Financial institutions and other businesses are investing in innovative solutions to offer efficient, accessible, quality, low cost and secure financial services to their clients. The days of massive investment in bricks and mortar banking solutions and large numbers of human resources are fast disappearing. Branchless and cashless banking is taking off and it is predicted that by 2020 it will be a reality. Branchless banking has great potential to extend the distribution of financial services to poor people who are not reached by traditional networks. It lowers the cost of delivery enormously. Examples of branchless banking technologies already in place are the Internet, automated teller machines (ATMs), POS devices, EFTPOS devices and mobile phones.
There is considerable excitement about the potential to use cellphones for purposes well beyond their core function of communication. This is particularly true since the cellphone has extended basic telephony to billions of people in the developing world. The increased functionalities of handsets permit the device to be used as a means to transact a wide range of services.
Mobile Banking it the provision of banking and financial services with the help of mobile devices. These include performing balance checks, account transactions, payments, coupons, loyalty programs, credit applications and others as well as stock market transactions. Mobile banking has evolved from SMS and USSD to WAP-based mobile banking applications. There is increased use of USSD based mobile banking in most parts of Africa.
The recent Mobile Banking Southern Africa Conference 2011 had a number of interesting speakers from the banking, mobile operator, software development, regulatory authorities and other independent technology industries. Interesting products and services on show included: the Tap-A-Tag contactless solution from EEC Solutions, Entersect Technologies mobile banking security solutions, Vodacom M-PESA and Wizzit electronic wallet just to name a few.
From the presentations it was evident that most of the big players in the mobile network and banking industries have set their sights on mobile banking and have injected a lot of investment in order to make it a reality. Banks are seeking to increase their customer base and offer convenience to their customers through investment in mobile banking. Mobile operators are on a drive to increase their customer base and value chain through offering value added services in the banking market.
M-PESA from Kenya is the top success story for mobile commerce and banking solutions – currently being used by an estimated eight million people. It succeeded largely due to the flexibility of regulation and increased volume of the unbanked market. FNB and ABSA cellphone banking in South Africa are other success stories.
Their success has been attributed to the innovative solutions they provided in the market for delivering mobile based services for lotto, pre paid airtime and electricity purchases, money transfers and bill payments. Most of the players in the industry are vying for a piece of the value chain and this has seen them entering more into mobile commerce.
There is need for new players to be patient and invest in building a large user base initially, rather than chasing returns. The partnership between Mxit and WiWallet is a very good example of a relationship which will leverage on an existing social community and offer mobile banking services.
Security remains a major concern, but it seems gradually users are becoming confident about the security systems. Most mobile banking applications have failed not because they did not offer good services but due to lack of investment in understanding the ease of use of their products. Customers are more comfortable with easy-to-use applications.
Regulation was also mentioned as a great challenge for mobile banking solutions. Other players find it hard to enter into the mobile banking industry if they do not have a mobile banking licence which leads them to entering into partnerships with banks. Most people are interested in the success of Vodacom M-PESA here in South Africa where the market is highly regulated. For the success of the mobile banking industry there is need for good coordination between all the stakeholders to deliver the convenience of service to the people. In other developing countries the lack of telecommunications infrastructure in rural areas is offering a great challenge for mobile banking applications. Education is another adoption hurdle for mobile banking. Many people lack the understanding of the benefits of using mobile banking to traditional banking methods. Players need to invest in educating users on how to access and utilise the services.
The lessons that were learned from the shared experiences of the players in the mobile banking industry at the conference include:
– Understand the needs of the customers and align mobile banking products and services accordingly.
– Investing in education and marketing of the technology to the people especially the unbanked population.
– Understand and offer solutions for the adoption hurdles which include security, ease of use, affordability and perception.
– Understand the business models, value chain and coordination with the other stakeholders in the ecosystem.
There have been a number of mobile banking products launched and advertised in Zimbabwe but it seems they did not really take off. This might have been dude to the lack of profitability of the business or understanding of the market needs or regulatory concerns. There has been a marked improvement in the mobile penetration in Zimbabwe over the last two years. There is strong conviction among a number of players in the Zimbabwe banking and telecommunications market that mobile banking will offer a lot of solutions to the unbanked market and also improve on foreign currency liquidity problems in Zimbabwe. Mobile banking will be a true reality in Zimbabwe in the near future and hopefully it will open up opportunities for the entrepreneurs within Zimbabwe.
Post published in: News