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TopIntroduction
The information and communication technology have revolutionized the way the banking sector deliver its financial services. The shift from the traditional brick and mortar banking approach to mobile-based banking channels has become viable due to the high penetration of mobile phones in the economy. The number of mobile phone subscriptions is projected to be far more than the number of bank accounts, especially in a country like India. Mobile banking can be defined as a service that allows an individual to carry out their financial transactions via mobile devices, such as mobile phones, tablets or personal digital assistants (Deb & Agarwal, 2017). The innovation allowed the banks to provide cost-effective service to a large number of customers overcoming the spatial and temporal barriers. On the other hand, it facilitates consumers to conduct several financial transactions such as balance enquiry, fund transfer, bill payments, ticket booking with anytime and anywhere convenience. According to RBI (2016) report, there are only 18.7 bank branches per 100,000 adults in urban areas of India whereas, in rural and semi-urban areas, the fraction is just 7.8, indicating that mobile banking has a great potential to reach the unbanked and underbanked population of the country (Singh & Srivastava, 2018).
Mobile phone has become an indispensable part of humans’ life as it allows users to perform multiple functions on a single device. Despite such demand for mobile phones, the adoption of mobile banking is still very low. The applicability of cell phones is more inclined to social networking sites, gaming, and calling purposes than using it for financial transactions. India, which has a large mobile-cellular telephone subscription base with approximately 1079 million users for the year 2017 (ITU, 2017), subscribers using mobile-based banking or money transfer services are less than 25 per cent (251 million) (The Economic Times, 2018) of the overall subscriber base. Though people are shifting from cash-based transactions to online platforms, the adoption of mobile banking applications is not at the required level. The problems lie in the attitude and perception of people towards the adoption of technologically advanced service that will disturb their old routines. Many researchers have performed empirical studies to explore the factors that lead to mobile banking adoption in both developed and developing countries. However, there are limited studies that have been conducted in the Indian context, especially in metropolitan cities (Singh & Srivastava, 2018; Deb & Aggarwal, 2017; Behl & Pal, 2016). Therefore, there is a need for a study to understand what motivates a consumer to adopt mobile banking. Hence, the objectives of this study are twofold:
TopTheoretical Background
Mobile Banking
Tobbin (2012) defined mobile banking as the delivery of financial services through mobile devices. It allows customers to perform a variety of activities on their handsets such as checking account balance, transferring funds between accounts, paying utility bills and booking tickets. Mobile banking, which was introduced in India in the late 1990s and early 2000s, shorten the distance between the bank and the customer, thus help to achieve financial inclusion (Singh & Srivastava, 2018). The technology makes it feasible for service providers to offer cost-effective services for small size transactions. Mobile banking applications leverage users' sim cards to register the applicants, who, after joining the service, can conduct their banking activities via mobile phones (Tobbin, 2012). However, most of these services are the only subsidiary of the traditional banking channel. Porteous (2006) distinguished between “additive” and “transformative” model of mobile banking. As discussed by him, transformative models allow unbanked population, who are mainly low-income people, to access financial services on their phones whereas additive models are just another medium to an existing banking system. Though people have started switching from cash-based transactions to an alternative mode of payments, the acceptance of mobile banking is not at the appropriate level. Hence, it becomes essential to study the factors that motivate consumers to adopt these services.