Rating: Never mind mobile banking what about the ‘unbanked’?
Amongst the innumerable analyst opinions that the purchase of Palm by HP was the best thing since sliced bread, a piece of research from Berg Insight on mobile banking appears to have been overlooked.
The company is predicting that the worldwide number of users of mobile banking and related services is forecasted to grow from 55 million users last year [ 2009] to 894 million users in 2015. Which is pretty impressive.
The problem with such research is that these reports tend to be very ‘developed world’ centric. Take this example from Marcus Persson, who is a telecom analyst with Berg Insight.
“People who sign up for their first mobile subscription today will likely open their first bank account in the coming years and thus join the modern financial system,” he says.
“Mobile operators can play a vital role in this development and will have the opportunity to take an active part in the creation of some of tomorrow’s most important financial institutions based in Asia and Africa,” he adds.
GoMo News firmly believes that analysts like Berg Insight may be missing the bigger picture. Mobile phones will almost certainly be utilised for moving money around in developing markets but this could have very little to do with banks.
In fact, it’s the unbanked [those who don't have bank accounts] who will prove important in regions such as the Middle East and Africa. Berg Insight hasn’t missed this point.
In fact, Berg predicts here that 3 to 15 per cent of the international money transfers currently handled by various formal or informal agent networks will be carried out using a mobile handset by 2015.
The keywords here are “formal or informal.” Because Berg Insight suggests that such transfers will generate some $ 1.2 to $6.2 billion in service revenues.
And if the Banks aren’t involved in such activities then it is the mobile operators who will secure these revenues.
So if we go back to Berg’s figures again we will see that concentrating on banking might be a mistake.
Berg Insight forecasts that mobile banking will attract 115 million users in Europe and 86 million users in North America by 2015.
If you think about it, that’s not very many. Not compared to the millions in China, India, Russia, and Brazil who might suddenly find their mobile phones can pay bills.
GoMo News thoroughly agrees with Marcus Persson’s sentiments when he says that, “Mobile handsets are in an excellent position to become the primary digital channel for providers of banking and related financial services on emerging markets.”
What such analysis appears to overlook is the fact that even in Europe, in most countries the majority of mobile phone users are using prepaid handsets not contract phones.
And if you empower PAYG users to be able to pay bills without the necessity for a bank account, you could well be tapping into a vast unrecognised demand.
Tony is based in Surrey and is a veteran comms journalist. Tony also writes on the UK market… contact him here.