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Mobile Banking set to touch 2 billion people by 2020

Posted on July, Saturday 23, 2011 By itVAR News Network

Mobility-driven banking can change the socio-economic landscape and reshape basic things in developing countries 

According to a study done by the Boston Consulting Group, the mobile driven financial services are expected to improve the lives of around two billion people in developing countries within a decade and in the process give a major fillip to the economies. According to this study, overall, mobile financial services can reduce financial exclusion by 5 per cent to 20 per cent through 2020 and increase gross domestic product (GDP) by up to 5 per cent, with Pakistan, for instance, potentially seeing a 3 per cent uplift, says the study. 
The study further adds on that improved access to finance fostered entrepreneurship, new business creation and new jobs. Mobile financial services can also help overcome economic shocks such as natural disasters or unexpected medical emergencies. 
The mobile banking focused report, released by Norwegian telecom group Telenor, focused on five countries - Pakistan, Bangladesh, India, Malaysia and Serbia - which represent a broad development range. The study has thrown out in the open some startling fasts like around 72 per cent of the population in developing countries are without access to banks or credit cards.
As a result, they manage to work around this by borrowing from friends and family, obtaining short-term credit from employers, forming savings clubs or seeking out moneylenders but these options were often risky, costly and with indeterminate results. Hence, there is a big opportunity to formulate mobile-banking driven systems that can ensure better financial services at a lower cost to the end customer.

Global telecom companies such as Telenor, Vodafone, Orange and MTN have begun investing in mobile payment systems in Asia and Africa that allow consumers to make basic payments for utilities for example but also participate in savings, credit and insurance programmes with the help of handsets. 
Moving forward, mobile driven banking holds tremendous promise and potential especially for developing countries in the Asian region. And as India is already moving in the fast lane when it comes to adding mobile subscribers, it would make sense for operators to look at big value adds such as m-banking. 

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