Results indicated that Age has significant impact on Mobile Phone Buying Behavior thereby supporting our basic analysis. They are as follows 3045 71 108 4560 17 20

0-15 0 iPhone 0 Android

15-30 121 234

>60 4 2

Null Hypothesis: Proportion of customers who use iPhone has no significant impact on Age Alternate Hypothesis: Proportion of customers who use iPhone has significant impact on Age.

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Chi Square Df

5.379 3

0.146058 P-value Yate's chi 3.691 square Yates' p-value 0.296822

95% of significance 3.691 Chi-calc Chi7.815 observed p-calc p-observed 0.2968218 0.352

P calc < p observed . Hence we reject null hypothesis in favor of alternate hypothesis Result: the proportion of customers who use iPhone has significant impact on Age PRODUCT:

Product Aspira SB Savings Bank (Orange) Advantage Salary Account Savings Bank (Orange-Metro) Others Total

Customer Base 337 154 199 39 91 820

Percentage 41.10% 18.78% 24.27% 4.76% 11.10%

130 Aspira SB,Savings Orange,Advantage Salary A/c Others 690

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84% of total respondents have product account on Aspira SB Savings Bank (Orange) Advantage Salary Account

Out of these, 15% have Rs.50000 as their minimum Quarterly Average Balance (QAB) QAB > 50000 No of Customers Percentage 43 35.83% 23 16 11 27 120 19.17% 13.33% 9.17% 22.50% 100.00%

Product Aspira SB Savings Bank (Orange) Advantage Salary Account Savings Bank (Orange-Metro) Others Total

QAB < 50000 No of Customers Percentage 294 42.00% 183 131 28 64 700 26.14% 18.71% 4.00% 9.14% 100.00%

Product Aspira SB Advantage Salary Account Savings Bank (Orange) Savings Bank (Orange-Metro) Others Total

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RESULT: After analyzing the results, the target group for mobile banking application is identified using the data available. The Target group based on major factors are Region: Andhra Pradesh (Hyderabad & Vijayawada), Karnataka (Bangalore) and Maharashtra (Mumbai). Product: - Aspira SB, Savings Bank (Orange) and Advantage Salary Account holders. QAB: - Customers with minimum QAB of Rs.30000 Age: - Range between 20-35 and should focus more on age group of 22-30.

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PHASE II
ING Mobile banking application and process involved before moving to production

ING VYSYA MOBILE BANKING APPLICATION ING VYSYA had launched mobile application in 2009 which had the following limitations It supports only a limited set of phones operating on Java and Blackberry Platforms. Only limited features such as account balance, cheque status, mini statement, Internal Funds Transfer and bill pay were available. Compatible only with Nokia phones and saw issues in other handsets.

Need for new mobile banking application: With smartphone being the latest buzz and users grows at 15% a year, banks concentrate on moving their services through mobile banking. RBI has released a statement for the year 20122013 where it has mentioned that the mobile banking will be the next biggest transformation in banking sector within 2015 and there is a healthy market for banking through mobile. TRAI statement proves to be in the favor of the statement which says that transactions through mobile phones are increasing at a higher rate compared to internet transactions. Deloitte consulting firm has released a report on mobile payments in which they quote Players who identify the opportunity and leverage available technologies and regulations to carve out mobile retail payment solutions that are suitable to Indian market place are set to emerge leaders in this space, leaving others behind. Availability of application in common Marketplace such as App Store, Google Play, Marketplace and App World would attract potential customers and engage existing customers. Integrating more features and value added services would provide greater reach and increase target base. ING Vysya Mobile Banking application will be available on IOS 4.3 onwards, Android 2.3 onwards, Blackberry and Windows will have a hybrid application, Java Phones and m-site Currently, we will have the Iphone application that can be used on Iphone and IPAD 41

Services provided in new application: i) Accounts/Deposits: This section includes Account Summary, Balance Enquiry, Mini Statement, Date Range statement for 6 months, E-mail Statement Request, printed Statement request, Opening a new FD/RD Account, Closing FD Accounts, View Loan account details (Home Loan, Auto Loan, Personal Loan). Fund Transfers: Transfer of funds to self, Other Accounts in ING, Third party Transfer through NEFT/RTGS, IMPS (Interbank Mobile Payment Service)-P2P, Beneficiary ADD/MODIFY/DELETE operations. Bill Pay: Bills can be paid through Quick Pay where the user can pay Instant bills and also by Registered Biller (Payment and Presentment on Payment). Mobile Shopping: Includes Mobile recharge/topup, DTH recharge as of now. Movie and Bust Ticketing will be available in future. Wealth Management: Holding Enquiry, ISIN Enquiry and Transaction Statements for Demat and Wealth Investments (Mutual Funds) can be viewed. My Cheque Book: It includes requests for new cheque book and stop cheque. Also, an option called Scan a new cheque where you cans tore images of your cheques securely inside your application. Messages and More: General settings such as Login/transaction password Change, Nickname change, Favorite Account Changes are modified here.

ii)

iii)

iv)

v)

vi)

vii)

VALUE ADDED SERVICES: (Only on iphone/Android applications) i) ATM/BRANCH LOCATOR: Locates and finds the nearest ATM and branches and displays along with the distance from the current location by opening Google Maps SCAN CHEQUES: Option to scan and save cheques in the application which can be used for future references. Map Contacts/Send SMS to Beneficiary after Funds Transfer: The Beneficiary can be mapped to an image/contact on the Phone book and after every FT, the customer can send an SMS to the beneficiary. 42

ii)

iii)

iv)

BALANCE METER: Displays Balance in the favorite account even before logging in to the application. GIFT VOUCHERS: Gift Vouchers can be purchased and can be sent to friends and relatives via e-mail and SMS. REMINDER: Alerts can be set in calendar for bill payment due dates on the phone calendar. Sharing ING Deals on Face book and Twitter: The ING e-deals can be shared on FB/Twitter from the application

v)

vi)

vii)

Why to launch with iPhone/iPad? i) App will have better stability and protection as it is downloaded via AppStore ii) Minor glitches and problems in app after moving to production can be identified and fixed, thereby ensuring hassle free release in other platforms (Android, Blackberry, etc...) iii) Large numbers of iPhone/iPad users are wealth customers who have invested in ING. Hybrid Applications: Hybrid, by definition is anything derived from heterogeneous sources, or composed of elements of different or incongruous kinds. A hybrid app is one that is written with the same technology used for websites and mobile web implementations, and that is hosted or runs inside a native container on a mobile device. It is the marriage of web technology and native execution. Hybrid apps use a web view control (UIWebView on iOS, Web View on Android and others) to present the HTML and JavaScript files in a full-screen format, using the native browser rendering engine (not the browser itself). WebKit is the browser rendering engine that is used on iOS, Android, Blackberry and others. That means that the HTML and JavaScript used to construct a hybrid app is rendered/processed by the WebKit rendering engine (for you Windows 8 folks, this is what the IE10 engine does for Metro style apps that use WinJS) and displayed to the user in a full-screen web view control, not in a browser. No longer are you constrained to using HTML and JavaScript for only in-browser implementations on mobile devices. The real secret sauce of hybrid apps is the implementation of an abstraction layer that exposes the device capabilities (read: native APIs) to the hybrid app as a JavaScript API. This is something not possible with Mobile Web implementations because of the security boundary 43

between the browser and the device APIs. Apache Cordova (formerly PhoneGap) is an example of a JavaScript abstraction layer over native APIs (for you Windows 8 folks, WinJS is another example of a JavaScript abstraction layer on top of native APIs). Through this abstraction layer a common set of APIs is exposed in JavaScript, and these JavaScript APIs work on any device supported by the framework (for WinJS thats only Windows 8, but for Cordova that is seven mobile platforms including iOS, Android, Blackberry and Windows Phone 7). When the native wrapper is compiled around the HTML, CSS and JavaScript resources, there is an interop layer added that connects the JavaScript APIs with the platform specific APIs.

Windows and BB RIM are developed as hybrid applications for ING Mobile application. It uses same code and functionalities but user Interface and platform affinity for all those changes and this can be done by using an interface which helps to convert into their respective source code. Eg.Worklight from IBM is an example for Interface apps. Interacting with other team for changes and deployment of the application 1. Services Team Admin, Database and Backend service Issues 2. Channels Team User Interface and Frontend Issues. Integration of services with Internet Banking This application is designed in such a way that it is in complete sync with the ING net banking which will provide all information that are registered already in a customers Net banking profile to this mobile banking application. The database that refers Net banking is pointed to this application such that all billers info that are added in Net banking can be viewed here reducing the effort of customers to re-enter all the biller details and beneficiary details. It also makes use 44

of same login and transaction password details as that of ING Net banking enhancing security and reducing customers efforts to remember different passwords for banking in internet and mobile. Problems and solutions First and foremost plan after launching application online is to provide customer support. It has to be done both online and offline. For customer centre to answer the queries of newly launched app, they had to be given knowledge transfer in many sessions. This is one of the prime tasks that mobile banking team has to perform at high priority. Training sessions were conducted to phone banking executives and admins to describe the functionalities and features of mobile banking application.

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PHASE III
ING Mobile banking promotion Management and Campaigns
Cycle I This phase of marketing campaign is carried out after launching ING mobile application App for iPhone/iPad. The main objective of this campaign is to educate customer about the new product launch and encourage them to use this application as a mode of banking. Forming a constructive user base for iPhone will set a better platform for apps to be released in other platforms and improvised campaigns with a higher budget. SMS Campaign As per the analysis carried out in previous phase of project, SMS is sent to all active customers in ING twice in a month with definite time Interval. Main strategy is send a queue of SMS to adopt mobile banking to all customers who are active in Internet Banking. E-mail Marketing Email marketing is directly marketing a commercial message to a group of people using email. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. Here the customers are divided into two segments. a) Potential Customers within the preferred age group and QAB Emails will be sent every 15 days to ensure activation of mobile banking services b) All Customers with ING Vysya bank- Emails will be sent twice about the launch of new product. Interactive Voice Response (Phone Banking) Interactive Voice Response system is used by banking customers for registering complaints/queries in services offered. Including Mobile Banking as a separate option in the list will educate customers about the service offered.

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Missed call Marketing This Marketing technique is to ensure that all existing customers have installed the mobile application. Customers are asked to give a missed to certain number for exiting offers and they will be replied back a voice message to activate the service and enjoy discounts and vouchers. Posters/Pamphlets Posters are to be stationed in each ATM and Branches to ensure that every customer who walks in to the ATM and branches will get to know the new mobile application and start using it. Branches Through Branch Heads: Running a contest Mobile Banker of the month where the Branch head is awarded with Mobile/Tablet where higher conversion rate of customers is identified. Through RMs and Sales person: Similar contest is separately run for salary relationship manager across all branches. Salary RMs and Sales persons can include the features of mobile banking as video or content while presenting it to the corporate customers. Cycle II Facebook Campaign ING Facebook Page Posters/Content can be designed and posted in ING facebook page at regular intervals with deals and offers for attracting customers to use banking application. Facebook ads and recommended posts are hosted for users falling under region and age category. Google Ads Google Adwords and Google Adsense are to be used in promoting the mobile banking application to customers by advertising in top websites and in search engines.

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Tech Blogs and Forums Reviews of Application on iOS, Android forums and in banking forums will help customers to know about the application better from user perspective and urge them to use the application.

Content for ING Mobile Banking Application

Post Deployment into production, design of mobile banking page in internet banking with the content and also Appstore where the application is listed with contents are drafted and approve by the product manager for release. Along with that to increase the penetration and to enlighten customers about the new product launch a press release document has been drafted that will be published in leading news dailies.

Creation of MIS
MIS document is required for all channels in order to identify and book keep the amount of penetration that particular channel has created for the past months. It also helps to sort out the revenue generated by each services and penetration level into each features. MIS document for ING Mobile application is constructed in such a way that it captures all important transactions and revenues that occurs from key features and services. It is also important for analyzing financial and non financial transactions that occur through mobile banking channel.

Project Planner
Project planner helps to create a deadline for the particular task to be completed considering the various aspects with red, amber and green being the status of the project at present. A project plan is drafted for launching application in all platforms including Android, Windows, BB and Java and to be monitored with necessary steps to be taken for adherence of the project deadline.

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PHASE IV
Recommendations for Alternate Channel Payments

Emerging Trends in Banking Industries

As ING Application for mobile is deployed in production and nearing its launch, various other improvements required for entire banking alternate channels are identified. Out of those identified new opportunities some major models are analyzed and drafted which when implemented would create a significant impact in Indian banking industry. Apart from mobile banking there are multiple options that can be performed by mobile and will significantly help in banks revenue and growth. Number of plans is proposed after which it narrowed down to three plans that can be considered implementing after this module. Detailed study on payment modules and some new concepts drives the three proposals made to the higher officials.

i)

Mobile Point of Sale (MPoS):

Executive Summary This document identifies the benefits that Mobile point of sale services can bring to the banking industry, banking professionals and the customer in terms of payments. This document is for initial common understanding of the opportunities that MPOS could bring to the banking industry especially in payment sections. This forms the basis for future collaboration to develop the ideas and concepts presented in this document. Four use cases have been defined and analyzed where mobile point of sale which will be referred as MPOS hereafter can bring great benefits to the Indian Payment paradigm, banking industry, banking professionals and the customer, namely:

Easy Payment solutions for Retailers Payment solution for door to door FMCG Delivery Payment solution for FNB Delivery Payment option for educational fees in school & colleges Payment option for LPG and Cab Delivery Payment option for Insurance providers 49

 Payment option for Courier Services Payment option for E-Commerce sites

Each use case is introduced with different scenarios and the benefits to both customers and bank are defined. This will form the basis of further, more detailed, collaborative work to be conducted in the field of mobile payments. The primary focus of the paper is on the improvements brought by MPOS to banking and banking operations and the benefits that innovative services can bring to the customers convenience.

INTRODUCTION Overview This document illustrates the MPOS services in Payment solutions for banking. This document builds upon the detailed study on MPOS and to improve the way in which the banking industry operates with the current payment solutions.

Scope Optimistic predictions were made for 2012, which was supposed to be the boom year for mobile payments of all sorts, and in many ways it was. The m payments segment is varied and very often specialized, without a single globally accepted standard, or one technology that could be used for both POS and online transactions. MPOS is widely accepted and used in many countries and its known as next biggest leap in the field of payment solutions. Western countries started adopting it from 2008 and had seen a significant growth. Many banks had accepted and embraced this technology for payments and boasted as a front runner in terms of revenue. The market potential for such mobile card readers in India is enormous. Currently, there are 4.5 million merchants in India, but only half a million accept credit cards. Widespread deployment of the MPOS card reader will enable Indias 300 million cardholders to begin using cards instead of cash, and merchants will see tremendous growth. Adoption is expected to be especially high among small businesses especially FMCG sector door to door delivery, FNB delivery services, insurance sector for payments, courier services as well as cab services to name just a few. Considering MPOS in India, the growth is considerably slow compared to other countries. This is because of two main reasons. First being, amount of technology and investment required to bring in the technology. RBI guidelines which had restrictions in the use of such payment solutions which are not rated high in terms of security at that point of time. Later after 2 years, Axis Bank implemented MPOS payment which it named as swipe on is a joint venture of Prizm technologies and Axis Limited. Later, after three years at the end of 2012 Yes bank introduced 50

MPOS solutions. Other larger private sector banks are still in the process of formulating a strategic plan for MPOS implementation which by 2015 will be followed and practiced by all major banks. Early adaption to such services by banks can be beneficiary considering the evolution that will occur in mobile and mobile based payments in the coming years. ROLE OF ING If MPOS is implemented in ING as a mode of payment, It will set ING as early adopter with the emerging technology alongside with Axis bank and Yes bank. It will increase the trust and popularity among users creating a brand ING in niche segments such as B2B. ING can promote and accelerate revenue growth by pulling major private sector banks like ICICI and HDFC backwards. Mobile Banking and its future Statistics in the public domain clearly indicate that for the next generation of banking customers, mobile devices will be the preferred channel for banking transactions. However, many banks still perceive mobile and internet banking as extensions of the conventional bank branch, and not its replacement. While the fact remains that the virtual channel is predominantly used for retail transactions, the road ahead for banks is to offer the whole gamut of banking services on the mobile device. Currently, most banks offer essential banking services such as account-related transactions and mobile commerce facilities. In the future, though, banks will need to deliver corporate banking services on the mobile device. As adoption of mobile banking for retail transactions increases, the same set of users would expect the bank to offer them the same levels of convenience while conducting corporate banking transactions. Though a few banks do offer corporate mobile banking, it is largely restricted to checking balances, approvals and simple fund transfers. However, as more and more executives get equipped with smart phones and tablets, they would expect banks to offer advanced features like vendor payments, treasury services and commercial lending etc. on their handheld devices. Redefining Technology The first stage in the evolution of mobile banking involved the usage of the mobile device for banking and e-commerce, essentially the usage of the device for internet access. Banks and consumers treated mobile as an alternative channel for banking, and there was no significant value delivered to the customer, except the convenience aspect. With mobile device technology becoming more and more advanced and user-friendly and with smart phones becoming ubiquitous, mobile banking evolved from being just another banking channel to being an avenue to deliver an enhanced experience to the banks customer. Development of technologies such as mobile wallets, POS, NFC, QR codes etc., and the mushrooming of customized applications for mobile platforms such as Android, I/OS or Windows presented an enormous window of opportunity for banks to service their customers using the mobile channel. 51

MPOS OVERVIEW A mobile point of sale is a significantly valuable enhancement to the rest of your POS system. Regardless of whether you have web based point of sale software or in-house POS systems, a handheld point of sale device will easily double the efficiency of the functions your system performs.

These mobile point of sale devices come in many sizes and shapes. But the primary structure is uniform. They are typically equipped with a laser barcode scanner, a keyboard for inputting information and an ergonomic handle that allows them to be easily carried. For example, you can use a handheld point of sale to check inventory. This can be especially helpful for busy retail clothing stores, Insurance companies, Courier companies and merchants whose business involves number of daily transactions that have a wide range of small items that must be delivered separately. You can also use these devices to help hone down the waiting time at the checkout and payment. The POS mobile are equipped with credit card readers and in that case, you can check the customer out right there without them needing to go through the line at all or to wait. The bottom line is that a wireless or mobile point of sale system is a great boost to the efficiency and effectiveness of your business. ADVANTAGES OF MPOS Mobile point of sale is used in different industrial sectors which provide an easy and simpler way of payment solutions.

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Retail Industry A retail point of sale system typically includes a cash register (which in recent times comprises of a computer, monitor, cash drawer, receipt printer, customer display and a barcode scanner) and the majority of retail POS systems also include a debit/credit card reader. It can also include a conveyor belt, weight scale, integrated credit card processing system, a signature capture device and a customer pin pad device. More and more POS monitors use touch-screen technology for ease of use and a computer is built into the monitor chassis for what is referred to as an all-in-one unit. All-in-one POS units liberate counter space for the retailer. The POS system software can typically handle myriad customer based functions such as sales, returns, exchanges, layaways, gift cards, gift registries, customer loyalty programs, promotions, discounts and much more. POS software can also allow for functions such as pre-planned promotional sales, manufacturer coupon validation, foreign currency handling and multiple payment types. Hospitality Hospitality point of sales systems are computerized systems incorporating registers, computers and peripheral equipment, usually on a computer network. Like other point of sale systems, these systems keep track of sales, labor and payroll, and can generate records used in accounting and book keeping. They may be accessed remotely by restaurant corporate offices, troubleshooters and other authorized parties. Point of sales systems has revolutionized the restaurant industry, particularly in the fast food sector. In the most recent technologies, registers are computers, sometimes with touch screens. The registers connect to a server, often referred to as a "store controller" or a "central control unit." Printers and monitors are also found on the network. Additionally, remote servers can connect to store networks and monitor sales and other store data. Hair and beauty industry Point of sale systems for the hair and beauty industry has become very popular with the increased use of computers. In order to run a salon efficiently it is essential to retain all client names, appointments, and charges for provided services along with employee schedules and product inventory in a system where reports and receipts can be generated. The nature of salons and spas can vary greatly depending on the business setup and the products or services being offered. This is why POS comes along with most salon software. Restaurant business Restaurant POS refers to point of sale (POS) software that runs on computers, usually touch screen displays. Restaurant POS systems assist businesses to track transactions. Typical restaurant POS software is able to create and print guest checks, print orders to kitchens and bars for preparation, process credit cards and other payment cards, and run reports. In addition, some systems implement wireless pagers and electronic signature capture devices.

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In the fast food industry, displays may be at the front counter, or configured for drive through or walk through cashiering and order taking. Front counter registers take and serve orders at the same terminal, while drive through registers allow orders to be taken at one or more drive through windows, to be cashiered and served at another. In addition to registers, drive through and kitchen displays are used to view orders. Once orders appear they may be deleted or recalled by the touch interface or by bump bars. Drive through systems is often enhanced by the use of drive through wireless (or headset) intercoms. How does it work Working of MPOS is similar to that of EDC payments where an MPOS reader is attached to mobile phone preferably smart phone and installed with POS software. When customer swipes their card it makes a connection through server via payment gateway and processes the request with the amount entered.

IMPLEMENTING MPOS Practical implementation of MPOS requires software, hardware, aggregators and Payment solutions. Hardware Mobile Handset Retailers should posses a mobile handset which should have minimum requirements that can run the POS software in its respective platform. Chipset or Dongle Dongle or chip that supports MPOS has to be procured from respective chip manufacturers. Software Software has to be installed in both chip and mobile device to perform operations across platforms and channels

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Payment Gateway Payment has to be processed through payment gateway and it forwards the transaction information to the merchants acquiring bank Aggregators Payment Aggregators through which merchants can process their payment transactions

INNOVATIVE USE CASES This section of the paper will describe the benefits of Mobile point of sale at various steps of banking process. Mobile services and point of sale can be applied to provide benefits for all customers at multiple touch points of the day to day process. This section gathers use cases examples where benefits for customers are clearly identified. 1. Easy Payment solutions for Business About 70% of retailers in Indian markets use point of sale EDC equipments for payments. Mobile POS is much simpler and cost effective compared to EDC. If this is implemented by banks and retail shop owners, it will help both customers and retailers in day to day transactions How does this work? Retailers should install these Mobile POS devices with banks assistance in their shops and outlets. For this to be installed, retailers should posses a basic feature phone supported by any platform (such as Java, Android etc). POS equipment will be attached to their mobile handset along with the software to be used for payments. Credit/Debit cards when swiped on the terminal provided will prompt for amount which after entering will process payment by contacting with Master card or visa gateway to complete the transaction. Benefit for Customers Customers payment in small retail shops are mostly done through cash transactions. With this technology, they can pay through their cards in any shop thereby avoiding the risk of holding cash. It is as secure as other mode of payments and provides convenience to customers in shopping.

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2. Payment solution for door to door delivery Door to Door delivery services in India are growing exponentially as customers shop apparels/goods or order food in online. Though many use Net banking option for paying them, there is a moderate percentage of customer group who opt for cash on delivery for goods and apparels. Almost 92% of food chains and restaurants in India prefer cash on delivery for food items ordered by customers. How does this work? Delivery persons should carry these mobile POS devices with them which is handy and payment for the bill can be made by customers directly through debit/credit cards by swiping in the mobile POS device. Receipt will be generated for the payment transaction as it happens in any POS devices. Benefit for Customers It facilitates customers to use debit/credit card for their transactions which will encourage them to shop again as it avoids the use of cash. Shop owners can be benefited by the service offered and transactions are safe when it is done through internet than by cash. Same process can be followed for similar use cases which include 3. Payment option for educational fees in school & colleges Collection of term fees in schools and colleges can be done through MPOS where customer can just swipe their card to pay for the term and get receipt for their payment. 4. Payment option for LPG and Cab Delivery LPG Dealers and Cab Delivery can use this mode of payment by carrying a MPOS device with them. It also benefits the dealers as account is debited instantly which keeps a constant check on goods delivered and book keeping is much easier compared to traditional way of collecting cash. 5. Payment option for Insurance providers Insurance providers can be greatly benefited from MPOS as carriers or independent agent just need to carry a MPOS enabled device which will credit their account directly and the premium receipt can be issued instantly. Reliance general insurance and Mahindra comviva Insurance currently uses MPOS as one of their payment options.

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6. Payment option for Courier Services Courier industry generally does plenty of day-day transactions which can be made simpler by rollout of MPOS. 7. Payment options for Movie Ticket counters Customers can pay for their movie tickets just by swiping debit/credit card in the MPOS device instead of cash with exact denominations. 8. Payment for Demand Drafts in Banks MPOS can also be used in branches for customers to pay for the demand drafts and other payments such as interest or loan payment transactions 9. Payment option for FNB Delivery Services Major fast food outlets and pizza delivery outlets approach customers and customer pays cash on delivery. MPOS can be used in these places where customer can pay through their card.

Revenue Model for ING Model 1 In this the bank provides a handset and MPOS kit free of cost to retailers and they are charged based on their swipe in the MPOS terminal. Here bank has advantage over retailers. Model 2 In this model, bank issues handset and Dongle for MPOS at a particular cost after which the charge per transaction is same as that of normal POS transactions. Approximate estimate of cost/equipment Dongle/Chipset - Rs. 1700-2200/device Installation and Activation charges Rs. 1000/device

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Aggregator

0-0.25% transaction fee Acquiring Bank

Customer

Merchant

0.5% transaction fee

0.25-0.5% transaction fee Issuing Bank

Major Technology partners for MPOS in India Ezetap Prizm Technologies Mswipe Communications Mobiswipe MTS PayPOS Raymedi

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Business Implications Rolling out MPOS by ING will increase the CA Base and Business Banking customers are benefited by it. Listing category A and some major players in category B will increase revenue to the Bank and the breakeven can be achieved within 8 10 months of the product rollout.

ii) Near Field Communications in Payments: Executive Summary This document identifies the benefits that Universal Integrated Circuit Card (UICC, also known as the SIM card)-based, mobile Near Field Communications (NFC) services can bring to the banking industry, banking professionals and the customer. This document is for initial common understanding of the opportunities that mobile NFC could bring to the banking industry. This forms the basis for future collaboration to develop the ideas and concepts presented in this document. Four use cases have been defined and analyzed where mobile NFC can bring great benefits to the banking industry, banking professionals and the customer, namely: Easy ATM Withdrawal Instant Money Transfer to peers Payment option to retailers Payment option for B2B

Each use case is introduced with different scenarios and the benefits to both customers and bank are defined. This will form the basis of further, more detailed, collaborative work to be conducted in the field of mobile payments. The primary focus of the paper is on the improvements brought by mobile NFC to banking and banking operations and the benefits that innovative services can bring to the customers convenience.

INTRODUCTION Overview This document defines the benefits of mobile NFC services for banking. This document builds upon the detailed study on mobile NFC services and to improve the way in which the banking industry operates. Scope Since early 2010, there has been an outpouring of original equipment manufacturers (OEM) support for NFC tech in phones and OS. A news report from Juniper Research, forecasts that 59

global NFC mobile contactless payment transactions will reach nearly $50 billion worldwide by 2014. As more industry players start to roll out the necessary devices and technologies, consumers will gravitate to NFC not just to make mobile payments but also to download coupons, promotional offers, and product information. That capability will offer not just convenience to the customer but also greater sales potential to the retailers. Global sales of handsets featuring Near Field Communication (NFC) grew 300 percent in 2012 to reach 140 million units, according to a new research report by Berg Insight. This Technology is introduced by CBA (Common Wealth Bank of Australia) in Banking Domain and from then on other major banks in the world adopted the technology. No other banks in India have adopted this technology for payments.

Role of ING If NFC is implemented in banking industry by ING, It will represent the NFC league in our country with no other banks in India had taken steps to implement such services. ING will lead all other banking competitors in this technology, which will increase the visibility of our bank worldwide. NFC will serve many customers and business people who can transfer money on the go to other vendors using NFC which will change the current market conditions.

Mobile Banking and its future: Statistics in the public domain clearly indicate that for the next generation of banking customers, mobile devices will be the preferred channel for banking transactions. However, many banks still perceive mobile and internet banking as extensions of the conventional bank branch, and not its replacement. While the fact remains that the virtual channel is predominantly used for retail transactions, the road ahead for banks is to offer the whole gamut of banking services on the mobile device. Currently, most banks offer essential banking services such as account-related transactions and mobile commerce facilities. In the future, though, banks will need to deliver corporate banking services on the mobile device. As adoption of mobile banking for retail transactions increases, the same set of users would expect the bank to offer them the same levels of convenience while conducting corporate banking transactions. Though a few banks do offer corporate mobile banking, it is largely restricted to checking balances, approvals and simple fund transfers. However, as more and more executives get equipped with smartphones and tablets, they would expect banks to offer advanced features like vendor payments, cross-border 60

transactions, treasury services, commercial lending and leasing services etc. on their handheld devices. Redefining Technology The first stage in the evolution of mobile banking involved the usage of the mobile device for banking and e-commerce, essentially the usage of the device for internet access. Banks and consumers treated mobile as an alternative channel for banking, and there was no significant value delivered to the customer, except the convenience aspect. With mobile device technology becoming more and more advanced and user-friendly and with smartphones becoming ubiquitous, mobile banking evolved from being just another banking channel to being an avenue to deliver an enhanced experience to the banks customer. Development of technologies such as mobile wallets, POS, NFC, QR codes etc., and the mushrooming of customized applications for mobile platforms such as Android, I/OS or Windows presented an enormous window of opportunity for banks to service their customers using the mobile channel.

MOBILE NFC OVERVIEW NFC technology allows two active devices embedded with chips transmit small pieces of data between each other via short range wireless connection and at low speeds depending on the configurations. It is a low friction process because of the close range that two NFC enabled devices can setup a connection

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Smart key access NFC is fully compatible with contactless smart card platforms. These proven systems provide a solid foundation for the introduction of NFC-enabled devices. This enables NFC devices, like your mobile phone or PDA, to act as an electronic key to access your home, offi ce, or car, or to pay for as well as to act as your transport ticket. Enabling mCommerce Mobile eCommerce or mCommerce is a vast area of activity, covering any transactions involving monetary value conducted via an electronic device such as a mobile phone or PDA. Offering consumers the possibility to make any sort of electronic payment wirelessly, NFC-enabled mobile devices are well placed to become the heart of mCommerce.

ADVANTAGES Fast- Evolving from a combination of contactless radio frequency identification (RFID) and networking technologies, NFC is a unique wireless connectivity technology that enables convenient short-range communication between electronic devices. It allows fast and automatic set-up of wireless networks, providing a virtual connector for existing cellular, Bluetooth and wireless 802.11 devices. This touch-and-go convenience enables rapid and easy communication between all types of consumer devices, making NFC the perfect solution for controlling data in our increasingly complex and connected world. Smart card security - NFC combines connectivity with smart card security. NFC devices can read information from contactless cards. This makes smart cards the ideal solution for bringing information and electronic coupons into the NFC world. They can also operate like a contactless card even when switched off and are compatible with the huge installed infrastructure of Philips MIFARE and Sonys Felica contactless card systems. Virtual connector - NFC can be used as a virtual connector for quickly establishing other types of wireless communication between devices. By bringing two devices close together, it can automatically configure and initialize other wireless protocols such as WiFi and Bluetooth. This enables communications at longer ranges and higher data rates. In an environment rich with wireless-enabled devices, NFC is the easy way to set up connections without needing to go through complicated selection menus. User Control - NFC provides secure storage for your confidential personal data, such as credit card numbers, coupons, membership data or digital rights. And by providing a fast and easy connection between your PC and mobile phone or your TV and PDA, it allows you to easily update and align your appointments or any other data. NFC provides access to information, anywhere and at any time. You can load the departure times of the bus into your mobile device by simply holding it close to the NFC-enabled timetable, or access the latest film news and 62

reviews at the cinema by walking up to an NFC-enabled poster. More than just a wireless connection, its a basic tool that allows you to interact intuitively with our increasingly electronic environment Modes of Operation NFC is an enabling technology. It operates over a short range (typically between 0 and 4cm) at a wireless frequency of 13.56 MHz in 3 different modes, each with its own set of specific use cases and service offerings.

i) Card Emulation Mode NFC is an enabling technology. It operates over a short range (typically between 0 and 4cm) at a wireless frequency of 13.56 MHz in 3 different modes, each with its own set of specific use cases and service offerings. This mode emulates a traditional smart card (such as Mastercard or Visa) and makes this mode convenient because of the already existing setup for the contactless payments by these smartcards companies. Thus NFC enabled mobile phones becomes a credit card. ii) Peer to Peer Mode This mode emulates a traditional smart card (such as Mastercard or Visa) and makes this mode convenient because of the already existing setup for the contactless payments by these smartcards companies. Thus NFC enabled mobile phones becomes a credit card.

iii) Reader Mode Reader Mode is a one-way data exchange from typically a Radio Frequency Identification (RFID) tag to the mobile device. This permits the mobile phone to be used to access information 63

such as bus time-tables, information about historic places or museum pieces simply by bringing the mobile phone near to an RFID tag

INNOVATIVE USE CASES This section of the paper will describe the benefits of relevant NFC mobile solutions at various steps of banking process. Mobile services and NFC technology can be applied to provide benefits for all customers at multiple touch points of the day to day process. This section gathers use cases examples where benefits for customers are clearly identified.

1. Easy ATM Withdrawal Almost 95% of total account holders in India use ATM for withdrawal of money. Easy ATM Withdrawal option by NFC will help customers to withdraw money 70% faster than the normal process. It takes approximately 74 seconds for a person to withdraw money from ATM, reports Berkinson Heward Corp. By using NFC enabled transaction one can complete their entire transaction in 25 30 seconds. While this is a major step in banking process, it is also of high degree of security where probability of strangers accessing ones account is greatly reduced. Debit/Credit Cards are not required to access ATM machine and withdraw cash.

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How does this work? Customers mobile phone should have ING NFC App. Open ING NFC App and wave it before ATM Machines NFC receiver. Enter your ATM Pin and complete the transaction. Customer has to place their device near NFC sensor in ATM where it detects customer profile and prompts for PIN and amount to be withdrawn and the process is completed.

Benefits for Customers Ergonomics and ease of use: Customers doesnt have to carry their plastic cards(Credit/Debit) to withdraw cash as all the information are locally stored in mobile NFC Module. Secure: Customers has to enter the PIN to authenticate NFC Transaction and the NFC network is around 20 centimeters of range where others cant identify ones info during transaction.

Requirements to implement this model ATMs should be installed with NFC chips of read emulator mode types that can read signals from mobiles and process the transaction. ING NFC Application which is to be focused on providing secure information.

Benefit for ING NFC technology in ATMs will reduce queue in front of ATMs. It eliminates the use of plastic cards as they can be stored in mobiles wallet. It also increases visibility thereby attracting more customers to hold an account in the branch.

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2. Instant Money Transfer to peers It is based on peer to peer transfer mode available in NFC. Using NFC one can transfer amounts to other, just by holding both remitters and beneficiarys phone closer to each other. This saves a lot of time and will work among younger generations in India where mobile wallets like airtelmoney and mPesa are performing a similar kind of approach through SMS. By using this method of transfer one can transfer amount anytime to other person in a much secured and easy manner. How does this work? Remitter and Beneficiary should have NFC Mobile with Mobile Banking App. Remitter can initiate a transaction and switch on NFC in his mobile. Beneficiary should tap his mobile with the remitter to get money transferred to his account. Remitter ID is matched with Account Number and Mobile Number, and transaction to beneficiary ID is done with his NFC and Account Number. Benefits for Customers Customer can initiate and complete a transaction to his peer within seconds. Highly secure and effective transfer as Beneficiary will be credited in seconds Benefit for ING I. II. III. Amount of transactions by customers will increase. Customer Loyalty towards bank is maintained It can pull new customers for the bank.

3. Payment Option for Retailers There is a paradigm shift in the way retailers and other merchants are retaining and increasing their customer base. A major contributor to this is the changing landscape of payment and settlement systems. Though India is basically a cash economy with more than 65% of all retail transactions settled in cash, the country is gradually moving towards non cash modes of payment like Credit cards, Debit cards etc. There are 300 million Debit and Credit cards in circulation in India today and this number is growing on a monthly basis. Besides cards issued by banks non

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bank issued prepaid card systems are growing. This along with the advent of mobile payments and mobile wallets is providing customers a wide choice for non cash payment options.

How does this work?

Retailers and merchants who are into daily transactions such as delivery of goods, Insurance Companies etc required to have a NFC enabled mobile Device. When customers visit retail stores, they can swipe their NFC enabled mobile device with ING NFC application and transaction can be completed

NFC Receiver

Local Bankers Switch

Receipt and Goods Delivery

Debit/Credit Info Success or Failure Flag

Customers NFC Device

Card Info
Master card/ Visa Switch

Debit SMS to Customer

Customers Bank Pool

Debit/Credit Info

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Benefit for Customers Avoids the need of holding cash and credit cards. Retailers can be benefitted to a larger extent as transactions is made simple and efficient Benefit for ING ING can plant NFC enabled transactions using EDCs and benefited from the amount of transaction and service charges per transaction. The failure of transactions in this mode of payment is very less which adds a major advantage to the bank.

4. Payment option for B2B Current Account Holders constitute a major portion in each and every bank. There is a number of transactions involved everyday for these merchants. Hence it is very important to tap this market and generate revenues. NFC can be used to perform such transaction in a much simpler and reliable manner benefiting business to business transactions. How does this work? It is similar to MPoS except instead of swiping cards it uses NFC for transfer of money. Peer to Peer Transfer mode in which both sender and receiver should posses a NFC enabled device. Signal received from NFC is decoded and information is received in other mobile where the transaction details are processed and final payment is made in seconds. Benefits for Customers Huge benefit for Business customers as the daily transactions to other business module is made much simpler. It eliminates the need of maintaining receipts for payment.

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Benefit for ING

57% of these total transactions in India are transacting through Debit and Credit cards which can be made easier by NFC payments. ING can make use of this untapped market to attract business customers and CA holders. Retailers and Kiosk shop owners can also subscribe for these facility which will eventually turn ING into an acquiring bank.

NFC REVENUE MODEL FOR PAYMENT

Service Provider

Fee for Device Subscription Commission on Transactions Acquiring Bank

Charges/Transaction
Issuer Bank

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Suggestions: Installation of NFC enabled devices and adapting to the technology may cost higher at the time of installation. But considering the rise of mobile and mobile based payments with the NFC technology been rapidly adopted in developed and developing countries, there is a high probability that by the end of 2017 almost every bank in India would have adopted this technology and initiating such practice first in India among banks will definitely put ING as an acquiring bank.

FURTHER BUSINESS IMPLICATIONS While these innovative use cases highlight obvious benefits in terms of customer banking and experience, to achieve them, banking infrastructure such as NFC compatible ATM or payment Devices will need to be upgraded. Furthermore, RBI standards are not fully transparent. In the light of these cost implications and challenges, a detailed banking industry business case needs to be established to validate the economic viability of NFC technology applied to banks in the coming years. Pending further aim is to develop a common set of guidelines that promote the use of a common service platform. This will allow banks and banking professionals to easily develop applications and services for the Mobile Banking. This will allow the end users to experience a range of applications and services in a seamless way that improves their satisfaction.

iii) Instant Cash on Mobile(mCash): Executive Summary This document proposes approach for transfer of money to others from customers mobile where beneficiary can withdraw fund without card benefiting Banking Industry and Customers. This feature allows customer to transfer fund to other without card. Receiver can receive this amount even he doesnt have an account in any bank. Two use cases have been proposed and analyzed which can bring benefits to banks and customer in a significant way, namely: 1. Transfer to peers 2. Transfer option for B2B customers

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Each use case is introduced with different scenarios and the benefits to both customers and bank are defined. . The primary focus of the paper is on the improvements on banking services that can improve customers convenience and penetration.

INTRODUCTION Overview This document illustrates the fund transfer services in banking. This document builds upon the detailed study on fund transfer through SMS. Scope Fund Transfer through Net and Mobile Banking has improved in years but there is huge customer base which are not willing/taking time to adapt to those services. Reports also say that some segment of people is much worried about security and reliability of funds transfer through internet. This situation is widely seen in rural areas of India where there are many places where customer feels insecure and unaware of fund transfer through Internet. Also there is a gap between B2B customers where the payments has not properly regulated through channels and causes uncertainty. This can also be considered and a proper solution for this problem will impact business on a positive note. CASH WITHOUT CARD This innovative model allows a customer to withdraw/send money by just using the receivers mobile number. The receiver of the funds can withdraw money from any of the ATMs. How does this work? To send Cash-on-Mobile to a receiver, all we need is the receivers mobile number. Below are the steps followed to transfer fund 1. Issue Cash-on-Mobile: As a Bank customer one can initiate a Cash-on-Mobile transaction through following options. I. II. Select ATMs Through Mobile Application

In both cases one has to provide:

Mobile Number of receiver Transaction Amount Remitter PIN ( Any 4 digit PIN customer wants to set for the transaction) 71

As soon as Cash-on-Mobile is issued to a beneficiary he will receive an SMS from Bank with the beneficiary PIN. 2. Withdraw Cash-on-Mobile: The receiver can withdraw the funds at select ATMs. The customer does not necessarily have to be a same Bank Customer. Funds can be withdrawn as: Select the Cash-on-Mobile option on select ATM screen and choose withdraw Cash-on-Mobile. Validate your Beneficiary PIN, Remitter PIN (has to be received from remitter) for the transaction to withdraw funds. 3. Cancel Cash-on-Mobile: A cash-on-Mobile request can be cancelled by the sender either through select ATMs or Mobile application on your phone. 4. Cash-on-Mobile Status: Check on the status of an issued Cash-on-mobile request either through select ATMs or Mobile application on your phone.

Services required for implementing model ATM Machine: ATM should be installed with that specific options and software has to be upgraded for the same. Phone banking Server: Phone banking server and module has to be updated with changes and to provide a random 4 digit pin to beneficiary with fund summary. Mobile Application: Separate section for cash on mobile in ING App for initiating transfer.

INNOVATIVE USE CASES This section gathers use cases examples where benefits for customers are clearly identified. 1. Transfer to Peers Involves transfer of fund to people in rural areas where net banking and direct withdrawal from bank is difficult. Instead customers can directly get into ATM and withdraw the amount anytime. Benefit for Customers If the fund is transferred to people in rural areas with this model - Saves time for both sender and receiver as one has to visit bank and deposit fund and the same has to be followed for receiving fund through branch - Rural people can be benefitted by this as they are not used with Net banking and mobile banking - Transfer of funds becomes much simpler with secure and safe transactions. 72

2. Transfer option for B2B customers

Business customers can use this model for transferring fund to the clients. Let us consider an example where a distributor has 10 retail customers. Every 10 or 15 days, distributor collects money from these retailers which will eventually get delayed. Instead retailers can transfer their dues through this model to distributor where he can collect the amount from the nearest ATM.

Benefit for Customers B2B customers are greatly benefited by this model. Saves time for both the parties as it involves simple procedure for transfer Easy withdrawal of money from ATMs No time restrictions as NEFT and RTGS as one can send and receive money anytime Highly secure and safe to transfer fund

How secure and safe is this model? As seen in the working principle, this model is completely secure as receiver has to enter both beneficiary PIN sent by the bank and Remitter PIN entered by the sender while transferring. It follows two factor mode of authentication for secured transaction. Revenue Model for ING Implementing this model, Increases the customer base in current accounts portfolio. Number of fund transactions will also increase to a larger extent Penetration in rural areas and visibility will be significantly high Transactions charges of Rs.5 or 10 based on the amount transferred can be charged. Breakeven can be achieved within 8 -10 months of launching this service

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Business Implication This model doesnt require any new changes in existing infrastructure or procedures. Some of those available services (ATM, Mobile App etc.) have to be upgraded to launch. It may create number of business opportunities for bank in CASA.

CONCLUSION
With multi featured internet banking application, ING is now into the league of mobile banking with first in class multi featured mobile application. If this application launches in the market, ING would be the first to offer a separate interface for mobile banking though it stepped late into the mobile banking segment. With day to day advancements in technology and smart phone market is booming, there are number of new banking functions and payment models that can be implemented and if implemented ING will lead all other banks as acquiring bank which increases the overall brand equity and penetration to the customers.

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Annexure 1:
Mobile Banking Questionnaire before project startup in Net Banking Site. 1) What Mobile phone type do you normally use? iPhone Android BlackBerry 2) Please enter the Mobile Number:

Others

Response received: 1484 Responses without redundancy obtained: 820

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Annexure 2:
Screenshots of New ING Mobile Application

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Annexure 3
Complete Mobile Banking Questionnaire after iPhone Application Rollout

1. Do you use a Smartphone? Yes No 2. If No, Are you Planning to buy a smart phone ? In a month or two Maybe after the next 6 months now

I feel do not need one for

3. Do you use Data (GPRS/Wifi/3G) Connection in your phone? Yes No 4. What is your most preferred mode of banking? Mobile Banking Net Banking Branches 5. Have you used Internet Banking? If Yes ICICI HDFC SBI Citi Please specify

ATM

ING

Others

6. What do you use your Mobile for apart from making calls? Chatting Videos/Music/Entertainment FB/Twitter seeking info Shopping/Tickets 7. Have you used Apps on Smartphones? Yes No If Yes, What type of Apps do you use? Entertainment /Games Information/News Social Networking (Like FB/Twitter) Banking/Finance Lifestlye/Health&Fitness 8. Have you used mobile banking? Yes No 79

9. If Yes, ICICI HDFC Please specify

SBI

Citi

ING

Others

10. If your answer is No to Q9, Please select the reason for not using Mobile banking? Dont know how to use Lack of Time I do not feel Secure about Mobile Banking My Bank did not support my phone 11. Where did you learn about how to use Netbanking/Mobile Banking ? From family/friends Tried on my own Please specify <Text Box> From Internet Others

12. What service would you often use in Net Banking/Mobile Banking? Balance Enquiry Funds Transfer Bill Payment Mobile/DTH Recharge Ticket Booking 13. How often do you check your Account Balance? At least Once in 6 hours At least Once in 24 hours At least Once in 3 days At least One in a week 14. Rank the following factors that you think are important for mobile banking? Features on offer Ease of use Security Speed of usage 15. How often do you shop online? Regularly twice or more in a week Never

once in a week

once in a month

16. What mode of payment do you prefer while shopping online? Credit card Debit Card Net banking 17. If your bank offers a service to make payments through Mobile banking, will you opt for it? Yes No

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Please indicate your preferences for the following questions. Indicate how much you Agree or Disagree with the statements 18. I feel mobile banking to be a convenient way of banking? Strongly Disagree Disagree Agree Strongly Agree 19. I believe that mobile banking will help me better manage your banking transactions/payments? Strongly Disagree Disagree Agree Strongly Agree 20. I feel secure doing Mobile Banking transactions/Payments Strongly Disagree Disagree Agree Strongly Agree 21. I intimate the recipient on call/SMS after transferring funds to him Strongly Disagree Disagree Agree Strongly Agree 22. I have more control over my accounts and transfers when I use Mobile/Net Banking Strongly Disagree Disagree Agree Strongly Agree

23. Banking on the Mobile Phone makes me feel in with the times Strongly Disagree Disagree Agree Strongly Agree

24. I will use Mobile Banking when ING Vysya Bank launches the service? Never Maybe use Will use Will definitely use 25. How satisfied are you with the service you receive from your main bank in relation to online and mobile banking? (with 1 being Least Satisfied and 5- Most Satisfied) Highly satisfied somewhat satisfied Dissatisfied Very Dissatisfied

Age: Mobile Number:

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