Has mobile banking entirely replaced physical banks?

Not yet, but the day will soon come when the bank will only be an entity on the mobile phone.

The proliferation of mobile phones in our country has been astounding, to say the least. Touted as being an ‘expensive’ technology that only the rich could afford when mobile phones were launched in India in the 1990s, today, everybody sports mobile phones. Besides, a hitherto unconsidered demographic – daily wage workers, rural populations and slum dwellers – is a keen user of mobile phones.

The entry of affordable smartphones in the Indian market caused a seismic shift in thinking for service providers and industries. Where there are mobile phones, there will be mobile phone users, right? And where there are mobile phone users, they are going to demand mobile-only services. Hence, banks quickly devised mobile banking platforms that helped users conduct all their transactions using only their mobile phones.

Mobile banking apps today

All prominent Indian banks have developed some really good mobile banking apps for their customers. These apps provide a variety of uses: from paying bills to transferring money, and from opening bank accounts to recharging phone and DTH. Many others also accept payments and seamlessly transfer money between mobile phones. 

The question is: if the bank is available on the phone, are physical bank branches needed?

Will mobile apps replace physical banks?

While mobile banking platforms are quite robust in countries like the US and UK, the phenomenon is relatively new in India. Abroad, mobile banking platforms even allow cheque deposits via the phone; the user simply takes a photograph of the cheque and uploads it to the app. The bank then starts processing the payment. However, this functionality – and others like it – are not yet present in India. Thus, the physical bank branch is still needed for such tasks as depositing cheques and submitting account opening forms.

However, we are slowly moving towards this state of affairs. Some mobile banking apps allow fixed and recurring deposit account opening. Some others are set to allow zero balance savings account opening. Current apps comprise such functionalities as NEFT/IMPS money transfers, account statement access, and even setting preferred tasks on the home screen. Banks are also providing banking apps in regional languages – thus including the rural hinterlands as well.