In my blog post today, I will be looking at an article by Lakshmi Mohan and Devendra Potnis that examines and discusses the implication of mobile banking for the rural poor populations of India. My decision to critique this article in particular is based only two factors: 1) An interest in banking applications in their functionality, usage, and perceived trustfulness; 2) To learn more about the topics as I have previously read and heard some information on the circumstances of the rural poor of India and their difficulties faced when handling financial transactions in these environments.
Within this article, the authors present a study examining and comparing three companies that are currently in this market of India. The authors at the conclusion of this study provide a detailed response to the findings and discuss their impact. Their argument is primarily in favor of the systems operated by these companies in serving the poor, and they encourage other IT professionals to enter the mobile banking markets of, not just India, but other developing nations as a space for significant financial gains in its latent market opportunities (Mohan, 2015).
In a study in 2016 by Onneile Juliet Ntseme, Alicia Nametsagang, and Joshua Ebere Chukwuere, the authors found similar evidence to Mohan and Potnis concerning the positive impact ease of use and convenience has on the actual usage of mobile banking opportunities and applications (Ntseme, 2016, p. 363). In the paper by Mohan and Potnis, the authors argued that “door-step banking helps customers by serving them at a convenient location and time…” (Mohan, 2015). In order for mobile banking to serve a purpose in the community presented by Mohan and Potnis, the applications/opportunities must be usable formed in such a way that prospective and ongoing customers of these services may utilize them accessibly. Regarding this factor, IT companies that enter this market have the opportunity to develop the applications for use by “door-step” finance agents—this is in-part the “latent market opportunity” Mohan and Potnis are referring too (Mohan, 2015).
In a published work by Rodrigo F. Malaquies and Yujong Hwang in 2016, the authors completed a study in a similarly developing nation to India—Brazil—to examine the relationship between trust and the adoption of mobile banking technologies. Their findings discovered that both banks and customers are negatively affected by low levels of disclosure about the security on mobile banking (Malaquies, 2016). In other words, the adoption rates among potential customers may be heavily impacted by their perceptions regarding the security of the technology; where younger people—who made a greater effort to inform themselves on the technology—readily trust these new technologies, information disparities results in population groups who did not trust mobile banking options (Malaquies, 2016). In some respects, these findings complement the evidence of Mohan and Potnis as they argue in their work that, because the majority of customers in this area are poor and illiterate to semi-literate in India, companies must “recruit, train, and retain a sales force of human agents” (Mohan, 2015). These customers are extraordinarily dependent on the proficiency of the finance agents, and thus, companies must build a trusting relationship between their agents and the customers. Lastly, by recruiting local agents as Mohan and Potnis indicate, loyalty to different mobile banking companies could develop out of the formed trustful relationship (Mohan, 2015, p. 2175).
On the flipside of the trust argument, companies who are unable to build trust with their clientele will no doubt suffer financially as a consequence. The study by Malaquias and Hwang, as previously mentioned, discovered the negative impact limited information disclosure by banking companies can inhibit the adoption rates among prospective customers (Malaquias, 2016). Tech companies that enter this space must ensure information regarding their technology is well-disclosed and accessible to their potential customers to develop credibility and trust within the populations of developing nations. In a study of Taiwan by ChauShen Chen in 2013, the author argues that the communication methods of banks should be “compatible” with mobile banking styles of potential users (Chen, 2013). In other words, the mobile banking companies and organizations should disclose information in a manner its potential and current customers can access and easily understand. In regard to the piece by Mohan and Potnis, one could argue that the presence of “door-step” finance agents is a positive variable for this factor as these agents may readily and directly disseminate information to the customers. However, this could result in the agent becoming less efficient—focusing more on information dissemination than actual service.
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References
Aijaz A. Shaikh, Heikki Karjaluoto, (2015). Mobile banking adoption: A literature review, Telematics and Informatics, Volume 32, Issue 1, 2015, Pages 129-142.
Chen, C. (2013). Perceived risk, usage frequency of mobile banking services. Managing Service Quality,23(5), 410-436.
Malaquias, & Hwang. (2016). An empirical study on trust in mobile banking: A developing country perspective. Computers in Human Behavior, 54, 453-461.
Mohan, Lakshmi, Potnis, Devendra, (2015). Mobile Banking for the Unbanked Poor without Mobile Phones: Comparing Three Innovative Mobile Banking Services in India. System Sciences (HICSS), 2015 48th Hawaii International Conference on System Sciences, 2168-2176.
Onneile Juliet Ntseme, Alicia Nametsagang, & Joshua Ebere Chukwuere. (2016). Risks and benefits from using mobile banking in an emerging country. Risk Governance & Control: Financial Markets & Institutions,6(4), 355-363.
Social Informatics: A Perspective 