Acceptance of Cell Phone Banking.as distribution channel within the South African Retail Banking Sector

Abstract

Financial institutions, being faced with ever increasing threat of competition, legislative requirements (FSC) and economic downturn, are forced to find alternative ways of doing banking at lower cost structures than ever before. Customer demands and consumerism are playing an ever increasing role, as bank charges are coming under more and scrutiny. New and innovative banking channels like cell phone banking has been developed to cater for the bulk of the day to day transactions undertaken in branches across the country. Migration of customers onto these electronic channels will not only improve customer service because of shorter queues, but also ensure that capacity will be created inside banks, to focus on more revenue generating tasks and responsibilities. The up take of cell phone banking has been slow in the past. We are seeing an increasing number of customers registering for this functionality as they become more aware of its existence and the benefits that can be realised. The growth in usage of cell phone banking by these cust,Jmers have not realised the same growth percentage, with a large portion of customers not utilising it consistently. Major reasons for this is usability of the system, the availability of alternative electronic channels (internet banking) and the trust relationship between the customer and the technology and the financial institutions. Limited functionalities are also an obstacle in the ability of cell phone banking to become a primary banking platform, especially in the rural areas of South Africa. In these areas access to alternative banking channels are limited, because of infrastructure and distances. Current views from banking institutions are that cell phone banking are considered to be an add-on service, forming part of a bouquet of alternative electronic channels. With limited access, crime, geography and the high cell phone usage in South Africa, this statement might be revised in future, as cell phone functionality becomes more advanced