Introduction
As a result of the advent of mobile banking, which fundamentally revolutionized and redefined how banks previously conducted their business, technology is now considered the key contributor to the success of organizations and one of their core competencies. With the help of their mobile phones or personal digital assistants, customers of a financial institution can perform a wide range of financial operations (Kumar et al., 2020). Banking and financial services are available and accessed via mobile phones and other wireless devices. Services may include banking and trading capabilities, account management, and customized data displays based on user preferences. An example of an innovation that has spread across multiple economic and industrial sectors is the concept of mobile banking. To promote economic growth, healthy banking conditions are universally recognized as both a prerequisite and a key factor (Ho et al., 2020). This paper explores the impacts of mobile banking technology on the financial sector.
Ways in Which Mobile Banking Has Changed the Financial Industry
Mobile banking can improve bank performance by increasing market share, customer satisfaction, product variety, individualized goods, and responsiveness to customer demands. Mobile banking has been and will be used as a strategic tool to influence the revenue structures of banks ever since it was introduced (Garzaro et al., 2021). Over time, profitability can be traced back to a strategy that effectively maintained or grew the customer base. Banking institutions can benefit from mobile banking and mobile money by increasing their market share, fostering customer loyalty, reducing operational expenses, and fulfilling governmental service obligations.
Mobile banking provides financial institutions with numerous opportunities to develop new revenue streams. Among these are capitalizing on customer analytics, improving customers’ access to products and services in real-time, and using the data banks collect about their customers’ preferences to create more personalized marketing campaigns (Khoa, 2021). Previous research into the concept of branchless banking has identified the crucial role that mobile phones play in specific models. These match the expectations that electronic money will bring greater efficiencies and lower transaction costs. Theoretically, The provision of mobile banking services is expected to increase profits for banks in the form of commission incomes and to gradually reduce the costs of overhead operations, both of which positively impact financial performance as a whole.
Mobile banking has wholly revolutionized the money transfer industry and spawned additional innovations that have reduced transaction costs for customers and banks alike. As a result of this change, financial institutions are making more money and more profit from the money transfer market (Samsudeen et al., 2021). Worldwide, there has been a shift toward doing a growing share of retail business via mobile devices. Customers can move funds between their checking and savings accounts and electronic money accounts, and vice versa. The improvement of mobile money services has increased the velocity and circulation of money in the country, leading to higher commission incomes for banks.
Branchless banking, such as mobile banking and mobile payments, is a way to cut down on the expenses of catering to low-income customers. Financial institutions that have had difficulty serving customers with low incomes in a viable manner through more conventional distribution routes will find this an attractive proposition (Rajaobelina et al., 2021). Mobile banking has matured into its channel and is no longer seen as an add-on to online banking; it is now called the “fifth channel” of banking. Because of this, there is now tighter coordination between mobile banking and traditional bank servers. This has allowed financial institutions access to the tools necessary to increase their customer base and revenue by bringing previously unbanked individuals into the banking system.
Drawbacks of Mobile Banking
Specific smartphone devices can only use a subset of the available apps. It is also possible that your device is incompatible with the platform the app was made for (Samsudeen et al., 2022). Typically, financial services on the go are reserved for the more high-tech mobile devices. A stable internet connection is also essential for your program to run smoothly and effectively.
Many security issues plague today’s bank-specific software, beginning with inadequate data encryption and ending with data leakage. If this is the case, hackers and other online peril can easily compromise these programs (Shankar et al., 2020). If hackers determine that your account has sensitive data, they may attempt to gain access to it. In order to avoid falling victim to scammers, you should never give out your password or any other financial details. If you lose your device, criminals may be able to access your financial information.
Mobile banking apps are not a good fit for corporations because they can only process small deposits simultaneously. When your account reaches the maximum amount, you must visit the branch to make a new deposit (Çera et al., 2020). The computer scanning software may be unable to identify some types of checks. As a result, you should set aside a considerable amount of time for this procedure.
While it may be possible to keep tabs on your accounts and investments even when you are on the go, getting your hands on that cash will still take some time. Experts scrutinize each deposit and transfer of funds before being granted (Zhang and Kim, 2020). It follows that you must keep waiting till the approval is granted. The ramifications of this technique affect virtually all financial institutions.
Inclusion
A mobile banking application’s numerous advantages and functions make it a helpful tool. You have total flexibility and freedom to manage your money and access banking services whenever and wherever you like. While using a mobile banking app, it is essential to prevent it from illegal use by taking measures such as protecting your login information and password security. Though mobile banking eliminates several inconvenient steps, it still has its challenges. Carefully consider an app’s potential drawbacks and advantages before installing it on your device. Do not let yourself become a victim of cybercriminals by forgetting to take precautions. Keeping up standards requires that service providers manage issues such as network oscillations, the impact of lost or stolen mobile phones, unauthorized access, and the possibility of improper transfers.
Reference List
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