To customers have become more receptive to new

To meet customer expectations, electronic banking services have allowed financial transactions to simplify
and increased
their attractiveness to customers. Over the past year, in order to increase
customer comfort and maintain pro?tability, banks around the world have adopted
innovative banking technologies and modern e-banking services (internet and mobile). Banking
over mobile phones is the newest e-banking service with several benefits for both
customers and banks. In this context, the paper aims to provide an overview of the
latest electronic financial channel underlining various
aspects of mobile banking as it represents a key distribution channel for
a growing number of customers.

            Nowadays,
the very nature of banking is changing as bank consumers require more personalised banking
products and services and have become less willing to visit traditional branches for routine
transactions. In addition, they are demanding better
service quality and are looking for simplicity in their day-to-day
banking. Thus, traditional banking is more and more threatened
as digital channels grow in popularity. Since customers
have become more receptive to new electronic channels, the face-to-face sales
and service interactions are declining.

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            Today,
as new technologies emerged, customers have more options in when and where they
can to do their banking. Electronic banking, usually referred as e-banking, is the
newest delivery channel for banking services including home banking, PC banking,
internet banking, mobile banking. Electronic banking services
have been around for quite some time in the form of automatic teller machines and
telephone transactions. In more recent years, modern e-banking services (internet
and mobile banking) that allow customers to be connected anywhere, anytime, has
revolutionized banking services (Drig? & Isac, 2014). The development
of mobile banking has endowed the banking industry with new business
models able to provide appropriate self-service
banking alternatives to their customers.

            Electronic banking is seen as
one of the most successful business-to-consumer applications in electronic
commerce (Laukkanen, 2007). First the research focused on the customers’
behaviour toward ATMs, phone banking and PC banking. Recent studies however
have investigated the development of internet banking and the most recent literature has
shown an interest in investigating the adoption of mobile banking.

            Mobile
banking, the evolutionary step after online banking, has developed as a wireless service distribution channel that allows bank
customers to conduct transactions with their banks, obtain
financial account information and make payments through a mobile device, being
the newest distribution channel. Mobile banking is based on wireless application protocol technologies since a mobile device requires a WAP browser installed in order
to allow access to information. WAP (Barnes & Corbitt, 2003)
is
a universal standard for bringing internet-based content and advanced
value-added services to wireless devices such as phones and personal digital
assistants.

            The
term “mobile banking” had been defined in many ways by different
researchers. Thus, Barnes & Corbitt (2003) define mobile banking
as “a channel whereby the customer interacts with a bank via a mobile device,
such as a mobile phone or personal digital assistant”. According to Pousttchi
& Schurig (2004) it is a way of executing ?nancial services through the use
of mobile communications technology. Mobile
banking is a subset of electronic banking, the type of execution of financial
services in the course of which – within an electronic procedure – the customer
uses mobile communication techniques in conjunction with mobile devices (Pousttchi & Schurig, 2004).

            Krugel (2007) describes
mobile banking as “an extension of the existing payment infrastructure of a
bank to mobile phones as a channel for the leveraging of the mobile network and
its reach, to deliver banking services to consumers”, being a more cost
efficient channel for banks and allowing customers to have instant access to
information related to their bank accounts. Mobile banking, otherwise
known as m-banking,
m-payments, m-transfers and m-finance, refer to a set of applications that enable
consumers to use their mobile devices to access their bank accounts, store value
in an account, transfer funds or even access credit or insurance products (Donner & Tellez, 2008). M-banking can also
be considered as the convergence of mobile technology and financial services
(Chung & Kwon, 2009). Mobile banking is defined by Agwu et al. (2014) as the
providing of banking and all forms of financial services through mobile
telecommunication devices such as the smart phones, androids, etc.

            This new banking channel, with huge potential, develops
on the success of the other modern e-banking
service (internet banking), being a natural evolution of
online banking based on computer and a better digital
alternative to traditional bank channels, such as physical branches and toward automated teller
machines (Püschel et al., 2010). The simultaneous and growing
expansion of WAP-enabled devices has made the conversion of banking applications
to mobile devices a subsequent progress in e-banking services (Al-Jabri & Sohail, 2012).
However, despite its many advantages, the use of m-banking is still at an early
stage, while internet banking maintains its leading position within the electronic
banking channels. Regarding the
difference between online banking
and mobile banking, customers consider mobility
as the most valued
feature of mobile
banking (Yu, 2012).

            The crisis
has put pressure on banks and costs have become the main issue for bank managers.
In this context, the development of alternative channels has become a priority.
E-banking services
over the internet and mobile devices involve lower costs compared to traditional
branch banking. The growing importance
of mobile is undeniable, but branch and internet banking still remain the most favoured delivery channels. Both in developed and developing
countries, digital channels were generally preferred for most
banking operations. Besides, according to a 2014 Bain
& Company Survey
regarding customer loyalty in retail banking, mobile technology
has overtaken online banking in several countries (see figure 1), (Drig?
& Isac, 2014).

            Prior
to mobile banking, internet banking services had an obvious impact on customers
but lately they have increasingly begun to use smartphones in interacting with
their banks to the detriment of other channels. Although it is the newest
distribution channel with a short existence, mobile banking evolved and
expanded very rapidly. The adoption of mobile banking services by
users is much faster than the adoption of internet banking since banks have
invested heavily in the development of mobile technologies, security and smart
phone applications (Drig? & Isac, 2014).

            Despite
several advantages and benefits, such as: ability to offer services anytime and
anyplace; high rate of penetration and potential to grow even among the less
educated; ability to provide mass marketing and serve as alternative to branch
banking; capacity to reduce customer reliance on branch infrastructure or
access to the internet, the use of mobile banking services is lower than
expected (see
figure 2) in both developed and developing economies (Agwu, et al., 2014).

            In coming
years, the use of mobile banking services is expected to increase. After a
period of limited functionality, banks have extended their offer, most banks providing at least one mobile
banking offering. According to the Global Mobile Banking
Report, published in July 2015 by KPMG, this past growth to 0.8 billion mobile banking users worldwide
in 2014 is just the beginning (KPMG, 2015b). The number
of mobile banking users globally is predicted to double in the next 5 years
or so (exceeding 1.6 billion mobile banking users), which means over 20% of the
world’s population. Worldwide mobile
banking is expected to be over 119% between 2014 and 2019 (see figure 3).

            The report
highlights that mobile banking is one of the most preferred banking channel
worldwide, especially within developed countries, being the most accustomed
channel for the majority of banks by volume of transactions, in some developing countries reaching 50-60% (China and India,
see figure 4). Actually, the Global Mobile Banking Report 2015 claims that adoption
of mobile technologies for banking has reached higher values in India and China
than in the United States and Europe (KPMG, 2015b).

            According to
research data, there is a powerful connection between efficient mobile banking
services and higher percentage of consumer satisfaction and support (see table 1), but the
correlation with the probability of mobile customers staying with the present
bank is negative, at least in some developed countries, since the first users
of mobile banking services are generally more economically active and more technologically
clever and, thus, more demanding of their banking services providers (Marous, 2015).

            Mobile technology is revolutionizing
the banking industry also in European, allowing banks to offer additional
opportunities and facilities to their customers. Although mobile banking
penetration is high in certain European countries, this digital alternative is
relatively new in many markets and its usage is still low in most countries across
Europe.

            Statistical data (see figure 5)
shows that mobile banking penetration in European countries is relatively low with
an average modest growth year on year (37% in 2013, 38% in 2014). There
are some notable differences between specific European economies, Turkish
consumers showing the highest demand for mobile banking across Europe (penetration
rate 56% in 2014). Mobile banking services are also popular in
the Netherlands, Poland and Spain where usage rates reached in 2014 figures near
50% (50%, 48% and 48% respectively). If Turkey is the
only European country where more than half of the population uses mobile
banking services to
interact with their banks, at the opposite side
we can find economies like Romania, France and Belgium
recording penetration
rates under 30% (17%, 22% and 27% respectively). Even countries like the Czech Republic,
Germany, Italy and the UK record a low number of mobile
banking services consumers, penetration rates do
not even reach 40%.

            Moreover, according to statistics, Europe has a
relatively higher average age of mobile banking users (39 years) in comparison
with Asian and American countries where the average age is 37 years and 35
years respectively, with India having the youngest population of mobile banking
users across the world (30 years).

            Due to the convenience
of digital channels, customers use online and mobile technology for their banking
needs more often. Mobile banking, the newest
delivery channel that provides immediately and interactively banking
services via
mobile devices, is growing fast while the
attractiveness of branch banking diminishes
fast. Yet, internet
and mobile does not completely replace other channels, branch banking being still favoured by customers when it comes to getting
banking advice. However, there is no doubt that in
the near future electronic banking will undeniably overcome traditional banking as digital
channels become lately
the dominant means for consumers to interact with their banks. With the
increasing cell phone usage and evidence from growing user adoption statistics
across all regions, further development of mobile banking globally is just a matter of time and depends on the ability of banks
to convert smart phone users into banking users. While the future of banking is mobile,
nevertheless keeping mobile banking users and attracting new ones may not be an
easy task for banks.

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