2 Billion Reasons Why Mobile Banking Matters

Technology has changed so many aspects of our lives, expanding the world in ways that once couldn’t even be imagined. It has changed the banking world in slight ways (ATMs, PINs, increased security, etc.), but the dawn of FinTech is about to take it through a massive overhaul.

This is a much needed overhaul, as Generation Y and the Millennials are the segments of the population companies now need to cater to and these people have grown up with technology. They want their bank to offer financial services and perks that fit their needs. Considering how big the smartphone industry has become, not to mention how time consuming handing over bills and getting back change now seems, it’s not surprising to discover how vital phone apps have become.

But the importance of this mobile access—and the real reason why its presence is important for modern businesses—goes beyond just making life easier for today’s busy Western businessmen or the younger generations. Because of mobile access, the business world is actually starting to refer more and more to the whole world, which means the financial transactions of other continents is important for modern success. In fact, according to Bill Gates, by 2030 over 2 billion people—many of whom, due to their nationality and poverty levels, have never had a bank account—will be helped by the rise of mobile banking. This means that, thanks to mobile banking, businesses will now have the opportunity to offer their services and products to large sections of the market (we’re talking billions of customers) that were previously inaccessible.

Look at the continent of Africa: Despite a growing economy and a number of major world cities, 80% of the population don’t currently have access to banking services. They do, however, have access to smartphones and in some cases (Kenya and South Africa) they are among the fastest growing markets in the world.

Enter mobile money services. Currently 183 million in Africa have a mobile wallet and that number is ever increasing. In fact, in nine countries, more people have mobile money accounts than bank accounts. If the numbers continue to increase at their current rate, the continent will be fully mobile by 2021. This is a massive population (current population is 1.1 billion) now ready and willing to spend money on new products.

Let’s look at two of the largest mobile money markets.

In Kenya, the primary provider of mobile money services is M-Pesa. Launched in 2007 and used by nearly half the country’s 44 million people, and two-thirds of the adult population, this service is responsible for the movement of one-quarter of the economy. M-Pesa’s success and market saturation can likely be attributed to an easy-to-use transfer system (allowing people to easily and quickly send money home) and its status as the first player in a new game.

Although M-Pesa also offers services in South Africa, it faces much fiercer competition there. MTN, WeChat, Verifone and MFS all have an established presence in the marketplace and offer services and platforms that allow South Africans to rely heavily on mobile wallets while transferring money or paying for products.

What does this growing market mean? Businesses who cater to an international market and want to increase their presence in Africa need to be aware of the mobile wallet reality and work within its system. Make sure you include this option when it comes to bill payment plans. Businesses that feature mobile money services and want to expand their presence on the international stage should be aware of both the potential that lies in the African marketplace and the fierce competition that is already in place.

More so, this saturation in Africa is a good sign of the way the financial world is moving. In today’s 24/7 society, the increased access to banking that FinTech provides is vital. FinTech truly is revolutionizing the financial services industry, leading to more responsible Leadership in Financial Services and FinTech. More importantly, it shows the positive impact that comes from Investing in Others.

 

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Welcome to the Leadervest experience. Founded after the 2008 Global Financial Crisis, we are Financial Services & FinTech specialists helping startups increase sales through sales & marketing consulting and believe in Investing in Others for more Responsible Leadership in Financial Services and FinTech.‎ We specialize in mobile payments/eCommerce, wealth/portfolio management robo-advisors, online lending, digital currency exchange, blockchain, big data & analytics, crowdfunding and insurance. Connect with us at Leadervest.com.