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Banking in India: From branches to apps

Till a few years ago, banking in India was hugely depended on paper work. But it is now changing as many customers are opting for bank apps over bank branches.

In 2002, various American Banks brought the inculcation of mobile banking, through SMS Banking. This was the step towards reducing customer’s requirement to visit a bank branch and eventually make a convenient experience for the customers. In 2008, after a large number of American banks, many Indian Banks, of which ICICI Bank was the pioneer in online banking, brought about a change through net banking services. Now, online banking for banks has become a compulsory requirement and lost its significance of providing competitive advantages for commercial banks in India. The next step towards technological advancement is app banking.

In 2016, Kotak’s App – Kotak 811 and Mobile Banking was one of the first banking apps to roll out in 2018.  Kotak Mahindra Bank introduced an 811 account which is a zero balance account. The app helps customers to access their account on their fingertips.

As can be seen from the data above, Kotak Bank has been able to maintain a large number of mobile banking users who are active users of the apps. The traditional pass book updating is not required.  A statement of transactions can be seen in the app as per the dates put in by the customer.

A large number of Banks have introduced apps for their banks because they have seen a large number of potential customers opening accounts on the app rather than by visiting the nearest branch. Kotak Mahindra Bank’s 811 service, the zero-balance digital savings account that can only be opened by downloading the bank’s app and authenticating oneself with Aadhaar and a one-time-password, had helped drive the total number of accounts at the bank to 13 million as of 31st March 2018, up from 12 million by the end of the previous quarter.  The app takes 5 minute to open an account with them.

The Kotak App can conduct 100+ services which makes the banking experience convenient and the services easier to access for the customers.

  • Transfer funds easily & on the go, without having to register a beneficiary(like in NEFT)
  • Track all your Banking Transactions all in one place
  • Shop on Flipkart, PVR, goibibo etc.
  • Recharge your mobile & DTH subscriptions
  • Purchase and redeem Mutual Funds and keep track of your investments
  • Regenerate your Debit and Credit card PINs
  • Switch your Debit Cards on and off if required
  • Pay your bills, open a Term Deposit

It also enables customers to recharge their mobile and DTH connections through its virtual debit card. The virtual debit card has encouraged a large number of impulse buyers to purchase items even more.

Earn up to 6% p.a. interest on savings account balance over Rs. 1 lakh and up to Rs 5 Crores. Earn 5% p.a. interest on savings account balance up to Rs 1 lakh and 5.5% p.a. interest on savings account balance above Rs 5 Crores. 

With various platforms in the market bringing in more consumers to the world of digital payments an initiative like 811 account  has reduce the barrier to entry and make the savings account system infrastructure stronger. With the ease of setup, built-in security, and availability across smartphones and various banks, UPI seems to be well poised to see massive adoption by Indian consumers.

Security of mobile banking apps is a major concern for all customers. Our smartphones will feature built-in security features such as facial biometrics and fingerprint passwords to prevent access by anyone other than the phone’s rightful owner. In the not so distant future, other security measures must be undertaken by commercial banks in order to give the customers complete confidence of the app being secure.

The 811 Account has been one of the most important initiatives of Kotak Mahindra Bank in order to make customers transact in cashless ways and pushing the customers away from visiting the branch as less as possible.

An imperative aspect with respect to the security of an app is that most mobile banking apps do not store your bank details directly on your phone, but instead access it from a secure data centre. This means your mobile itself will never hold your personal bank information. Banks can also protect you with refunds if your account is compromised through your phone.


Banks like Kotak and Digibank has revolutionized the app banking usage of Indians in this digital age. Although the move from SMS Banking to online banking and now to app banking has not been seamless, it has helped people to become more trustworthy towards using apps and has helped making the banking experience convenient.

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