Presented By:Team: Active Y

Rakesh Sahu(rksahu.83@gmail.com)Shanu Singh(shanuchaudhery@gmail.com)

NITIE, Mumbai

Battle For ITMobile banking project

Content

Introduction to Mobile Telephony in India Market Opportunity Technology and Channel Analysis Challenges Security Services Offered Development Roadmap Governance Model For Unity Bank Appendix

Current Mobile Growth

Total mobile subscriber touched 670 million. Mobile telephone Density ~ 56% (metro ~110%) Growth has been tremendous in recent past with monthly

growth of over 2% .

Future Mobile Growth Prediction (2014)

Gartner states that the mobile subscriber base of India is expected to reach 993 million

Mobile telephone Density is expected to be 97%

Mobile Internet Usage (IMRB Int. 2009 report)

As per Dec 2009, there were 471 mobile subscriber. 27% or approx 127 million mobile users have internet-ready

mobile devices. 9.4% or 12 million of these users have accessed the internet at

least once in last one year. With 2m active users

Future Mobile Internet Growth (IMRB)

25 million mobile Internet users by 2012, and 50 million users by 2014

Reasons For Growth

Sharp fall in the call charges 3G spectrum auctioning and reduction in the prices of 3G/GPRS

enabled handsets Growing mobile penetration into all segments of markets

Mobile Data Channel Base and Future

Source: Gartner, IMRB International & I-Cube 2009 report

QE Mar-04

QE Mar-05

QE Mar-06

QE Mar-07

QE Mar-08

QE Mar-09

QE Mar-10

0

100

200

300

400

500

600

700

Mobile Subscriber

Subscriber

Rural India

Urban India

0

50

100

150

Tele-density

Tele-density

Target Consumer Behavior

• Mobile banking is most used by subscribers falling in Rs. 1 to Rs. 2.99 Lakh income bracket followed by less than Rs 1 Lakh income bracket.

• Finding: Mobile banking is more popular among low income group of mobile users than higher income group of mobile users.

Source: Vital Analytics , August 2009 report , telecomindiaonline

• Mobile banking report: “Most popular services and income profile” (Two month ended March 2009, Urban Indian Mobile Phone Users).

• Market Positioning: ICICI bank continues to maintain its leadership extending in mobile space, 42% of all mobile banking users bank with ICICI, followed by HDFC (25.3%) and SBI.

Check Account Balance

View Last Three transaction

Status of cheques

Payment Reminders

Request a cheque book

0 10 20 30 40 50

39.97

28.15

21.06

20.92

19.11

Percentage Breakup

Market Opportunity For MobiTechInc

28%

32%

40%

Banks In India

Public SectorPrivate SectorForeign Bank

47%

16%

12%

26%

Mobile Banking Service (39 bank offer mobile service)

SMSUSSDHTTPSJ2ME

44% Banks Already offer mobile banking service

• More than 50% banks still need to implement mobile banking setup

New Setup

• Around 50% bank use highly unsecure SMS channel for mobile banking

• Opportunity to propose up-gradation to more secure channelSecurity Up-

gradation

•We propose a collaborative model with one time payment cost followed by per transaction revenue model

Build & Operate Model

OPPORTUNITY

Primary Research

Available Technology Analysis

Function SMS USSD (Preferred technology)

HTTPS(Preferred technology)

IVR J2ME

Ease of use

Support All GSM All GSM GPRS/3G Enabled with browser

All GPS Java, GPRS/3G Enabled

Cost to user

Cost to bank

Encrypted path from handset to server Only Wireless portion

Only Wireless

Browser to Bank

Only Wireless

Browser to Bank

Ubiquity

Biggest Benefit Ubiquity Ubiquity Most Secure Familiarity Mobile Appl. DB

Skills/Training Required Text Formatting

None Browsing None Application know-how

Handset side provisioning None None GPRS, Browser

None GPRS, Application

Drawback Prone to Security

Less Secure GPRS connection

Slow Appl. Download

Scalability No USSD 2 Yes Limited Scope

Yes, need reinstallation

Preferred Channel Analysis

What is it?

Capability built into GSM phones, much like the Short Message Service

It sends text between a mobile and an application program in the network

Service is integrated even in legacy GSM stack (GSM 02.90 and GSM 03.90.)

How is it different from SMS

USSD transactions occur during the session only.

Allows two-way exchange of a sequence of data

SMS, messages can be sent to a mobile phone and stored

No sequence or session is maintained

Challenge

Development of USSD application Development of interface between application and network

nodes (gateway) Interfacing with core banking system

Service opportunity

• USSD service is available with all major gsm service provider in India

• It can be accessed while roaming without extra charges.• USSD can be leveraged to reach the mass since 90% MS in

India are USSD enabled

Steps (Balance enquiry & top-up)

1. A mobile user initiates the service by dialing the USSD string defined by the service provider; for example, *#123#.

2. The USSD application receives the service request from the user and responds by sending the user a menu of options.

3. The user responds by selecting a “current balance” option.

4. The USSD application sends back details of the mobile user’s current account balance and also gives the option to top up the balance.

5. The user selects to top up his/her account.

6. The application responds by asking how much credit to add?

7. The mobile user responds with the amount to add.

8. The USSD application responds by sending an updated

balance and ends the session.

USSD(Unstructured Supplementary Service Data)

Preferred Channel Analysis

Mobile web Access (web browser application)What is it?

Capability built into GPRS/EDGE/3G enabled phones It sends secured data packet between a mobile and an

application program in the network Service is integrated in 2G and above compatible stack

How is it different from USSD

HTTPS is used to create the secure session.

Allows multi-way exchange of data (by scaling it up for m-commerce)

USSD transactions occur during the session only.

Allows two-way exchange of a sequence of data

Challenge

Scalable futuristic architectural design Development of mobile friendly application Interfacing of application with core banking system

Opportunity

• This platform is highly scalable since it uses client-server model with standard browser client.

• Online streaming of data with end-to-end encryption• Cater to multiple needs of higher income group sophisticated

mobile users

M-commerce

Core Banking

Mobilr Banking Server

Mobile Handset

User Architecture

Hierarchical Model

Challenges – Mobile Network Operator SideIntegration of USSD Application with mobile operator network

1. Operator hosted secure communication platform

2. Operator hosted USSD mobile platform3. Co-branded mobile banking USSD platform

serviced via the mobile operator’s network4. Mobile network operator as the issuer of

the accounts5. Bank as the mobile virtual network operator

(MVNO)6. Third party(MobiTechInc) hosted mobile

banking platform with mobile operator interoperability

7. MobiTechInc hosted mobile banking platform with bank interoperability

8. MobiTechInc hosted USSD mobile banking platform with bank and operator interoperability.

Challenges - Core Banking SideIntegration of USSD & HTTPS Application with core banking system

SOA Architectured Core Banking System

• Reusable discrete component design in SOA helps significantly in integration to deliver agility and flexibility

• Data Abstraction layer can be used to modify the middleware we propose to provide interfacing to the USSD and HTTPS application

Legacy Core Banking System

• Middleware is designed to provide the interfacing between our application and the database of the Core banking system

• Middleware is a S/W application which on run-time converts the request from application into query format /variable of the core database

Security – Risk Analysis For USSD

Lost or Stolen mobile Station

Since no trace of transaction stored on mobile therefore no risk of loss of critical information

Air Interface

Guaranteed message delivery Wireless signal is encrypted as per the MNO

Application Physical Server Safeguard

USSD gateway and application will be on secure system (password protected) therefore no body can access the data at server level

Threat

There is no encryption of information so the channel from the network to the bank is open to monitoring, replay, modification and impersonation.

Threats- Solution

Use secured link (VPN or SSL) to connect operator network and core banking system

User Safeguard Transaction limit as per RBI norm with single transaction less then

INR 1000 Introduce cumulative and account balance limits

Physical Safeguard Data center such as core banking DB need to be physically guarded

through 24X7 security officer and video surveillance

Network Protection Implement firewall policy Install antivirus on network systems.

Security – Risk Analysis For Mobile Web App(HTTPS)

Lost or Stolen mobile Station

Since no trace of transaction stored on mobile therefore no risk of loss of critical information

Air Interface

Guaranteed message delivery Wireless signal is encrypted as per the SSL

Application Physical Server Safeguard

HTTPS application will be on secure system (password protected) therefore no body can access the data at server level

Threat

Mobile device could be infected with virus since HTPPS-browser capability is generally present on smart phones.

Threats- Solution

Installation of anti-virus software of the mobile station device

User Safeguard Transaction limit as per RBI norm with single transaction less then

INR 50000 Introduce cumulative and account balance limits

Physical Safeguard Data center such as core banking DB need to be physically guarded

through 24X7 security officer and video surveillance

Network Protection Implement firewall policy Install antivirus on network systems.

Services offered Over USSD

Account Inquiry

• Balance enquiry• Mini Statement

Funds Transfer

• With in the Bank• Max Limit is 1000 Rs.

Mobile Recharge

• Top up for own mobile• Top up for other mobiles

Requests

• Requests for cheque book• Request for m-statement

Services offered Over HTTPS Account Inquiry

• Balance enquiry• Mini Statement

Funds Transfer

• With in the Bank• Outside the Bank• Max Limit is XXXXX Rs.

Mobile Recharge

• Top up for own mobile• Top up for other mobiles

Requests

• Requests for cheque book• Request for m-statement

Demat Enquiry Service

• Portfolio value• Value of holdings• Transaction status etc

M – Commerce

• Insurance Premium• Merchant payment etc

Development Roadmap – lifecycle

Project Plan•Requirement•Design•Implementation•Testing

Resource Plan•Human Resource Requirements•Hardware Requirements•Software Requirements

Methodology - Overlapped waterfall model

Product To Be Developed - USSD Application

USSD Gateway Web Based Mobile Application (HTTPS)

MiddlewareProduct Development & Testing Environment-

Simulated environment for USSD testing (we propose to buy it) Simulated environment to test integration with known core banking solution

Project Plan

Governance Model For Unity Bank

• Mobile Banking development and operation are handled by the IT Department of the Organization.• Organization structure is proposed in a way such that IT department can work closely with Legal, Security and Finance

department for the smooth running of project

Appendix 1

Project Plan

………. Refer: Project Plan

Appendix 2

Resource Plan

………. Refer: Resource Plan

Thanks