Africa remains the homeland choice for the mobile banking industry even as it double its digits in the last 12 months while Kenya’s financial institutions embracing the technology on the rise.
According to a report released by the Global System for Mobile Communications (GSMA) Company, dubbed “Mobile Money for the Unbanked” (MMU), it is the need for alternative financial services that are less risky and affordable that led to the introduction of the service
“It has the ability to meet the needs of customers who previously could not access formal financial services and had to rely on less safe,less reliable and more costly alternatives,” said the report.
Meanwhile the report recounts its success to meet the unbanked when it celebrated a century of deploying the mobile money services adding that Africa has nearly 50 per cent of the world’s deployments in which Safaricom’s mobile money service, M-pesa generated more than a half of Safaricom’s non-voice revenue becoming the key pillar of Safaricom’s corporate strategy.
In addition the company has partnered with Equity Bank, I&M Bank, and Kenya Commercial Bank to offer mobile based financial products that aims to reach the unbanked.
It is without a doubt that the African continent is in the midst of a fast-growing and innovative industry as it experience a convergence of mobile banking and mobile payments and the rise of mobile commerce across Africa.
To drive profitability and growth through sustainable innovation, Financial institutions are looking beyond the near term through unlocking of the existing opportunities and threats presented by the dynamic business environment.
Due to risks of fire disasters, stringent legal requirements, fraud, and frequent staff changes amid the technological advancements organizations have seen the need for prioritizing business continuity planning and management.
Companies in the financial institutions have been engaged in game-changing technologies facilitating customer expectations, improving transparency, while ensuring the competition against non traditional industry entrants is looked at. Financial institutions that have resorted to embrace the technology includes, Equity Bank and Kenya Commercial Bank that have started agency banking.
Kenya women finance trust is the latest institution to embrace the technology which the Managing Director Mwangi Githaiga, said it will be able to save women of their traveling time and will also present comfort in their businesses.
“We believe that once we do this, women from across the country- from the comfort of their businesses, from the comfort of their homes, should be able to save and withdraw without having to travel extreme distances to reach a KWFT outlet,” he said.
While signing a Sh162 million deal with IT solutions provider, HP. Githaiga added that the deal will lead to upgrade of systems and revamping the services of the organisation. The system is expected to start functioning by the end of June.
The shift of the service is now generated towards other markets in the continent to spread the experience of the existing opportunities in the Mobile Money services.
“Last year, GSMA took its Mobile Money summit to Rio de janeiro in order to engage more Latin American operators around the opportunities that comes with Mobile Money,”
To date the deployments accounts for 12 per cent, more than a quarter of the planned in Latin America, following the first case study that has been completed.
GSMA held its summit in Singapore last month, the home to the oldest Mobile Money deployment, SMART’s Mobile Money service launched in 2003.
Despite the double digits that come with the service, the report notes regulatory barriers, maintaining active networks, creation of awareness of the services and exploiting economies as major challenges affecting the deployment of operators adding that it is set to fight the challenges.
“Still, operators face a number of challenges. We have also begun to engage more deeply with deployments around the globe to diagnose key challenges, develop recommendations and support their successful implementation,”read the report.
Over two years, the industry has come a long way. We see more markets approaching the tipping point of achieving significant scale – such as Tanzania, Uganda and Pakistan – and an increasing number of deployments that are keen to learn from other markets and also share what they have learnt themselves,added the report.
It further showed that GSMA will continue to build on a strong foundation to support the industry and unleash the full potential of Mobile Money.
The deployment accounts for 80 per cent Of the 32 million subscribers in East Africa.
In Kenya mobile money service started way long in 2007 aiming at reaching over 100 thousand users in the rural-the unbanked. It is the most successful money service worldwide that has attracted the unbanked, and the financial institutions all over are embracing the technology.
Currently Africa’s annual mobile phone market growth rate is 65% twice the global average.